Case study 1: Nintendo
It is interesting to consider the video game industry as an example of strategies used by the different firms to compete and stay among the greatest sellers of video games and consoles since those strategies evolve as technology evolves. However, despite the fact that this industry seems a bit different from the more classic cases, it is safe to say that like any other type of firm, the goal of video game producers is to increase their sales and thus, gain a certain kind of monopoly power over the whole industry. In this way, it seems important to analyze the profitability of the video game industry using known indicators like Porter’s five forces.
First of all, we can look at the competitiveness in this industry prior the introduction of the Wii, which led to great changes in the strategies used by video game …show more content…
While Sony or Microsoft were still focusing on classical advertising techniques, Nintendo tried to reach directly new customers by paying individuals who could talk about the new Nintendo consoles to friends or family. The marketing team also sponsored video makers mainly on YouTube to present the different consoles and games of the brand. This allowed the company to expend and reach out to even more potential customers. These new advertising techniques were really smart since the audience didn’t even necessarily considered those actions as being part of a massif marketing strategy. Seeing Nintendo in places where the general public never expected it was a powerful method to sell more consoles than the competitors. Another element that helped Nintendo appeal to the public was the idea of letting independent video game makers entering the market and selling their games on Nintendo’s platforms. This allowed the customers to have access to a wider range of games on Nintendo consoles and thus increased the sales of the
It is interesting to consider the video game industry as an example of strategies used by the different firms to compete and stay among the greatest sellers of video games and consoles since those strategies evolve as technology evolves. However, despite the fact that this industry seems a bit different from the more classic cases, it is safe to say that like any other type of firm, the goal of video game producers is to increase their sales and thus, gain a certain kind of monopoly power over the whole industry. In this way, it seems important to analyze the profitability of the video game industry using known indicators like Porter’s five forces.
First of all, we can look at the competitiveness in this industry prior the introduction of the Wii, which led to great changes in the strategies used by video game …show more content…
While Sony or Microsoft were still focusing on classical advertising techniques, Nintendo tried to reach directly new customers by paying individuals who could talk about the new Nintendo consoles to friends or family. The marketing team also sponsored video makers mainly on YouTube to present the different consoles and games of the brand. This allowed the company to expend and reach out to even more potential customers. These new advertising techniques were really smart since the audience didn’t even necessarily considered those actions as being part of a massif marketing strategy. Seeing Nintendo in places where the general public never expected it was a powerful method to sell more consoles than the competitors. Another element that helped Nintendo appeal to the public was the idea of letting independent video game makers entering the market and selling their games on Nintendo’s platforms. This allowed the customers to have access to a wider range of games on Nintendo consoles and thus increased the sales of the