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Nintendo: the Nintendo 64

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Nintendo: the Nintendo 64. Presenters: Ayami Nakanishi Asuka Oya Laurent Pawlowski Dustin Ciarla. Agenda. Today’s Agenda. Nintendo Recap Video Game History Embryonic 1 st Generation 2 nd Generation 3 rd Generation Nintendo’s Downfall Current Situation 4 th Generation - PowerPoint PPT Presentation
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  • Nintendo: the Nintendo 64Presenters:Ayami NakanishiAsuka OyaLaurent PawlowskiDustin Ciarla

  • Todays AgendaFamiliarize you with the Nintendo company.Go through the evolution of video game technology.Nintendos fatal strategic decision.The current and forecasted repercussions.Nintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgenda

  • The Nintendo StoryNintendo was founded in 1889 in the business of manufacturing playing cards.Nintendo gains success in plastic card games (1950s).

    Nintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgenda

  • The Early Fragmented MarketAll the technology was created in the USAThe Fairchild (1975)The Atari Wars (1975-1978)Atari VCS 2600 is the victor (1979)Atari captures 80% of the market

    Nintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgenda

  • Problems for AtariNintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaROI for its venture partner Warner is not high enough.PC price decrease of 1983 shakes the entire market.High-margins on console sales is nolonger feasible

    Atari had been approached by Nintendo to co-operate in the release of a new console called the Famicom but refused due to monetary constraints.

  • Go WestNintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaJapanese companies enter the market:Nintendo introduces the Nintendo Entertainment System [NES] (1983)Sega releases the Sega Master System after speeding up its R&D 6 months later (1983)A new business model is introduced.Consoles sold at cost.Profit made on video game royalties.

  • Nintendo a SuccessNintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaNintendo grabs major market share:Japan (92%)North America (95%)Europe (52%)

    NES consoles sold: 62 millionSega consoles sold: 10 million

    Large success attributed to the popularityof the Super Mario Bros game.

  • Level 2Nintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaSega creates the Megadrive console tosteal Nintendo market share.(Japan 1988 and NA 1989).

    The Megadrive is superior in all areas:Better graphicsLonger/complex gamesMore buttons

  • Nintendo Fights BackEventuallyNintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaNintendo responds late in the game withthe Super Famicom/Super Nintendo[SNES] (Japan 1990, NA 1991, EU 1992).

    By 1993 Nintendo recovers ground:SNES consoles sold: 49 millionMegadrive consoles sold: 23 million

    Reason why Sega was unsuccessful:Product life cycle and the economy

  • New ChallengersNintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaNew competitors release their own consoleswith innovative business strategies:3DO (early 1993)Amiga CD 32 (early 1993)Atari Jaguar (late 1993)Sega Saturn (late 1994)Sony Playstation [PS1] (late 1994)Where is Nintendo?

  • NintendoLate in the GameNintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaBy June of 1996 Nintendo unveiled itscontending system: Nintendo 64 [N64]

    Nintendos late start resulted inconsiderable market share lossSony Playstation: 100 millionNintendo 64: 34 millionSega Saturn: 10 million

  • Cartridge ConcernsNintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaNintendo decided to maintain its cartridge format for playing games on its N64 for The following reasons:

    Pirating protectionResilience and Quick LoadingEnhancement OptionsOnboard Saving featureCompatible with Internet Distribution Strategy

  • Unforeseen RepercussionsNintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaNintendos concerns over cartridge andconsole technology unfortunately hurtNintendo in the long run:

    PS1 games were pirated profusely, however this helped bolster its console sales at eh expense of competitors.Nintendos cartridges could only hold 64 mbs compared to 700 mbs for CDs

  • Unforeseen Repercussions (contd)Nintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgenda

    Nintendos development of the cartridge/console was too costly and led to an exodus of small developers.The Internet Distribution Project was dropped.Developers shifted their focus to other platforms due to the limitations of the N64 cartridge.

  • What Took So Long!Nintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaN64 console required advanced system features due to its late entry into the market.

    Nintendo broke the barriers in areas of graphics processing, multiplay options, and peripheral design.

  • Worth the WaitNintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaNintendo continuously delayed the release of its console for more than 2 years for certain regions of the world.

    Nintendos slogan became Is it worth the wait? Only if you want the best!

    Begging ones customers to wait has never been one of the successful business strategies of the 20th century.

  • Self-SabotageNintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaNintendos target market were children aged 4-12.

    Previous Nintendo generation were ignored, left to the competition.

    Childish animation: not cool.

    Few game titles of interest to adult population and even fewer for teenagers.

  • Nintendo Playstation???Nintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaNintendo had originally contacted Sony to work on a CD expansion for its SNES

    Nintendo breached their contract with Sony when they approached Phillips to work on a similar project.

    Through Nintendos unprofessional conduct a formidable competitor was formed.

  • Late and at Twice the CostNintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaN64 games costs were high due to:Nintendos royalty system, extensive R&D and developer difficulty in fitting games onto its cartridges.

    N64 games cost: 10 000 YenPS1 games cost: 6000 Yen

    Console cost was high despite Nintendos at cost sales strategy.High console R&D

  • Sonys IronfistNintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaSega released its Dreamcast in Nov. of 1998.Sony released its Playstation 2 in Mar. of 2000.Sega admits final defeat in Jan. of 2001.Nintendo Gamecube enters market in Sept. of 2001.Microsoft Xbox enters in Nov. 2001

  • And the Winner isNintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaSony PS2 sales: 75 millionMicrosoft Xbox sales: 20 millionNintendo Gamecube sales: 19 millionSega Dreamcast sales: 9 million

    Reasons for rankings:Sony and Microsoft are conglomerates with deep pockets, access to diverse networks, etc.Nintendo limited its target audience.Sega has never obeyed the console product life cycle.

  • Nintendos FutureNintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaNintendo will have to compete against:Sonys Playstation 3Microsofts Xbox 2

    Sony has experience in the consoleIndustry and will remain a major player.

    Microsoft is committed to investing in theXbox project.

    So where does Nintendo fit?

  • Nintendos FutureNintendo RecapVideo Game HistoryEmbryonic1st Generation2nd Generation3rd GenerationNintendos DownfallCurrent Situation4th GenerationNintendos FutureAgendaNintendo is too late to leverage theirbrand loyalty amongst older gamers.

    Nintendos console technology will alwaysbe one step behind competition.

    The child market segment is small and less lucrative, however the opportunity forprofit does exist.

    Nintendo will entrench itself into youth gaming via the handheld industry.

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