Nintendo: Horizontal Differentiation in an Oligopoly

In: Business and Management

Submitted By MalenaT
Words 2468
Pages 10
Gregory Passani Economics 106T Professor Board December 2, 2010

Nintendo: Horizontal Differentiation in an Oligopoly
“The game has changed, ... and the way the game is played has to be changed.”
—Satoru Iwata, president of Nintendo Co. Ltd (Malstrom) Nintendo has been a major player in the technology and gaming industry ever since entering into electronics in 1970. While for years it dominated the market for virtual gaming, a rise in competition within the industry presented serious challenges for the company. After struggling for the first five years of the new millennia, Nintendo made an exceptional comeback with its innovative products, the Wii and the DS, that shook the market and brought in a whole new set of customers. Their new strategy was so successful it allowed the company to be ranked the second most valuable Japanese firm after Toyota in 2007 (Farhoomand 6 ). Despite its recent success, Nintendo must look ahead and act strategically as its competitors begin to adapt to the new market trends.

Market Background
The Birth of Gaming The electronic gaming industry began with a few very basic games in the 1970s. At first, they appeared in the form of coin-operated machines in public places, with games like Pac Man and Donkey Kong before moving to home entertainment with hits like Atari’s Pong (Vaughan 13). A major shift in the quality of in-home gaming came with Nintendo’s release of Famicon in Japan and the Nintendo Entertainment System (NES) in the United States in 1983 and 1985 respectively. The company also led the handheld gaming industry with its release of the Gameboy in 1989. With the high quality of the NES, Nintendo held a virtual monopoly in the gaming console industry for five

Passani years until the Sega Genesis was released in 1990. While the Genesis challenged Nintendo’s elite status for a brief period, Nintendo successfully…...

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...paying careful attention to their customers and continuous improvement with their product lines. At Nintendo we are proud to be working for the leading company in our industry. We are strongly committed to producing and marketing the best products and support services available. We believe it is essential not only to treat every customer with attention, consideration and respect. By listening closely to our customers, we constantly improve our products and services. Vision Statement Nintendo we are proud to be working for the leading company in our industry. We are strongly committed to producing and marketing the best products and support services available. We believe it is essential not only to provide products of the highest quality, but to treat every customer with attention, consideration and respect. By listening closely to our customers, we constantly improve our products and services. Nintendo Corporation feels an equal commitment toward our employees. The Company wants to maintain an atmosphere in which talented individuals can work together as a team. Commitment and enthusiasm are crucial to the high quality of our products and support services. We believe in treating our employees with the same consideration and respect that we, as a company, show our customers. History Nintendo started as a small Japanese business by Fusajiro Yamauchi near the end of 1889 as Nintendo Koppai. Based in Kyoto, Japan, the business produced and marketed a playing card game......

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