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Selected Case

published: 02 May 2019

  • Topic: Strategy
  • Region: Asia

Abstract:
Nintendo languished in last place during the console wars of the early 2000s, with game industry analysts suggesting that the Kyoto-based firm exit the gaming console market altogether. Instead, Nintendo used Blue Ocean Strategy to redefine market boundaries, creating the best-selling videogame console ever, the Nintendo Wii. Targeting noncustomers, the Wii outsold Sony’s PlayStation and Microsoft’s Xbox combined, until the market was disrupted by smartphones and tablets. Mobile technology targeted the same noncustomers, offering easy-to-understand games and controls, and Wii sales suffered. Nintendo initially responded by introducing a tablet-like console, the Wii U, a poor copy of the tablet experience that was a dismal failure. Stepping back, Nintendo again used Blue Ocean Strategy to “value innovate” with the Nintendo Switch, the only console to outpace the Wii in sales, and by moving into adjacent markets, working with businesses in which it held a minority stake to release the wildly popular Pokémon Go and other mobile games.

Pedagogical Objectives:
• Explore how strategy can be used to shape industry structure and market space, and the importance of linking technology to value. • Understand that businesses go through ups and downs, and that in an up-phase continually value innovating is as important as in a down-phase. • The importance of long-term growth, balancing and planning a product portfolio for the right balance between earnings and growth. This case uses Chan Kim & Renée Mauborgne’s Pioneer-Migrator-Settler Map to map Nintendo’s product portfolio over time and explain its performance.

Keywords:
Nintendo, Wii, Nintendo Switch, Pokémon Go, Mobile Games, Playstation, Xbox, Market Creating Strategy, Videogame Consoles, Blue Ocean Strategy, Blue Ocean Shift, Augmented Reality, Value Innovation, Disruption


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