This strategic choice would also secure Nintendo against the possibility of console obsolescence caused by better streaming technology. Although an ideal strategic fit between Nintendo’s cash resources and the threat of online streaming, this strategic choice brings its own risks, such as the difficulty of reconciling the organizational culture between the two companies. Nintendo should pay close attention to such possible difficulties. 2. Invest in its own cloud service platform – This strategic choice, although probably more expensive and time consuming than the option outlined above, would spare Nintendo the risks surrounding acquisitions and give the company the opportunity to build a system that is specifically designed to its needs and ends. This structure, although expensive, would give Nintendo greater leverage to have for the gaming industry what Netflix (an American company that streams movies in a pay-per-view basis) has for the movie industry. This choice would also put Nintendo in the forefront of technological development in the video game industry. These two strategic options (acquisition and in-house development) are not only in accordance with the SWOT analysis above, they have also been proved realistic by the successful acquisition of Gaikai by Sony, and the financial feasibility of the in-house development of a streaming service by Nintendo has been discussed by Bleeker (2014) 2 . However realistic, the solutions provided above only address the current industry configuration; even if successfully implemented they will not give Nintendo lasting superior performance because its competitors are also pursuing the same choices. Given the facts 2
Nintendo’s Pursuit for Profitability 70 related in the case study, including Nintendo’s resources and capabilities and the challeng es it faces, in order to pursue and achieve sustainable profitability, we propose Nintendo should follow a strategy based on the RBV theory. Accordingly, the company should look beyond the current industry configuration; as well as the current customer-base configuration, casual gamers vs. hardcore gamers. Rather, the company should look principally to its resources and capabilities in designing its future. The company should look to its core competencies, ability to create fantastic story lines and intuitive entertainment devices, and define its strategic intent. However, before the definition of its strategic intent, the company should decide its business purpose, either to remain an essentially entertainment company whether it wants to branch out into other businesses. If the company decides to branch into businesses it can, for example, seek to find ways in which its core competences can be leveraged in industries such as: - The military: How can simulated reality be used to aid the conduct of war 3 ?
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- Winter '18
- Video game console, Nintendo