Nintendo's Disruptive Strategy: Implications for the Video Game Industry

Over past 30 years, video games industries have become an integral part of the lives of the people living in developed countries particularly. Video games now capture a similar market size as the movie box office and music sales.

Nintendo, a video games company, had become Japan's most valuable listed company after Toyota by September 2007. Its market value had tripled since the launch of the Wii. Nintendo's roots could be traced all the way back to 1889 when Fusajiro Yamauchi, the founder of the company; started manufacturing playing cards. Since then, the company had become the Nintendo Playing Card Company. By 1963, the company had gone public. During 1970 to 1985, Nintendo began focusing on the manufacture of electronic toys and entered the emerging field of video games. In 1991, the year Nintendo launched the highly popular Super NES in the US.

For many years, Nintendo was a dominant player in the video game industry. It had sold more than two billion games since 1985. Suddenly, after the debut of Sony PS, it was no longer the leader of the video game industry. Nintendo tried various strategies to counter Sony. However, competition continued to intensify, and the PS2 also captured a significant portion of the video game market, maintaining a dominant position in the industry. In May 2001, Microsoft too entered the video game market by introducing the Xbox console, leaving Nintendo with an even smaller piece of the market. In 2002, Nintendo appointed Satoru Iwata as president of the company to help the company develop a brand-new vision and approach.

It was begin with unorthodox path or disruptive strategy by breaking same mainstream cycle that games console always tied. Most of the time, they're focused on existing gamers and ignored the non-gamers and occasional gamers. This industry is dynamics and the pursuit of superior technologies is relentless.