Court Rye

Market Research

Nintendo DS – Marketing Strategy

Problem/Situation Description:  Ten years ago Nintendo dominated both the console and handheld gaming industry.  Today the gaming industry has grown so much that it is competing directly with the movie industry!  Growth in this industry is occurring in the demographic of 18-34 year olds.  Nintendo is primarily focused on 5-17 year old gamers with its first party software, especially in the handheld gaming market.  As the industry expands Nintendo is struggling to retain market share percentages as their primary market of young male gamers is already saturated.

Marketing Objectives:  Increase Nintendo’s market share and boost sales without losing touch with the current market of 5-17 year old males.

Target Audience:  The suggested target audience for Nintendo to expand towards is 5-17 year old females.

Budget:  The three tools suggested for reaching the target consumer most effectively are TV commercials, movie theater pre-show trailers, and the actual casing and packaging of the product.  A high quality 30 second commercial is estimated to cost $100,000 to $350,000 dollars.  Movie trailer slides are estimated to start at $1500+ for a four week period.  Casing and packaging redesign costs are unknown but estimated to be relatively small when spread over the number of units being produced.  Total costs for the Nintendogs Pink DS promotion would be nearly $30 Million dollars over the span of four months.

Strategy:  By combining packaging and targeted advertisements in Television and pre-movie ads Nintendo will be able to attract young females age 5-17.  This demographic has not traditionally participated in video gaming outside of cell phone games and digital “pets” however the interactive DS platform combined with female targeted software such as Nintendogs offers a winning strategy to tap into this market.  It is important not to alienate the young male demographic that is Nintendo’s primary market.  Ads will be strategically placed and limited in their feminine content for certain listings.

Results:  The Nintendogs title is currently under development by Nintendo and is only offered in Japan (it was not yet released at the time of this report).  Nintendo also does not currently offer special edition colored DS units.  Our research is ongoing and because of the nature of this being an academic piece it may be hard to test the results of the strategy without the release of Nintendogs in the US and a promotional effort by Nintendo to target females.


Nintendo DS – Marketing Strategy
Integrated Marketing Communications Plan

4/15/2005

Court Rye, Ross Nudelman, Kimberly Fillnow, Ashley Andrus, Ryan Schick

Advertising and Promotions MKTG 4550


Executive Summary

Nintendo’s DS (Dual Screen) gaming system is the newest in a line of portable handheld gaming systems offered by Nintendo.  Since 1989, when it launched the first Game Boy, Nintendo has dominated the handheld gaming market and focused on a demographic of five to 17 year old males.  Over the past 15 years Game Boy has been challenged by Neo Geo (Neo Geo Pocket), Sega (Game Gear and Nomad), and more recently Nokia (N-Gage).  None of these offerings have been successful at stealing market share from Nintendo who has continued to improve its offerings with newer more powerful systems to challenge competitors as well as backwards compatibility for its’ previously released titles.  On March 24th 2005 Sony introduced the PSP (PlayStation Portable) gaming device aimed at the growing demographic of 18 to 34 year old gamers.  The PSP is still relatively new as of this report but already there has been a shift in handheld gaming as over 500,000 PSP units were sold within the first two days of the US launch.  

Sony has been incredibly successful working with third party software designers in gaining support for its previous gaming platforms (the PlayStation 2) which has put pressure on Nintendo and decreased their market share for the Game Cube system.  When Sony entered the console gaming market with its PlayStation 2 in the United States on October 26, 2000 the pressure was so intense between Nintendo, Sega and Sony that Sega was forced to exit the market3.  Just as Sony was able to enter the console gaming market in the early 2000’s and rise to the top, dominating Nintendo and forcing Sega out, the PSP is currently threatening Nintendo in the handheld gaming market3.  So this prompts our research question, how will Nintendo be able to continue to increase their market share in such a competitive market place?  

Faced with huge competition from the PSP in the 18 to 34 year old demographic, primary and secondary data indicates that Nintendo should reinforce itself as the primary offering for young adults age 5 to 17.  Nintendo will continue to expand into the entertainment industry outside of gaming to increase its intellectual property with the PoKeMoN franchise and strong ties to Nickelodeon and Disney.  This gives Nintendo leverage and a competitive advantage in younger demographic.  New products such as GameBoy ADVANCE video have expanded the feature set of the original GameBoy and Nintendo needs to communicate this competitive advantage to its consumers.

Since Nintendo has not traditionally contracted with third party software developers as strongly as Sony, Nintendo has a distinct opportunity to market itself as the original…first and only in the market.  Furthermore, Nintendo has avoided violence in its’ games (the majority of which are rated E for Everyone) which has pleased parents and maintained its image as being a kid-friendly brand.  With Nintendo’s kid friendly background, the company has a unique opportunity to penetrate a growing market of female gamers age 5 to 17 with offerings such as PoKeMoN and the soon to be released Nintendogs.  Communicating these advantages and positioning itself as a kid friendly brand using “scuba” communications will increase market share for Nintendo and allow the company to dominate in an increasingly competitive market.

Table of Contents


Situation Analysis

Industry The video game market comprises an intricate assortment of participants from a wide range of businesses, including major computer software publishing firms, video game hardware and software companies, publishing houses, motion picture companies, television production companies and education content providers.  Underlying this complex network of contrasting industry cultures is a substructure of small and medium-sized software developers, product design houses, distributors and retailers.  These participants are constantly attempting to combine their talents and strong points, to mix and match their offerings and achieve an optimum blend of profit-making activities.  The end result is that the video game market is highly dynamic and strongly subject to corporate changes and technology development collaborations.  Naturally occurring cycles are enhanced and magnified as the interactive entertainment industry rapidly evolves producing and releasing new and improved gaming devices.

Join now!

The video game phenomenon of the early 1980’s began with a huge increase in demand and has continued with steady increases in the following years.  Consumers have grown away from “passive” entertainment products characteristic of television broadcast and CD audio entertainment.  The ability to interact with a device capable of responding to real-time inputs from the user is a technology that consumers now demand.  The gaming industry today supports a worldwide market of almost $24.5 billion and a US market of nearly $13 billion.

There is a direct correlation between the rise in demand over the last couple of years ...

This is a preview of the whole essay