Earlier we delved into the SWOT Analysis of Sony Corporation, a Japan based globally renowned electronics company. This time, we’ll take a look at the SWOT Analysis of Nintendo and dive deep into the company’s workings.
Nintendo is the leading video game creator and hardware manufacturer. Their TV and mobile-connected consoles, as well as their games, have raised the standard for engaging families with fascinating and difficult games.
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To better understand the route behind Nintendo’s continued expansion, let’s start with the company, its founding, financial status, products, and competitors using the SWOT analysis of Nintendo.
Nintendo was founded in Kyoto, Japan, roughly 130 years ago as a toymaker, and they were noted for their pioneering attitude. Originally known as Nintendo Karuta, the firm was started by artisan Fusajiro Yamauchi who created handcrafted hanafuda playing cards. Nintendo released its first video game system, the Color TV-Game, in 1977, after branching into several fields of the industry during the 1960s and obtaining legal standing as a public corporation under the present corporate name.
Nintendo Color TV-Game
Nintendo contributed to the growth of the computer gaming industry and continue to build a name for themselves with startling and inventive goods. Nintendo’s Game Boy, Wii, Nintendo DS, Nintendo 3DS, and Nintendo Switch consoles are among the most popular in the business.
Nintendo has a branch in Europe that was founded in 1990 and operates offices in the United Kingdom, France, Sweden, and Germany, among other places.
|No. of Employees||6,547|
|Market Cap||¥6.571 Trillion (2021)|
|Annual Revenue||¥1.759 Trillion (2021)|
|Net Profit||¥480.376 Billion (2021)|
Products of Nintendo
These are the products produced and sold by Nintendo:
- Toys & Cards
- Home Video Game Consoles
- Portable Video Game Consoles
- Video Games
Competitors of Nintendo
Following are the few major competitors of Nintendo:
- Activision Blizzard
- BenQ Corp.
- Electronic Arts
SWOT Analysis of Nintendo
1. Strengths of Nintendo
Let’s start with the S of the SWOT Analysis of Nintendo – Strengths. These are the internal factors that have contributed to Nintendo’s constant growth and reputable status.
- Extensive distribution network – By having its presence worldwide, Nintendo has built an extensive distribution network. By possessing this extensive distribution network has helped the company to increase its sales as well as grow its market share.
- Broad variety of games – The company has developed a huge variety of games like adventure, sports, simulation etc which caters to the needs of all types of gamers. During the coronavirus pandemic, they had developed a game called Animal Crossing which was one of the most popular games.
- Strategic partnership – Nintendo’s partnership with Disney to produce various products in Japan not only benefited both the companies but also helped Nintendo to be listed on Kyoto and Osaka stock exchanges.
- Competitive pricing – During the launch of their products Nintendo launches them at an expensive price but to attract more customers they reduce the prices of their products this helps them to compete with the free games available on mobile phones, as well as on gaming consoles.
- Decades of experience – Nintendo having been launched more than 130 years ago has been a popular choice among gamers for the types of games they develop, they have the proper experience of understanding the wants and needs of their customers by developing the best products consistently.
2. Weaknesses of Nintendo
The Weaknesses of Nintendo’s SWOT are what puts the company at a disadvantage in some aspects. They are also internal factors that the company can control and work on.
- Slow response to demand – During the coronavirus pandemic, when the lockdowns were imposed worldwide demand for Nintendo’s products increased drastically especially their popular gaming console Nintendo Switch. But Nintendo didn’t keep supplying the products consistently which led to worldwide shortages and stock out’s on various E-commerce platforms.
- Product failure – Wii U a gaming console launched by Nintendo did not succeed in the market for a variety of reasons such as the product was extremely overhyped, the product being inconsistently marketed, it was manufactured with low-quality components and it was extremely overpriced. The launch of Wii U by Nintendo tarnished the company’s reputation.
- Over-Reliance on developed economies – Nintendo pretty much relied a lot on developed countries like Australia, Japan, South Korea without knowing the saturated nature of these economies due to the presence of several companies competing for market share, by over-reliance on developed led the company to under rely on developing countries.
- Overdependence on switch – Switch, one of the most popular gaming platforms launched by Nintendo helped them generate more than 50% of their revenue in the year 2020 which amounted to about 8.8 billion dollars. But the company only focused on Switch leaving aside their other products which could harm the company financially, if the switch loses its popularity in the coming days the company will face a lot of financial repercussions.
- Growth of counterfeit products – One of the main reasons for the rising availability of counterfeit products of Nintendo are that the company does not enforce intellectual property rights in some regions so others take advantage of the situation and manufacture and sell counterfeited products of the company which tarnishes the company’s reputation and image.
3. Opportunities for Nintendo
Now we’ll dive into the O of the SWOT analysis of Nintendo. Here, we will grasp the possible options that would place Nintendo at a competitive advantage. Opportunities are external circumstances that pose the company with a favourable environment.
- Diversify offering – Nintendo has a diversified product catalogue with a large variety of consoles, games and other products. Nintendo can enhance the diversity of their products as they have numerous wholly-owned subsidiaries worldwide who can create new products and services to enhance the product diversity and increase their product catalogue to cater to the latest demands of customers.
- Invest in mobile games – As the number of global mobile users are increasing, so are the number of people who like to play mobile games. Statistics tell that by the year 2022 the global mobile games market is to make around $94.5 billion. Nintendo can take advantage of this lucrative opportunity by developing mobile versions of its popular games.
- Focus on emerging markets – Nintendo should start focusing on countries whose economies are emerging like China, India as it can be a great move to increase their reach and have increased profits for the company as they will be to find a new customer base who will buy their products and services, as they have already made their market share in USA, Japan, Australia they should focus on emerging markets.
- Adopt Virtual reality – As there is advanced technology coming into the world companies should make full use of it. Nintendo can integrate virtual reality in some of its most popular games by providing a VR headset along with their gaming consoles as it can enhance the experience of gaming and provide a realistic touch to gamers.
- Enhancing online gaming – Nintendo can integrate online gaming in some of its most popular games, as already some of Nintendo’s competitors like Electronic Arts and Activision have integrated it in their games by doing so Nintendo can give a tough competition to its competitors.
4. Threats to Nintendo
Last under the SWOT Analysis of Nintendo are the Threats. These are external elements that disrupt the strategies and workings of the company, putting it at a disadvantage.
- Technological revolution – As internet penetration is increasing rapidly worldwide, tech giants like Google and Amazon are trying to increase their customer base by acquiring online gaming platforms which are also taking over the market share of Nintendo, so Nintendo must adapt to changing technology.
- Stronger substitutes – As the world is evolving so is the gamers preferences, a lot of gamers are shifting from gaming consoles to online gaming platforms as well as to mobile consoles, so Nintendo must take appropriate actions and make sure that they are adapting to the market trends as they change.
- Stiff competition – As there are a lot of companies in the gaming sector so there is stiff competition among brands, companies like Sony, Amazon, Electronic Arts, SEGA with each of the brands having their gaming consoles and games competition is increasing on a day to day basis.
- Increased Piracy – With the advent of the internet there has been an equal number of good and bad benefits from it. One of those is piracy, piracy impacts any brands a lot like the products of the brand are available at lower cost, similarly, Nintendo’s games are pirated wherein the cheaper full version of the games are available in the market which affects the brand.
- Shifting demographics – The places where Nintendo had already made their market share like Europe, wherein their market share is decreasing due to ageing population as the youths of these regions are declining so they will have to shift to regions which have a higher youth population.
With this, we conclude the SWOT Analysis of Nintendo. This detailed study helps companies and their customers know where they stand in the market. In the following section, let’s briefly conclude the takeaways of this analysis.
Nintendo has gained immense popularity and is one of the most important companies in the world. Despite facing a lot of competition they have become the market leader and have stood the test of time. Nintendo’s success can be reiterated by its market segmentation and innovation. Its broad variety of games, smart pricings and strategic partnerships place them on the top. However, Nintendo should focus on improving its market reach by tapping into the mobile gaming market.
Additionally, when Nintendo ups their digital marketing strategies, they will gain not only from its cost-effectiveness, but will also reach a larger audience than normal via various channels such as SEO, emailing, content marketing, and social media marketing.
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