this IP is owned by Nintendo, the company will continue to have exclusive rights to sell games and media surrounding these high-demand franchises. 2) Capturing Unique Markets: A rather distinct competitive advantage of Nintendo is the company’s ability to consistently capture unique markets outside of hardcore gamers. The Wii opened gaming up to those of all ages, from young to old, by combining its innovative technology and wide catalog to attract hardcore gamers, casual gamers, and those who wouldn’t even consider themselves gamers. A multitude of DS and 3DS hardware iterations, with widely varying price points, expanded the reach of the portable system to players with a variety of incomes. With the Switch, the portability of the console brought many former gamers back into the market, giving them the option to play games anywhere, despite their busy schedules. Nintendo Labo brought the Switch to an entirely different market, convincing reluctant parents that the Switch could be educational and worth buying for their kids. With Sony and Microsoft on a race to produce the most technically impressive consoles and capture the hardcore market, Nintendo’s continued ability to expand the reach of gaming to capture new, less- competitive markets has been crucial to the company’s success. 3) Cash Assets: A key favorable resource of Nintendo’s that often goes under the radar is its sheer amount of cash assets. Even with sales and stock plummeting during the Wii U era, Nintendo kept cash reserves as high as $10.5 billion in 2012 (Cundy, 2012). As of December 2018, Nintendo still retains around $6.5 billion in cash assets, enough resources for Nintendo to operate at a loss for many years and still stay afloat (Nintendo, 2019b). Nintendo’s mound of cash directly enables two additional competitive advantages, first, empowering the company to consistently pursue innovation and take risks on new ventures despite potential losses, and second, to maintain focus in applying its resources, since Nintendo is solely a gaming company, unlike major competitors Sony and Microsoft. 4) Console Lifecycle: The positioning and timing of the Switch launch have given Nintendo the advantage of operating in a different console lifecycle from Sony and Microsoft. This lessens the competition for Nintendo since the company isn’t tied to next-gen horserace currently occupying Sony and Microsoft, allowing them to focus on maintaining the success of the Switch and making it a complimentary system instead of a direct competitor to other consoles. 5) Distribution: Nintendo has access to a wide variety of well-known distribution channels for physical purchases, including physical retailers such as Walmart, Target, GameStop, and Best Buy and online retailers such as Amazon. 6) Pricing: Unlike many game developers, first-party Nintendo games rarely go on sale, yet players are more than willing to play a premium for Nintendo software over an extended period of time.
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- Fall '19
- Video game console, Nintendo, Nintendo Co.