Nintendo Case Study - Designing a new product assignment. PDF

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Designing a new product assignment....

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Part-I Summary of the Case Study The case study revolved around the gaming industry revolution and competition. The case study generally focuses on the Nintendo Corporation, which was a major market shareholder in gaming industry, strategy to compete with its competitors and bring in a new game counsel which could win more market share and outperform the competitors. The case begins with history of gaming industry, market leaders and competitions and how the gaming industry was revolutionized. Video games have been around since the early 1960s. In 1962 MIT students Steve Russell, Martin Graetz and Wayne Witaenem developed Spacewars, the first video game. Spacewars marked the first time that computer graphics were used in a game. Then a U.S.-based Atari launched a simple table tennis game called Pong in the United States, which could be hooked up to a TV set.7 It was a hit. Japanese companies took notice. In 1977, Nintendo entered the market by releasing aa Pong knockoff called Color TV Game 6 and sold more than 1 million units. The products like Game and Watch, Game Boy and Famicom were huge success with the last selling 62 million units worldwide. At his time, Nintendo was the key market leader with the greatest number of sales and customers. Key to Nintendo’s success was the company’s control over third-party software developers. Nintendo encouraged third-party developers to create games for the wildly popular NES, as long as they agreed to produce no more than five games per year, and not produce titles for any other console system for two years. Nintendo began to face strong competition from Tokyo-based Sega, which released a 16-bit console called Genesis in 1989. Increasingly, games and game consoles began to compete on underlying technological advancements, enabled by exponential advances in computing technology. Sony entered the market on the software side with its Famicom game called Captain ED in 1989. Sony started to develop its own CDROM-based console, and in 1994 released the 32-bit PlayStation. The PlayStation’s superior system performance, affordable price, and wide array of games made it a new success in the market and this marked the start of a new era for the gaming industry. And then PlayStation 2 made Sony the market leader. Meanwhile, Microsoft was attempting its own aggressive push into gaming and launched the original Xbox in 2001. The Xbox went head-to-head with Sony’s PlayStation 2. To cope up the competition, in 2001, Nintendo released the GameCube console while adequate for basic 3D games and Mario Bros., the hardware failed to measure up to the PlayStation 2 or the Xbox.

By the early part of the 2000s, video games were firmly entrenched in youth culture. In 2002 the founding CEO made Iwata, an experienced game developer and former president of game studio Hal Laboratory, president of Nintendo in 2002. After becoming CEO, Iwata pushed for several changes in Nintendo’s organizational culture. First, he asked Nintendo executives to think about what made initiatives succeed or fail. This emphasis on understanding led to improved communication across departments. The company’s strategy became better understood which resulted in more autonomy across the company. In late 2004, engineers at Nintendo Corporation were busy developing a next-generation, nontraditional, video game console, codenamed 'Revolution.' With Sony and Microsoft leading the charge in the video console space, the question was whether and how the “Revolution” could help get Nintendo back on its feet. The team had identified several basic concepts for the console with the aim that The Revolution was not just a toy for children. The console had to be familiar enough to be played by all family members, right in the living room. It had to be designed in a way that it would be acceptable to mothers, as they have control over the living room in most households. The console should be inexpensive compared to rival products – namely, Sony PlayStation and Microsoft’s Xbox. This new approach to console design was extended to the controller. A special controller development team was formed which believed that the controller was not just a console peripheral, but also an intermediary between man and machine, and even an extension of the human body. Many porotypes were prepared, tested and presented. A final prototype was presented to Iwata, which was a new rod-shaped device. He had tried pointer-based prototypes before, but this single-handed design appealed to him. The team also had a challenge that the Revolution to be able to play the pervious console games. At the 2005 E3 gaming exposition in Los Angeles, Nintendo planned to announce the Revolution, and maybe even demonstrate the console and controller. Industry buzz was pointing to both Microsoft and Sony announcing their own next-generation consoles at E3. It was a Wii console which was launched and it gave a tough competition to Sony and Microsoft and became a success. The Wii was a successful in gaining Nintendo a good market share. The main success was because of Innovative controls, developing a console system that fully integrated and relied on motion controls had never been done before. Sony and Microsoft developed their systems after the strong response to the Wii. Beyond having motion controls, they were easy to use and understand. Anyone could pick them up and understand how to use them within 5 minutes vs. traditional controllers with multiple buttons/ bumpers/ triggers. Wii Sports drove the system because it gave players a fun, light 10-minute game with closure. This was great for people who didn’t want to play for 3 hours at a clip. All of the above they made the system friendly for non-gamers. This helped Nintendo sell the system to a new

audience (grandparents were buying it). When something is hard to find, people want it more. Nintendo didn’t expect it to sell as well as it did, so they couldn’t meet demand for well over a year. This drove more demand. Nintendo (intentional or not) created a system that didn’t compete on tech specs, but provided fun beyond the gaming market. That’s why the Wii was all successful. Part-II 1) What are the main design differences between the Wii, the Wii U, and the Switch? How did the Wii U attempt to improve upon the Wii? How did the Switch attempt to improve upon the Wii U? The Nintendo’s Wii U is a souped-up version of the original Wii, which in fact was a successor to the previous game console, GameCube. Besides the length, which is a noticeable change in the Nintendo’s next-generation game console, the Wii U is much more powerful than its predecessor, plus it’s backward-compatible with Wii games, which is not possible with the Wii. The GamePad is the primary controller and the main selling point of the Wii U console, which includes a builtin LCD touchscreen to take gaming to the next level. And the best thing about the Wii U is that it’s the first video console to support HD. This article looks at the differences between the two consoles. Switch is one of the best consoles to be released in recent years. You only need to look at the sales – it’s already passed the N64, Gamecube and the Wii U (the Wii U by quite a considerable amount, too), and in it’s opening week it held its own against the PS4. The Wii U was designed to allow for an ‘untethered’ gaming experience, but this was limited by two major factors relatively poor battery life (of the controller) and short range. The Switch has a dock that enables TV play, but the main ‘console’ is essentially a tablet with a controller on each end (i.e. the “Joycons”), and you can bring it with you anywhere. Just make sure you bring a charger if you want more than 3–4 hours of gameplay on the go. Not only does it have a more powerful/efficient processor, it employs cartridges instead of discs (Nintendo going back to their roots!!), so load times are MUCH faster than the Wii U. The UI is also very snappy and, in my opinion, more intuitive than the one on the Wii U. And like most modern tablets, you can turn on the Switch or put it into ‘sleep mode’ almost instantly. No, it’s not as powerful as a PS4 or Xbox One, but that’s not the comparison we’re making here (and to be fair, those systems are also disc-based, so game load times are still often longer than the Switch). To summarize, Switch has is way too ahead of Wii and Wii U in terms of design, speed, graphics and power. Switch is best amongst the three. 2) Which was Nintendo's most successful console: the Wii, the Wii U, or the Switch? Which was its least successful console? Explain what design elements might have factored into the

success of one console over the others. What other key factors might have impacted the product's success? The Wii was a major success for Nintendo; in April 2007, the Wall Street Journal declared that Nintendo had "become the company to beat in the games business", citing the success of the Wii and the portable Nintendo DS line. As of March 31, 2016, the Wii has sold 101.63 million consoles worldwide. In January 2017, a Nintendo spokesperson stated that production of the console had ended, with just 13.56 million units sold. Then Nintendo Switch is currently the success and has sold 41.67 million units as of September 30, 2019, outselling the Nintendo Wii U, GameCube and Nintendo 64 within its first two years of launch. The Nintendo Switch was a masterstroke in a decade of ups and down. The console's reveal trailer and marketing videos and silly demonstrations that they did really resonated with fans who were just as excited and crazy about the games. Seeing an executive at the top just as excited about a new Pokémon game, not excited to sell you a new Pokémon game but excited about the Pokémon, was just fun, and that was important. As it stands right now, the Switch has very little competition in the portable gaming space. I think that a lot of their competitors are looking past what the Switch is right now and looking into streaming games and removing the need for a console or hardware entirely. But I think the Switch is going to stand out as a unique piece of hardware for a long time. There's still going to be an audience that wants what is essentially the Game Boy, the original handheld system that you can go around and play. And it certainly won't hurt if you can bring it home and plug it up to your TV. The reasons for Wii U failure were obvious. While the Wii U was the first Nintendo console to support HD graphics, those graphics do look a bit dated by today’s standards. Also, because it’s disc-based, load times are going to be quite a bit slower than the Switch. Wii U battery life was initially a major misstep from Nintendo. Similarly, No Internal Hard Drive Storage was there. Underpowered Hardware and very poor third-party support are also some reasons of its failure. 3) Why do you think there is no longer a Wii-branded console, despite its smashing success upon its release? Despite a smashing success, Wii is not longer a market need. One of the main reasons are not coping up with the technological advancements and connectivity. There were many technical problems as well. The first Wii system software update (via WiiConnect24) caused a small number of launch units to become completely unusable. This forced users to either send their units to Nintendo for repairs (if they wished to retain their saved data) or exchange them for free replacements.[144] With the release of dual-layer Wii Optical Discs, Nintendo of America stated that some Wii systems may have difficulty reading the high-density software (due to a contaminated laser lens).

Nintendo offers retail lens-cleaning kits and free console repairs for owners who experience this issue. The Wii Remote can lose track of the Wii system it has been set to, requiring that it be reset and resynchronized. Nintendo's support website provides instructions for this process and troubleshooting related issues. While online was never as important to the Wii as it was to the PlayStation 3 and Xbox 360, the lack of any kind of connectivity still cripples the device in a number of ways, and cutting out media functionality is the biggest. Similarly, new versions of PSP and XBOX were more powerful and had more focused and real graphics. Wii was unable to cope up with the competition of PSP and XBOX. Nintendo posted a record loss of $926 million for the initial six months of its 2011–2012 fiscal year, blamed the Wii's design for being "short-sighted". The Wii initially enjoyed phenomenal success because it was inexpensive (due to its being less sophisticated than its competitors) and introduced a "gaming gimmick". However, this approach meant that the Wii's hardware soon became outdated and could not keep up long-term (in contrast to more-advanced rivals such as Xbox 360 and PlayStation 3, which were expected to continue doing well in 2012–2013) "as both user desires and surrounding technologies evolved" later in the generation. Furthermore, price cuts and the introduction of motion-sensor controllers for the Xbox 360 and PS3 nullified advantages once held by the Wii. The Globe suggested that there were other reasons for Nintendo's poor financial performance, including a strong yen and a tepid reception to the Nintendo 3DS handheld as mobile gaming became popular on smartphones and tablets, such as the iPad. 4) If Nintendo hired you to design a new video game console to replace the Switch, what suggestions would you have based (in part) on your research into their product line?

If I was hired, I would have upgraded to a Switch Pro model which would be able to support 4K play, though the jump in processing power needed for that means it’s probably further off than some might think. The software and the graphics should have been more powerful to compete off with PSP and XBOX. I would suggest New Switch models that cater to different price points and video resolutions. A VR headset or PS5 rival model could be launched. Since, future is in virtual reality gaming, I would suggest o bring in a gaming product which can support 3D and VR games. This new model would boast upgraded hardware in comparison to the original Nintendo Switch, potentially offering better graphics and processing power. Similarly, it would support 4k graphics.

Also, in this era of internet and connectivity, the online versions and cloud supportive feature would attract more customer. There will be challenges ahead for the gaming company: keeping its Nintendo Switch Online service full of goodies to keep gamers interested, for one. It will be hard keeping the Switch eShop well-curated as more third-party titles flood onto the platform too, while Nintendo will need somewhat regular releases of its flagship franchises (Zelda, Mario, Pokémon) to keep fans happy.

References:

10 Reasons Why The Nintendo Wii U Failed Difference Between Nintendo Wii U and Wii Nintendo Switch Vs Wii U: What's The Difference? Nintendo Video Games. Nintendo's Wii console captures new game market Talking Point: What's Next For Nintendo After Switch? The Nintendo Switch was a masterstroke in a decade of ups and downs The Social Living Room: How Nintendo’s Wii Revolutionized Gaming And What It Means For The Future Of Consoles 9. Why Nintendo's Wii Mini is out of touch with the internet and the future 10. Why was the Nintendo wii so successful?

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