Nintendo’s Innovation metrics
How their innovations impacted their business & market?
This article is in continuation to Nintendo’s sustainable competitive advantage wrote here!
Measuring success of innovation is important especially in the cases of companies whose business model is based on innovation of new products55. We’ll examine the success of Nintendo’s innovations of Nintendo with metrics explained below.
Lets assume the prior 3 years R&D expenditure is directly attributable to the new product launch and compare sales of the consoles to the spending in R&D, we can build the following metric to compare the innovation in the last 2 decades of Nintendo.
Let’s measure metric as Innovation’s R&D success metric for this reports reference:
This metric attempts to justify the R&D spend with sales volume from the new product launch. While there are some caveats of time value of sales and staggering sales across months, lets measure other behaviors as well to assess the comparison.
Earning power of new products:
This metric attempts to measure the impact of new product sales in the second year in the market. The significance of this metric is that it tests the false positives that a new product can bring in the first year of sales due to pure brand value or the residue of the first year leftover due to launch dates.
Innovation Impact on revenue
This measure will tell us how much impact on the revenue54 has been brought by new products launched by Nintendo in its second year of the new product
Market share in 2nd year of release
This metric shows the direct impact of Nintendo consoles on the market share57.
💡In summary:
- These metrics indicate that Wii-U is the worst failure of Nintendo. All remaining consoles managed well to make their cut in the market not just maintained sales but beat the competitions in consecutive years.
- Wii and Switch stand at the top when it comes to financial success over all Nintendo Innovation strategies.
- Nintendo DS & 3DS consoles are part of an important innovation that proved Nintendo’s new path to success is possible. And, that helped to maintain sales momentum for 9 long years. In fact, 3Ds and DS series has possibly helped Nintendo to focus on Blue oceanic strategies.
