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Nintendo Switch: Shifting from Market-Competing to Market-Creating Strategy

Published 02 May 2019
Reference 6486
Topic Strategy
Region Asia
Summary

Nintendo languished in last place during the console wars of the early 2000s, with game industry analysts suggesting that the Kyoto-based firm exit the gaming console market altogether. Instead, Nintendo used Blue Ocean Strategy to redefine market boundaries, creating the best-selling video-game console ever, the Nintendo Wii. Targeting noncustomers, the Wii outsold Sony's PlayStation and Microsoft's Xbox combined, until the market was disrupted by smartphones and tablets. Mobile technology targeted the same noncustomers, offering easy-to-understand games and controls, and Wii sales suffered. Nintendo initially responded by introducing a tablet-like console, the Wii U, a poor copy of the tablet experience that was a dismal failure. Stepping back, Nintendo again used Blue Ocean Strategy to "value innovate" with the Nintendo Switch, the only console to outpace the Wii in sales, and by moving into adjacent markets, working with businesses in which it held a minority stake to release the wildly popular Pokémon Go and other mobile games.

Teaching objectives

• Explore how strategy can be used to shape industry structure and market space, and the importance of linking technology to value. • Understand that businesses go through ups and downs, and that in an up-phase continually value innovating is as important as in a down-phase. • The importance of long-term growth, balancing and planning a product portfolio for the right balance between earnings and growth. This case uses Chan Kim & Renée Mauborgne’s Pioneer-Migrator-Settler Map to map Nintendo’s product portfolio over time and explain its performance.

Keywords
  • Computer software
  • Value innovation
  • Blue ocean strategy
  • Strategy
  • Disruption, Wii
  • Switch
  • Videogames
  • Video game consoles
  • Mobile games
  • Sony
  • Nintendo
  • Nintendo Switch
  • Microsoft
  • Gaming
  • PlayStation
  • XBox
  • Market creating strategy
  • Blue Ocean Shift
  • Strategy
  • Competition
  • Q31819