1. NINTENDO Competitive Analysis and Strategic Recommendations Prepared by Sudhish Subhash | Theron Korda | Mridul Katial | Sumit Deo M-290A EDGE : FTMBA10 - PaulMerage School of Business

2. Vision Current state BoD Employees Investors Recommendations Conclusion Corporate Vision Expand Gaming Audience Devotion to entertainment business Devotion towards employees Vision

4. Portable Gaming Platform – Nintendo DS

6. Controller free

7. Screen free - 3DTime 3D presentation techniques non bound by CONTENT – games, music, shows Compete against non-consumption Next?? Consumerism and Socializing Time Non-consumers or non-consumer context Vision Company improvement trajectory

10. 63% of parents feel that video games were a positive addition (2008)Current State - Industry

11. Vision Current state BoD Employees Investors Recommendations Conclusion Opportunity Insights Competitors & Substitutes Mega Global Forces Consoles: PS3,Xbox360 PC Games Handheld: iphone, PSP, Gameboy, DS lite Social Gaming: MMORPG, Xbox live, PS network Home Entertainment: Movies, Songs, Netflix, Redbox Upcoming: Microsoft’s Project Natal, Health vault Interactive education: languages, architecture, environmental issues, exploration Health Virtual Shopping Social/interactive gaming Online dating Gesture based interaction Home entertainment E-readers, file management Current State - Industry

13. Focused on what matters in having fun rather than what is looking or having cutting edge

14. Changed the way how game was played: from pushing buttons to moving body

15. Used game for something more than game such as fitness and family entertainment to make this other activity funValue Proposition

18. Built a lot of brand equity over the past 30 years (sold 49 million Super Nintendo Entertainment System consoles in the 90s)

19. Captures a broader demographic than other console makers

20. Solely focused on gaming, unlike competitors Microsoft and SonyCurrent State - Nintendo

22. Not known for sophisticated graphics

23. Popularity of the Wii seems to have peaked

24. The hierarchical nature of the company may cause it to not respond quickly enough to the threat of an insurgent Current State - Nintendo

26. Leverage first mover advantage, bargaining power and easy customer recall

27. Utilize global presence and geographical diversification to reduce business risk

28. Reduce dependency on suppliers

29. Balance hardware and software focus

30. Diversify range and appeal to serious gamers

31. R&D to include sophisticated graphics without significant costs

32. Adopt a flat structure to ensure faster response to threat of insurgentsCurrent State - Nintendo

35. Online gaming continues to expand at a breakneck pace

38. Focus on Online gaming segment

39. Incorporate Social Networking games

40. Target ‘mobile’ gaming segment

41. Leverage the power of home networking and entertainment delivery technologies

42. Integrate Wii with basic activities (Extend offerings like Wii Fit)

43. Online promotion of specific games

44. Manage shorter product lifecycle efficiently

45. Adapt to changes in consumer preferenceCurrent State - Nintendo

47. Product : Project Natal

48. Place : Target Advertisers

49. Price : Competitive ($150)

50. Position : Casual GamersAssumptions Realism – More effective representations and interactions in 3D Hardware-less controls Capabilities Strengths: Brand awareness, Loyalty, Presence Weaknesses: Manufacturing costs Competency: Operating Systems/ Computing Vision Current state BoD Employees Investors Recommendations Conclusion 4 Corner’s Analysis for Insurgent (Microsoft) Current State - Competitor

52. Ensure that Nintendo 3DS (pipeline) is positioned correctly

53. Partner with 3D holographic companies (Musion)

54. Partner with Cisco (Telepresence)

55. Acquire smaller players with a potential to disrupt1UP Current State – Nintendo Vs Competitor

56. Partner with other companies Execute Execute Build in-house Vision Current state BoD Employees Investors Recommendations Conclusion ? SHORT-TERM STRATEGY A Y N Y N Strategy

57. Vision Current state BoD Employees Investors Recommendations Conclusion SHORT-TERM STRATEGY B Multi controller ? TouchscreenWii - One Controller, Multiple Uses Strategy

58. Vision Current state BoD Employees Investors Recommendations Conclusion SHORT-TERM STRATEGY C YOO can control your emotions EMOTION SENSING Strategy

59. Vision Current state BoD Employees Investors Recommendations Conclusion SHORT-TERM STRATEGY D Cater to a broader demographic From ages 5-95 yrs Strategy

60. Vision Current state BoD Employees Investors Recommendations Conclusion Milestones Strategy

61. Vision Current state BoD Employees Investors Recommendations Conclusion LONG-TERM STRATEGY Strategy

63. Gaming Focus: Nintendo is dedicated to games, while competitors worry about broad high tech and electronic sectors.

64. Strength of Brand: Customers know that they can expect quality and creativity from Nintendo.

65. Scale: Nintendo has the capability to launch the next gaming revolution on a global scale.

66. Sustain: Nintendo must continue to build on its success to maintain market share Employees

68. Knowledge Base: Key individuals that brought us Wii and Nintendo DS are assigned to the project.

69. Research & Development: Multiple R&D professionals will be summoned to experiment and collaborate on the project, and continue the rich development tradition of Nintendo.

70. Resources: The executive team is committed to providing the necessary capital, both human and monetary, to make the next gaming venture as successful as the last.Employees

72. Infrastructure: Communications providers are crucial participants as Nintendo needs to secure network capacity.

73. Content Developers: Nintendo needs allies in independent content providers that share the vision of the possibilities of the new gaming platform.

74. Manufacturers: Outsource production to best-in-class gaming hardware manufacturers.

75. Financial Support: Communicating value to ensure continued financial backing from investors and lending institutions is key.Employees

76. Vision Current state BoD Employees Investors Recommendations Conclusion Our Goal – You are the game

77. Vision Current state BoD Employees Investors Recommendations Conclusion Its perfect time to launch the next big innovation NINTENDO YOO!! Financial Health Analysis

78. Vision Current state BoD Employees Investors Recommendations Conclusion Nintendo transformed the game console market in 2007 with launch of Wii. Sales jumped 104% over an year. We have reclaimed our throne as #1 Console producer. Revenue Analysis - Retrospect

79. Vision Current state BoD Employees Investors Recommendations Conclusion 35% 40% Over 75% of our installed base for new products are in the US and Japan, with our diversification strategy we shall target emerging markets and markets withhigher disposable income for the simultaneous launch of Nintendo YOO Revenue Channel Analysis - Retrospect

80. Vision Current state BoD Employees Investors Recommendations Conclusion Even with conservative estimates (50% of Wii figures) accounting for saturation and increased competition we see a CAGR of 40% Revenue Forecast – Nintendo YOO

81. Vision Current state BoD Employees Investors Recommendations Conclusion is the Industry Leader in Console Manufacturing - Operating Margin of 23.4% Our Competitors lose about $150 to $300 per unit sold. They extend their revenue cycle over the sale of software, licensing and royalty Competitive Environment http://www.joystiq.com/2005/12/28/xbox-360-costs-715-to-make/http://en.wikipedia.org/wiki/PlayStation_3

82. Vision Current state BoD Employees Investors Recommendations Conclusion is the Industry Leader in Console Manufacturing - Operating Margin of 23.4% Our Competitors lose about $150 to $300 per unit sold. They extend their revenue cycle over the sale of software, licensing and royalty Competitive Environment http://www.joystiq.com/2005/12/28/xbox-360-costs-715-to-make/http://en.wikipedia.org/wiki/PlayStation_3

83. Vision Current state BoD Employees Investors Recommendations Conclusion Nintendo enjoys the lion’s share of the console market Strategic Advantage: Highest Installed Base will provide a huge advantage to convert Wii ‘Fan Base’ into YOO customers. Nintendo DS and Gameboy Advance – 42% of revenues Strategic Threat: Decline in sales of the Handheld account for 45% loss in revenues Threat: iPhone, iPad Competitive environment http://www.edge-online.com/news/ps3-takes-31-per-cent-market-share-in-q1-report

85. Cross Functional Steering Committee

86. Timeline of >18 and <30 MonthsKEY FEATURES 1. Centralized team in each geography (to understand growing demographic trends) 2. Steering committee will assure delivery/termination (no premature swap ins/out) 3. Lucrative product lines will be adopted globally (Technology has no barriers) Innovation Model http://www.innovationtools.com/PDF/Integrated_Innovation_PLI.pdf

88. Dynamic Marketplace

89. Technological Innovations

90. Cloud computing

91. Transition towards the new normalConclusion