кейси для індивідуальної роботи 2014 н.р. / Nintendo Co Ltd in Toys and Games
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COMPETITIVE POSITIONING
Nintendo sees lacklustre results despite hardware launches
Video Games vs. Nintendo (Retail Value RSP, US$ Fixed Exchange Rates) 2007-2011
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A: Growth in video games software and hardware market slows, with developed economies beginning to contract and growth was only driven by the emerging markets. Nintendo’s sales slow down after exceptionally strong 2006-2007, but demand for Wii and DS remains strong.
B: Sales of packaged video games software continue to decline in the developed markets, owing to a late console cycle.
Nintendo’s sales continue to fall in key markets despite the success of Wii Sports Resort.
B C
2010 |
2011 |
Video Games Hardware
C: Nintendo underperforms against video games market, as 3DS launch fails to live up to expectations, and fails to replace falling sales of DS portable consoles. Its Wii console likewise has poor sales largely due to few software releases.
© Euromonitor International |
TOYS AND GAMES: NINTENDO CO LTD |
PASSPORT 11 |
STRATEGIC EVALUATION
COMPETITIVE POSITIONING
MARKET ASSESSMENT
GEOGRAPHIC AND CATEGORY OPPORTUNITIES
OPERATIONS
RECOMMENDATIONS
MARKET ASSESSMENT
Nintendo remains the world’s largest video games company
Despite the challenges, Nintendo remained the largest video games company globally in 2011. It had the number one ranking in all regions except Eastern Europe and Middle East and Africa, in both of which Sony had the leading position.
Western Europe and North America accounted for the largest share of Nintendo’s sales, both bringing
US$4.1 billion in retail value sales in 2011. However, Nintendo’s share has dropped in both regions during
2010-2011, from 30% to 20% in Western Europe, and from 24% to 19% in North America.
Nintendo, however, remains weak in some of the emerging markets notably Eastern Europe, where it had only a 4% share of the video games market. The region is predicted to see a 11% CAGR over the forecast period, with potential for even stronger growth provided there is strong marketing, as console gaming remains in early stages of wider adoption in the region.
% CAGR 2011-2016
Nintendo Co Ltd: Video Games Presence and Growth Prospects by Region 2011-2016
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Latin America |
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Asia Pacific |
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5,000 |
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15,000 |
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25,000 |
Market size 2011 (US$ million)
Note: Bubble size shows company share of region in 2011. Range displayed: 3.5 - 25.6%
© Euromonitor International |
TOYS AND GAMES: NINTENDO CO LTD |
PASSPORT 13 |
STRATEGIC EVALUATION
COMPETITIVE POSITIONING
MARKET ASSESSMENT
GEOGRAPHIC AND CATEGORY OPPORTUNITIES
OPERATIONS
RECOMMENDATIONS
GEOGRAPHIC AND CATEGORY OPPORTUNITIES
US set to continue to lead growth in video games
The US will continue to lead globally in terms of video games growth. The unique mixture of strong growth in the target demographic, high levels of consumer expenditure on leisure and entertainment products as well as a strong “gaming” culture will continue to drive sales. However, most of the growth in video games will take place in the second half of the forecast period. The fact that the PS3, Wii and Xbox 360 devices are at the latter end of their product lifecycles will weigh heavily on video games hardware as consumers wait for the next generation of game consoles to be released.
The US benefits from a unique combination of factors that will help to drive growth of video games sales including a large population of consumers under the age of 19, high disposable incomes and a high propensity to spend on leisure and entertainment products. However, emerging markets are becoming an increasingly important source of revenue for video games sales as well. Demographics are a key element of growth in this category. Countries such as India and Mexico benefit from large populations under 19 years of age. Also driving growth, however, are disposable incomes and penetration of broadband.
Absolute value growth (US$ million)
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Video Games: Most Dynamic Markets 2011-2016 and Nintendo Company Share 2011
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Absolute Value Growth 2011/2016 US$mn |
% CAGR 2011-2016 |
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© Euromonitor International |
TOYS AND GAMES: NINTENDO CO LTD |
PASSPORT 15 |
GEOGRAPHIC AND CATEGORY OPPORTUNITIES
Taking the longer view in video gaming
Given the growth in the target demographic of 0-19 year-olds expected to take place in the US with the US ranking third globally in terms of expansion in this target age group over the 2011-2016 period, organic growth for video games is expected to remain strong. This fact combined with its high rate of spending on leisure and entertainment and its rapidly expanding broadband subscriber base make it both a short-term and longer-term opportunity for the category. The US market for video games is predicted to grow by US$5.6 billion over the forecast period, driven by new console launches and digital gaming.
Russia spends 5% of its consumer expenditure on leisure and recreation and will see its broadband subscriber base expand by over 16 million users over 2011-2016. The country will also see strong growth in the target demographic suggesting this market has many of the fundamentals of a vibrant video games market over the forecast period. The Russian market for video games is expected to grow by US$530 million over the 2011-2016 period.
Meanwhile, emerging markets will continue to offer opportunities for longer term growth. While expenditure on leisure and recreation remains low, and piracy rates continue to be a problem, emerging markets offer many long-term opportunities. Broadband penetration still remains rather low in countries like India or South East Asia, but there are encouraging infrastructure developments that are likely to benefit gaming industry. Internet cafes are also an opportunity, and the internet café gaming culture is seeing a boom in South East Asian countries, similar to what was happening in China about 5 years ago.
Nintendo has lost the lead to Sony in many of the emerging markets. Lower entry prices and increasing lifecycle of some of its older models may be the key in growing the share in countries like India. Mobile gaming in particular holds strong potential in emerging markets, and is very likely to surpass the conventional CD/DVD video games sales.
© Euromonitor International |
TOYS AND GAMES: NINTENDO CO LTD |
PASSPORT 16 |
GEOGRAPHIC AND CATEGORY OPPORTUNITIES
The Wii U - and whether it will live up to expectations
Wii U is a new static game console from Nintendo, scheduled to launch at the end of 2012 globally. It is the first new console launch since 2006, and comes at least a full year ahead of next-gen consoles from Microsoft and Sony. Neither of the other console manufacturers have officially confirmed their next-gen consoles, which will give Nintendo a full year lead in trying to establish the platform.
The Wii U brings a few important additions to the typical console; its GamePad tablet-like controller is the most important change, allowing games to be played on the tablet screen in addition to larger TV screens. The idea is to allow players to swap between a TV screen and the controller, thereby giving more options to enjoy the game.
The greatest possibilities for its touchpad screen lie within its positioning as a “second screen” for the TV, which may help Nintendo to win family living room again. There will be a possibility to integrate the controller with TV set-top boxes, and use it as the “second screen” while watching
TV.
Some extra functions will include internet browsing, streaming video from Netflix, and using the GamePad as the controller to TV. Microsoft’s “Smart Glass” technology will aim to compete with Nintendo for the “second screen” function, in addition to the next Xbox rumoured to strongly promote multi-functionality. This is where Nintendo’s oneyear lead will be a great advantage to the company.
© Euromonitor International |
TOYS AND GAMES: NINTENDO CO LTD |
PASSPORT 17 |
GEOGRAPHIC AND CATEGORY OPPORTUNITIES
Nintendo sees price cut as opportunity to widen demographic
The latest generation of portable gaming devices, Sony Vita and Nintendo 3DS were launched in 2011. These devices compete increasingly, however, with smartphones, notably the iPhone for which a large app store offers cheap, casual gaming on the go. Sony has stated that its Vita is intended to compete with smartphones rather than the 3DS. But it is still likely that the two products will to some extent compete with one another.
The move by Nintendo to offer a 3D version of a portable handheld buffers it somewhat against competition from smartphones, but both Vita and Nintendo DS will face even sharper competition from Android and iOS experiences.
Nintendo has suggested that the new reduced price for the 3DS may reduce price as a barrier thereby giving Nintendo access to a wider demographic. However, the new incentives cut into Nintendo’s profits, and did not produce such a wide resonating response.
US$ million
Shrinking Market for Handheld Video Games World, Retail Value RSP, 2008-2011
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Games for Handheld Video Games Consoles |
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Mobile Games |
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© Euromonitor International |
TOYS AND GAMES: NINTENDO CO LTD |
PASSPORT 18 |
GEOGRAPHIC AND CATEGORY OPPORTUNITIES
Where does Nintendo stand in online games market?
Nintendo is typically seen as the weakest of the three console manufacturers in terms of its digital marketplace and online gaming network, with criticisms of limited demo content and a restricted and unwieldy network for live multi-player gaming. While the 3DS was launched in March 2011, the 3DS eShop was not live until June 2011 leaving many early adopters of 3DS without a source of easy downloadable content (DLC) and with Nintendo losing a powerful tool to communicate and market directly to its customers.
The online service came in for criticism for hard-to- remember friend codes which need to be inputted individually for each new online game purchased. This differs significantly from the Xbox Live system which ties each user to a single user account, identified by his/her gamer tag. Unlike the Wii system which does not indicate when friends are online, the Xbox Live system allows invites from non-friends and friends alike who may be actively playing online. Nintendo’s “family friendly” positioning is clearly involved here with stricter parental controls set as default on its online system.
While parents may prefer these restrictions they have often left the hard core gaming community unimpressed. This fact combined with the unwillingness of many software developers to develop for the Wii platform thereby losing Nintendo third party software sales, particularly in the first person shooter category, has weakened Nintendo in terms of its online network.
Xbox 360 has attracted some 25 million subscribers despite charging a yearly subscription fee. Nintendo’s online network remains free at present but the success of Xbox Live suggests that users are willing to pay for a network that offers functionality and flexibility. Nintendo may miss an opportunity if it does not improve its online service and adjusts its model.
© Euromonitor International |
TOYS AND GAMES: NINTENDO CO LTD |
PASSPORT 19 |
STRATEGIC EVALUATION
COMPETITIVE POSITIONING
MARKET ASSESSMENT
GEOGRAPHIC AND CATEGORY OPPORTUNITIES
OPERATIONS
RECOMMENDATIONS