The Industry of Video Games

Since the beginning, the industry of video games has been constantly evolving. In order to prosper in the marketplace, the leading video game console developers should take into account a number of key success factors that define their competitiveness. Among the most significant ones is effective brand strategy. It allows to create unique identity for the company that will distinguish it from other competitors. Developing new cutting-edge technologies on a daily basis as well as their quick adoption should be regarded as of paramount importance. Each aspect of video games can be enhanced; therefore, the right approach to the innovations may result in revolutionary changes in the market. Price and quality stand in close interdependence. While some companies pursue high level of sales by lowering the price, others commit to creation of a very qualitative product and strictly adhere to a policy of high prices. Exclusiveness plays an important role in making an impression upon the consumers and encouraging their loyalty to the company. Competitive advantage relies on the relationship between console manufacturers and game producers. If the number of games that can be defined as different genres becomes larger and available to the customer, the portfolio of this console company becomes various and better. Therefore, it is highly significant to commit to a company’s diversification. Consoles that can offer a variety of superb games with outstanding graphics, audio and game play capabilities command in the market being able to satisfy even a very fastidious consumer.

The SWOT analysis for Nintendo was conducted. According to it, the following features can be distinguished.

Strengths:

  • Excellent brand familiarity and wide recognition of trademarked characters.
  • Many years' experience.
  • Cutting-edge technologies and innovative video game systems.
  • User-friendly interface and the ease of console’s use.
  • Relatively inexpensive.
  • Strong distribution channels and global operations.

Weaknesses:

  • High research and development costs.
  • Loss of leader’s position and a significant portion of market share since company’s peak of success.
  •  Lack of certain options like graphic abilities and advanced online gaming.

Opportunities:

  • Video game industry evolves and expands continuously.
  • Possible extension of target market of video game consoles for non-traditional groups of consumers like female or aging gamers.
  • Globalization results in significant increase in sales.

Threats:  

  • Video game console market is highly competitive.
  • Risk of price volatility.
  • Cutting-edge console technologies have short product life-cycle.

As a result of conducted SWOT analysis, Nintendo clearly has a competitive advantage in the video game console industry. The company possesses ability to research and develop cutting-edge technologies like Wii which lead to revolutionary changes and creation of a new market segment. Development of innovative game systems allows speaking about sustainability of this advantage. Appeal to a very wide range of consumers creates new target markets for exploration. Nintendo focuses on creation of games that are fun to play for any individual. People of all ages are attracted to the game console and, therefore, it results in overwhelming demand even causing product shortages. Being the first entrant into the video game market, Nintendo possesses strong and effective brand which makes all the products of the company highly recognizable. Therefore, sales promotion becomes easier and much more efficient. Long-term experience has helped Nintendo to form and enhance customer loyalty.

Nevertheless, the product life cycle of any cutting-edge technology is rather short. Industry growth and development to a considerable degree depends on the release of new generations of video game consoles. This requires constant research and development of new products that can boost company’s competitiveness and provide Nintendo with steady leader’s position in the video game console market.      

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