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Nintendo

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ALI FARHOOMAND

NINTENDO’S DISRUPTIVE STRATEGY:
IMPLICATIONS FOR THE VIDEO GAME
INDUSTRY
For some time we have believed the game industry is ready for disruption.
Not just from Nintendo, but from all game developers. It is what we all need to expand our audience. It is what we all need to expand our imaginations.
- Satoru Iwata, president of Nintendo Co. Ltd1

In the 2008 BusinessWeek–Boston Consulting Group ranking of the world’s most innovative companies, Nintendo Co. Ltd (“Nintendo”) was ranked seventh, up from 39th the previous year. 2 This recognised Nintendo’s significant transformation into an innovative design powerhouse that had challenged the prevailing business model of the video game industry.
In 2000, when Sony, …show more content…

During the period 1970 to 1985, Nintendo began focusing on the manufacture of electronic toys and entered the budding field of video games [see Exhibit 1].
Interestingly, 1991, the year when Nintendo launched the highly popular Super NES in the
US, was also the year that saw Nintendo’s vision become Sony’s opportunity—and the creation of what could be described as Nintendo’s “greatest challenge” for over a decade — the Sony PlayStation (“PS”). Nintendo had wanted to incorporate CD-ROM into their Super
NES, and Sony had agreed to create the PS for this purpose. However, over the next two years, conflicts of vision between Nintendo and Sony continued, and the two finally parted ways.
Nintendo went ahead with Philips technology, 4 and Sony was left with the PS, which the company decided to continue developing. Given Sony’s clout and resources, when the PS and its wide range of games were finally released in Japan in 1994, the console was an instant resounding success. In 1995, Sony released the PS in the US, totally uprooting Nintendo’s established name in the industry.
For many years, Nintendo had been a dominant player in the video game industry. It had sold more than two billion games since 1985. Its top-selling series included non-violent and easyto-play games such as Super Mario Bros and The Legend of Zelda. The huge success of its games portfolio could be attributed to its appeal to all age groups across different

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