Gaming behemoth Nintendo is currently riding high thanks to the phenomenal success of its Wii and Dual Screen (DS) consoles. But the firm has had its share of ups and downs, most recently with a less than favourable take-up of its previous generation console, the GameCube.
From its humble beginnings as a playing card manufacturer in the late 1880s, Nintendo has evolved into a multi-billion-dollar industry, spawning much-loved titles such as Donkey Kong, Super Mario Bros and their nemesis Wario, and the Legend of Zelda.
The firm is due to release its latest trading figures this week, but has raised its sales forecasts four times this fiscal year. For the year ended 31 March 2007, the company expects turnover to reach ¥966bn (£4bn), an increase of ¥66bn on previous forecasts. According to Nintendo, the increase is largely due to strong sales of its DS hand-held console.
In the past decade, Nintendo saw its dominance of the hand-held gaming market slip for the first time when Sony launched its much-anticipated PlayStation Portable, but the sleek design of the DS hand-held soon saw it reclaim the number one position.
Similarly, the console market has been the scene of a momentous battle of the titans – made even tougher when Microsoft entered the fray with its Xbox three years ago.
Nintendo had a good run with its cartridge-based N64 system, but lost its way when it tried to compete with its first disc-based console the GameCube, which allowed the competition to streak past.
However, Robert Saunders, Nintendo representative, told CRN that its most recent success is down to its ability to adapt.
“Nintendo is doing very well globally at the moment and DS was the best-selling video games console in the UK last year,” he said. “This year is a very buoyant time for the company with the share price going up and up.
“This change has come about from a whole new approach that Nintendo has taken in targeting non-gamers. For example, our Brain Training games on the DS appeal to people who have never thought about playing games before. This is what the strategy is about at the moment. In targeting non-gamers we have made the console interface simple and non-threatening. We admit that the GameCube was not the success we hoped it would be.”.
However, he said the hardware was only one part of the story.
“At Nintendo it is all about coming up with new and compelling titles, not just churning out sequels,” he said. “It is also important to provide software that makes full use of the hardware. Everything we do is about playing and having fun – all at an affordable price point.”
Nintendo plans to not only sell to traditional retail outlets, such as Game, but to also branch out into supermarkets and other areas.
A representative from Dixons Stores Group agreed that Nintendo was on a roll in terms of sales, but said the competition was still very close.
“Nintendo is doing very well in the market at the moment and the stock literally flies off the shelves,” he said. “Its success is definitely down to its appeal to different markets, with the emphasis on family and party gaming, and having fun.
“As long as Nintendo continues to innovate in gaming it should keep its strong position, but it is not going to be an easy ride.”
Market watcher IDC said the console market is in the middle of a transitional phase. Microsoft’s Xbox 360 was the best-selling console for 2006 because it enjoyed almost a full year’s lead in the market.
However, Nintendo is the only one of the three manufacturers working to grow its accessible market by broadening its audience beyond the traditional market, the analyst claimed.
Billy Pidgeon, program manager of IDC’s consumer markets’ gaming program, said: “Nintendo has abdicated the specification war, leaving Sony and Microsoft to slug it out. We believe concerted efforts to broaden the appeal of video games beyond the traditional enthusiast/hardcore base, will deepen the industry’s penetration. This is good news for an industry that seemed to be receding last year due to over-saturation of the core base.”
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