Business Strategy of Nintendo. This section will examine the industry in which Nintendo operate in and will also identify the competitive factors.

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This section will examine the industry in which Nintendo operate in and will also identify the competitive factors.

The performance of all companies is affected by many external factors such as the economy and population demographics however the most important factors in a company’s macroenviroment that have the biggest strategy shaping impact typically relate to the company’s immediate industry and competitive environment such as the actions of rivals and ever changing buyer demand.

What are the industrys dominant economic characteristics?

 The video gaming industry overall has generally been in a decline since 2007  the industry according to mintel is expecting to see a further fall of 11.7% this year.  The grim reading continues and shows the current woes this industry is facing when compared  to its value in 2007 which was £1937m compared to 2011’s estimates which sees the industry worth only £790m.

The recession has played a great role in the current decline we are seeing, as consumers have been put off with high ticket purchases and decreasing amounts of disposable income for consumers to spend, a story which has become familiar throughout the world.

The industry has 3 major companies which compete on a global level Nintendo being one of them, the other two are Microsoft with the Xbox 360 console and finally Sony with their Playstation brand. These 3 currently dominate the market but are facing a severe threat from the Smartphone industry which will be looked at later.

Nintendo Gaming guru( …..his name) in an article for the ‘economist’ website noted that the current decline in sales in the market may be for the current choice of games on offer in the industry It also must be noted that this current generation of games consoles have gone more than half way past their product cycles and we are seeing the maturity phase currently where sales generally begin to decline.

Nintendo has seen a sharp drop in DS and Wii sales, with the Wiis sales falling from 3million units sold to 1.5million units a 50% drop, However the Sony and Microsoft have fared slightly better with Microsofts sales up slightly year on year mainly due to the launch of their new Kinect add on for the Xbox 360, whilst sony have had a 18% decline with their Playstation 3 console.

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The video games industry in particular Nintendo and Sony have had to lower prices to increase demand, Nintendo successfully lowered prices in August 2011 for their new ‘3DS’ which experts believed the price was inigially too high for the market. With manufacturers lowering prices to try to stimulate growth this has had a satisfying effect for the manufacturers with both Sony and Nintendo increasing sales in some cases such as the ‘3DS’ there have been a 3 fold increase in sales . Also Nintendo will be pleased that although the ‘3DS’ launch had slow sales in the first, three months the ...

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