Nintendo Case Study Example | Topics and Well Written Essays - 750 words

Nintendo - Case Study Example With that approach, they were able to streamline promotion and advertising into a single and consistent message. On the other hand, Nintendo was emphasizing on selective specialization, whereby they targeted both children and hardcore gamers. This kind of approach created confusion among Nintendo’s customers, because the two segments of the market had different needs that called for different messages in the advertisements for each segment. Customer satisfaction was, therefore, not achieved, and Nintendo needed to address that issue in order to reclaim its market share. Analysis of Case Data The main cause of the issue was Nintendo’s failure to invest in new technology. Key customers in the video game industry are in two categories: nontraditional children or teenagers, and the 18-35 year old serious gamers. The industry’s profits and revenues are realized from the second group that spends huge amounts of money and time sharpening their skills. Furthermore, they are tech-junkies, an aspect that Sony and Microsoft noticed. They targeted the segment and created games with high-speed, powerful processors. From the number of Playstation units sold, it can be determined that Sony managed to reach the target group. 120 million Playstations were sold by Sony, compared to only 20 million GameCubes by Nintendo. Data on market share shows that Nintendo was steadily dropping. Alternative Solutions The circumstances facing Nintendo dictated two major alternatives: either fight the competition to get back its market share or shift focus to other markets and avoid direct competition. If they chose to fight, it would have meant putting emphasis on hardcore gamers like Sony and Microsoft, and then attempt to beat them in performance terms. With the high cost of essential components in the manufacture of high performance video games, Nintendo would be forced to sell at a loss. Furthermore, their children-friendly themes was disadvantaged against the new market of M-rated and violent games. The other option was to focus on a different market segment that was not being served by Sony’s PlayStation or Microsoft’s Xbox. Determining and Establish Key Decision Criteria Key decision criteria should be based on a firm’s advantage in a segment, competitive environment, profitability, growth rate and size (Rusetski 211). These should be supported by an understanding of demographic trends, the significance of market segmentation and the uncertainties that are associated with a change of market targets. Viewing the market differently, it is possible to identify several other specialized segments. Nintendo was able to identify the casual and hardcore gamers. From the two available alternatives, Nintendo can either; invest more and fight for the hardcore segment that seems to be setting the trend in video games, with the risk of ending up in more losses; or take yet another risk and focus on the casual segment and the sub-segments found within the category, which also risks a re-launch failure. However, the casual segment provides a wider market that includes families, seniors, women and children. Evaluation of the Alternatives While the pressure from the competition seems minimal in the casual segment, there is uncertainty in profitability, growth rate and size, even with Nintendo’s image being family-friendly. This is bec ause it cannot be known for sure whether the video game adoption process has reached a point of early and late majority buyers being ready to be members of the gaming society, yet they make upto 65 percent of the market. In the same way, the casual segment’s growth rate is not known. The greatest risk lies in the segment’