Nintendo’s Financial Crisis and its Strategic Dilemma

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Nintendo’s Financial Crisis and its Strategic Dilemma

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Title: Nintendo’s Financial Crisis and its Strategic Dilemma
The case of a company that went from holding market leadership and industry record sales, to the most severe financial crisis of its 125 year old history
Author: Musso, Matteo
Abstract: This thesis analyzes “Nintendo Co., Ltd”, an undiversified hardware manufacturer and software developer active in the video-games console industry. After some extremely successful years during what is called the “seventh generation” of consoles, the Japanese company experienced its first-ever annual loss. Soon after, the eighth generation of consoles started and Nintendo launched, one year before the competitors, its new console named Wii U. Nintendo missed its sales projections for this brand new system by over 300%. The financial results registered in the first year from launch of the Wii U were lackluster. Based on the studies conducted on financial and qualitative data, it is argued that Nintendo’s lackluster financial results originated from a strategic dilemma. This dilemma consists in the issues of strategic management that Nintendo faced after having launched and positioned its new Wii U model in the industry. Specifically, this work investigates the strategic reasons capable of explaining why Nintendo’s next generation system underperformed at launch and then throughout the the whole period of time ending with the Fiscal Year 2014. This work aims to understand if Nintendo’s latest console missed nearly every projection because of corporate-strategic missteps that occurred during this period of time. The objective is to identify those strategic oversights for then analyzing and discussing them. The method is tailored in a way that allows to collect relevant information from primary sources (interviews with top management and official document from company) as well as press articles from specialized newspapers and online magazines. The research question (and subquestions) aim to understand the nature of Nintendo’s strategic dilemma as well as to investigate the existence of its competitive advantage in the time frame considered. One of the main conclusion of the analysis conducted for this work shows that Nintendo did not adopt a clear strategy for the Wii U model hence resulting in an unsuccessful attempt of differentiation.
URI: http://hdl.handle.net/10417/5079
Date: 2015-03-02
Pages: 96 s.
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