Nintendo’s sustainable competitive advantage

How their competition strategy turned them into targeting non-competition

Photo by George Kedenburg III on Unsplash

While it may sound difficult to possess a sustainable competitive advantage in a market, Nintendo appears to have one. As much I’m tempted to conclude Nintendo has “sustainable competitive advantage” , it’s probably more suitable to call what they have is “Sustainable Advantage” because they are serving in non-competition’s segment of late.

To be able to outline their Sustainable competitive advantages, let’s examine some business initiative from Nintendo and their motives behind these initiatives.

Product Innovations

Nintendo is known for their innovation in product development. It’s more than just another case study for business executives. In this section, I attempted to show only few successful launches. We can learn also from their unsuccessful products as anti-logs.

[1] Nintendo Entertainment System (NES) & Famicom series: (1983)

• Before NES entered the market, the market was limited to only a niche of ‘gamers’ in the market.
• NES/Famicom series has taken Nintendo close to a larger audience base by both value offering and branding strategy. The younger generation of gamers.
• Better quality games, easy to use console and a brand of console that reflects family entertainment.
• Higher engagement quality with innovative control systems to play the game.
• For the industry, NES saved the market from collapsing in 1983

[2] Game boy series: (1986)

• A handheld console which is very easy to use for the players and focus on the actual game. Additionally Game boy claimed to have 2x the battery charge life which makes it very important for a portable game console as a player might wander and play. (remember, we complained about mobile battery problems. Nintendo presumed this problem and gave better battery life back in those days)
• Nintendo has brought cable based multiplayer gaming on handheld consoles which made people buy Nintendo and hangout with each other. A network effect and friends connect.
• The control system for this console is key for its success which solved problems its contenders had and built familiarity with NES console controls design.
• Above 2 helped in building Nintendo brand value.

[3] Nintendo DS & 3D series: (2001–2006)

• A touch screen console in 2004 where Apple’s iPod touch /iPhone were released in 2007.
• Nintendo 3D brought a 3 dimensional gaming experience without glasses and has customer experience at its center.
• We can notice here the quality of innovation from Nintendo. Touch screens were possibly more purposeful for a gaming device than a phone. Because touch screens on gaming devices makes experience very personal and so players are more engaged.
• Dual screen display with split screen structure makes the console easier to use. Stylus makes the experience better for those players who do not want to get engaged in the novel interaction of touch screens.

[4] Nintendo Wii series (2008–2012)

• A complete overhaul of expectation from a gaming console till that point by bringing in sensor based application to console in 2006 (Again going for a comparison with iPhone being only the next device which had consumer to experience sensors)
• Even for sensors, they were more purposeful for a gaming device than a phone as it can make playing games more real and physical. Unlike for phones, having sensors won’t make any sense if there are no games. Some sensors for a ‘phone’ are meaningless.
• Wii had removed a possible Stigma among non-gaming audiences about gaming is hard due to controls and heavy story etc. They made it easy for family and friends to use it as a playful device than a hardcore gaming console.
• The Nintendo Wii device has elevated Nintendo’s brand value to all time high.
• While Nintendo innovated a completely new console with Wii U, it lacked the legacy of all the innovations that Nintendo has brought. Novelty and unique value. By this time, the market has got the taste of touch screen devices and Wii U has not shown any solid reason to buy. Solely because of its brand value, Wii U had shown some share of sales.

[5] Nintendo Switch (2017–2020)

• Switch is an out of the world console that is compatible with Wii in its innovation style.
• Easy of use in Nintendo is for hardcore Gamers to use/play games in portable way & casual gamers to try their hands on high fidelity games.
• The market target of this console is very unique and unexpected by its competitors.
• And, this another most purposeful design given the current ecosystem of gaming industry of growing mobile gaming market and sustaining console gaming market.

Consumer centric Innovations

Nintendo has innovated on some out of the world innovations during 1990 and 2000s which are not direct product innovations. But, these innovations defined what kind of brand is Nintendo and which explains why Nintendo has been always a Blue ocean owner

[6] Nintendo Game counselors (1997–2005)

• Nintendo found that it’s strategy of diving into a new market has to be backed up by a strong support system as players are getting stuck at playing games.
• Nintendo wanted to make the game experience easy to players in the US by providing a helping hand of a game counselor.
• This idea has become an instant success. This made the life of young gamers Easy

[7]Nintendo Power Magazine (1988–2012):

• Nintendo Power is a magazine aimed at providing assistance to new generation gamers, young gamers, old aged new gamers to provide help on how they can play and win the game.
• It also instructs players about some detailed game mechanics which are some sort of cheats to win the game.
• The whole purpose of this magazine is to provide detailed information of how to play & win Nintendo games on their latest consoles.

Brand value:

Brand reflects how consistently a company performs in the quality and value they offer. While all the earlier innovations in

Today, it’s not easy for either a new company or an existing company to build this kind of a brand through its innovations.

In summary, we can see there are common attributes that make Nintendo unique:

1. Ease of use (Simplicity)
2. Experience & purpose focused Innovation
3. Target of non-gaming & gaming audience
4. Brand value/Trust

At present, I don’t think Nintendo can not be seen as a competitor for just one segment in the gaming industry. Hence, I would like to call these advantages ‘Sustainable advantages’ than Sustainable competitive advantages.

Especially in case of Nintendo, they does not appear to compete with anyone.

More about Nintendo’s Innovation metrics here!