1.

0 Discuss the impact of IT/IS on gaming industry

A game is a structured or semi-structured activity. It is usually undertaken for entertainment
and also can used as an educational tool. Game is not just only present interactive or real
time entertainment and game uses all multimedia elements to enhance the game
performance. Nowadays, information system and technologies has been globalized
attributable to the worldwide. Therefore, every industrial and business started to adopt IT &
IS. Gaming industries are implementing the information system and technologies. There are
few impacts of IT & IS in gaming industry that we will further discuss it at below.

First and foremost, the impact of information system on the gaming industries is to ensure
young people play game safely through internet and protected against unsuitable
gaming content by using the PEGI system. PEGI Online was launched in 2007 by ISFE and
complements its Pan European Game Information (PEGI) game classification system
founded in 2002. PEGI offer to the parent an educational tool so that they make sure their
children play the game safely.
Next, the application of information system and technology can creation of new jobs in IT
department. By create or design a new game, it needs a lot of person who expert in IT field.
Therefore, computer programmers, systems analyzers, hardware and software developers
and web designers are just some of the many new employment opportunities created with
the help of information system and technology. It is also one of the impacts of information
system and technology in gaming industry.
Furthermore, the other impact of information system and technology in gaming industry is to
increase the experience of gaming playability. Nowadays, every games were designed
with music. Those video game composers typically use some famous system and software
to insert the music into the games, such as Cubase, Fl studio, Logic , and most popular is
AudioSparx. AudioSparx has one of the largest Rock and Electronic production music
libraries on the web, perfecr for video game production. By apply the music into the games,
it can increase the interest and catch the attention of players. Thus, it can increase the
number of players and directly earn profit for company.

Apart from this, information system also allows gaming producers to reduce the cost. By
using the telecommunication system, the game producer can make the cheaper but more
effective advertisements. Thus, the cheaper advertisement means it can reduce and save
cost as well as attract more new customers and increase their loyalty and confidence.
Telecommunication can be defined as transmit text, data and video information from one
location to another. So, people who able to connect the data communication services can
easily receive a lot of information and knowledge.
2.0 Introduction to Nintendo Company
The company that we selected in this assignment is Nintendo Company. The company is
the oldest video-game company in the world and it had been established in year 1889. In
year 1960, Nintendo originally produced the card-games and after that the company
ventured into different business ventures.

Nintendo was founded by Fusajiro Yamauchi in year 1889 and it is located at Kyoto, Japan.
The very first business for Nintendo was produced a card call Hanafuda cards. In year 1902,
the company had started manufacturing western-style playing cards in Japan. After the card
game, Nintendo Company started the business in electronic games. There are so many
product and system launched out after year 1972. Nintendo Entertainment System was
introduced in 1985. People brought the games like Mario, Zelda for the first time in NES and
it sold over 60 million units. Besides, Super Nintendo Entertainment System was released in
1991. This system contain more games because of more processing power and sold more
than 49 million systems worldwide.

On the other hand, the popular product for Nintendo was Game Boy. Game Boy came out in
year 1989 and become the most successful video game system. The screen was fourcolors-of-gray and also defined as portable gaming. The sales for Game Boy were over 150
million systems in worldwide.

There are other products that very famous such as Nintendo 64, Game Boy Advance,
Nintendo DS, Game Boy Advance SP, Wii, Nintendo 3DS and so on. In year 2014, the most
famous product is Wii U. Currently, Nintendo launching engaging software for players of all
tastes and skill level and continued to provide experiences to players. Nintendo revealed
few new games and experiences in Digital Event at the Electronic Entertainment Expo. In
2

year 2013, the company had make a profit over 7 Billion yen, equivalent to US750 million.
But in year 2012, the financial report showed that the company posted a loss of US530
million. Nintendo Company had turn into profitability in tern of net and ordinary income.

There are many members of the Board of Directors and Auditors. Satoru Iwata is a director
and chairman of Nintendo of America Inc and appointed in June 2013. Genyo Takeda and
Shigeru Miyamoto is senior managing director. The job title for Genyo Takeda is general
manager in integrated research and development division while Higeru Miyamoto is general
manager in entertainment analysis and development division. Besides, there are six
directors in the company and handle different divisions.
3.0 Effective implementation of IT/IS of Nintendo Company
3.1

Nintendo Network

Nintendo network is an online service technology which provides users access online on
Nintendo 3Ds and Wii U system. As Nintendos president Satoru Iwata said that Company
can make comprehensive proposals to consumers by establish a platform where various
services and downloadable games are available for customers to connect via Nintendo
Network service.

Nintendo future plan include create personal account for Wii U, digitally distribute package
software and downloadable payment. Nintendo Wi-Fi Connection has included in Nintendo
Network and competes against PlayStation Network and Xbox system. The Nintendo
network include Miiverse, Nintendo eShop, Club Nintendo and Nintendo TVii.

Nintendo eShop

Nintendo eShop is an online store conducted by Nintendo Network which allows Nintendo
3Ds and Wii U users to access and purchase various games, entertainment and more. Free
demos and new release games will be show on the main page in the eShop which can
easily advertising new games to users for free trail.
Company can collect feedbacks by observation on users comments to do some
maintenance to enhance the quality of the games. Besides, Nintendo eShop also features
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some applications to shape Nintendo be a multi-functional game consoles as it is not just for
gaming purposes but also have other usages that can benefit to daily users.

Applications example like Art Academy SketchPad in Wii U which allow artistic user
especially children to draw creatively on the screen using realistic stylus and touch screenbased controls and can directly save and share through Miiverse, Sparkle Snapshots 3D
camera in 3Ds which can personalize images with various layers of stickers, ribbons, pens,
backgrounds and other 3D effects as can share by use a local wireless connection to send
images to friends or post online, Google Wii Street allow users to post favorite locations on
Miiverse , and viewing photos and share comments with others.

Club Nintendo

Club Nintendo is the customer loyalty program provided by Nintendo. The loyalty program is
free to join and providing rewards in exchange for consumer feedback and loyalty to
purchasing official Nintendo products. Club Nintendo loyalty program offers rewards to
members who collect "Star Points", also known as the Stars Catalogue; the North American
Club uses as "Coins .The points can gained by purchasing and registering certain hardware
and software by Nintendo.

Besides, the points also can be obtained by participating in surveys and invitation new friend
to become a Club Nintendo member. Many exclusive reward items can be redeem or given
to particular Club Nintendo such as computer wallpaper, music soundtrack and mobile
phone ringtones, physical items such as calendars, t-shirts which available in limited amount
and premium reward is able to download Club Nintendo exclusive video games. This
redeemable points system will make players be more participant on downloading certain
apps that able to exchange the things needed, yet more applications able to discover by
players.

In Spain 90's, When players buy a console, a videogame or an accessory in Nintendo

product able to register free membership on filling up a form and the form will submit to
Nintendo's headquarters by mail. Player would receive a Club Nintendo plastic card with
name, a card number and the Mario and Nintendo's logo. The main purpose of this was to
receive telephone service sharing clues and tricks on the games and able to receive the

Club Nintendo magazine for one year free which can easily updated the news and
information about Nintendo games and others.

Miiverse

Miiverse is a social network that allows users to share information in form of pictures or texts,
comments, and able to interact with other users. Miiverse can be access through the Wii U
and 3DS, as social interactions also occur within supported games and applications.
Miiverse also have own Forum webpages which Posts are divided into 4 types of
'communities' such as Game + Application Communities (Posts discuss related to certain
game), Private Communities (Private user communities), News Communities(Latest News
posts)

and

MiicommunityMiiverse

Community

Developer's

Room

Communities

Announcement Communities ( Posts from Nintendo staff to announce update information) .

Players can post some screenshot from game for discussion and can share some tactical on
certain games with others players in order to communicate, make new friends and certain
games strategy can gain some tips or solution through searching forum. Sonic Lost World is
the certain game that can allow players to share game items or equipments with other
players via Miiverse. Miiverse will be more general used by Nintendo users in future game
as Nintendo's president Satoru Iwata stated that Miiverse will be monitored through
software in order to ensure that the content shared by users is appropriate.

Nintendo TVii

Nintendo TVii is a free entertainment platform provided for the Wii U console. Nintendo
TViiallow users to access TV for watching shows and movies by connecting on programs
such as Hulu Plus, Amazon Instant Video, Netflix, and more. All US TV network on board
can be watch with Nintendo TVii. Users can browse TV shows listings to view or select
which type of shows they loved. The Wii U GamePad controller can be the remote on TV as
watching a sports game, the GamePad will provide live player statue and match data
through the screen. In movies and TV shows, it can add thumbnails of the show which user
can share information online with friends through Facebook, Twitter and Miverse. Nintendo
TVii also has full support for TiVo which allow users to record their loved shows on their
TiVo through the Wii U that they can replay the shows in any times they like.

3.2

Nintendo Entertainment System (NES)

The Nintendo Entertainment System (NES) known in Japan as the Family Computer
( Famicom ), is a Nintendo console that make Japan Color TV Game series and first
interchangeable cartridges home console. It also served as the initial console for many
oldest gaming franchises, introduced the third-party licensing model for video games, and
set the standards in control pads for consoles. It released in Japan in July 15, 1983 which
exceptional with its technical superiority and stronger software library. The Famicom offered
extraordinary technical power for the lowest price, able to achieve the sales over 1.4 million
units in first year and as a mainstream console game market in Japan.

In order to compete with other opponents, Nintendo decided to use an outdated Central
Processing Unit (CPU) with use 8bit 6502 processor to keep in cheaper price. The chip can
run a program but unable to perform graphics therefore company will add another chip as
Picture Processing Unit (PPU) to calculate and displaying the graphics. The graphics system
is a separate processor that has its own memory space for images. It only understands tile
maps, sprites and it implements them directly in the video output hardware.

Mario had become one of the best known video game in Nintendo as make Nintendo
become a well-known games industry leader. Nintendo had licensed their popular video
games to other systems, and Donkey Kong become one of the most popularly portable
video game of the early eighties.

Due to piracy and unauthorized cartridges, Nintendo input a "lockout" chip in the NES that
allowed them to control the quantity and quality of games. The fourth pin of the lockout chip
from "lock" to "key" able console to access legal games and convert imports. NES consoles
distribute different lockout chips in different country in order to strict the marketed games
would not work on consoles from another country. This might secure the risk of piracy
games from free downloading websites to protect the copyright of the Nintendo and
safeguard their product quality and standard.

Besides, NES also implementation in computer system where personal computer cannot
read the instruction written in NES because it cannot understand the codes used by NES.
However, it is likely conduct similar instructions with the personal computer. It is possible

NES can rewrite the software function like original yet implementation might be different and
replicate the sound and graphic of the original.

NES also can converting software that will make software be more performing and function
well as it used for target architecture. Emulation is often used by Nintendo writing software
for a new system but still allow using old systems. NES produce a system using a
compatible processor and able to play the original game cartridges which provide games in
good performance and compatibility. NES is the most widely emulated console with the
availability number of emulators. Emulators also come with built-in functions such as create
save point which allow the player to save data in game.

NES Test Station is designed for testing NES hardware, components and games. It was
only use in Nintendo World Class Service program. Customers may bring items to test on
the station with assistance technician. The NES Test Station features a Game Pak slot and
connectors for testing components such as AC adapter, RF switch, Audio/Video cable, NES
Control Deck, accessories and games. The testing of the RF, AV, and AC adapters only
displays either 'Pass' or 'Fail' output when plug in to the test station. The test station can
manually help the user understand the way of using the equipment or repairing with share
out the knowledge to others as everyone can be a self-repairmen when occurred some
technical problem without phone expert technician service.

Famicom Disk System was released on February 21, 1986 by Nintendo as it uses floppy
disk to storage data in Famicom. The device is connected to the Famicom by plug in RAM
Adapter into the system's cartridge port, and attaching cartridge's cable to the disk drive.
ASIC (Application-specific integrated circuit) acts as a disk controller, and the Disk Cards
are used in double-sided, with capacity 112 KB per disk as requiring user to switch sides
during saving gameplay data.

4.0 Strategic use of IT/IS for competitive advantage in Nintendo Company

4.1

Introduction

Porters Five Competition Forces was developed by Michael Porter in 1979. This model
provides a simple perspective for assessing and analyzing the competitive strength and
position of a corporation or business organization (Chapman, 2013). The five forces that
Porter suggests drive competition are as follows:
(a) Threat of New Entrants
(b) Bargaining Power of Buyers
(c) Bargaining Power of Suppliers
(d) Threat of Substitutes
(e) Rivalry of Competitors
The Five Competitive Forces have a direct relationship with the companys ability to serve its
customers and to make a profit. The stronger competitive forces in the industry are the less
profitable it is. An industry with low barriers to enter, having few buyers and suppliers but
many substitute products and competitors will be seen as very competitive and thus, not so
attractive due to its low profitability (Jurevicius, 2013).

Competitive strategies need to be identified based on the understanding of the industry

structures and the way they change (Recklies, 2012). A business should modify its
competitive strategies when there is a change in any of the forces to improve the position of
the organization.
4.2

Porters Five Competitive Forces

4.2.1

Threat of New Entrants

In the gaming hardware/console manufacturing industry, the threat of new entrants in the
video game industry is low. With companies dominating the market place a newcomer to the
industry would face high barriers to entry, such as economies of scale, product
differentiation, capital requirements, switching costs, distribution channel access, and cost
(Nintendo Wii, n. d.).Furthermore, achieving economies of scale of scale in production early
in the life cycle of a new console is highly critical for existing firms. Similarly, in the software
development industry, the barriers to entry are relatively high as well. The main and largest
8

discouragement for potential new entrants is the fact that game development requires very
high startup capital, and the production costs most of the time exceed even those of bigbudgeted movie (Evileagles, 2014).

The threat of new entrants of Nintendo is relatively low given that there are already a few big
names with good reputations and loyal customers. It is possible that a new company could
enter into the market, but the probability of it succeeding and taking customers away from
Nintendo is slim (NintendoGroupCase, n.d).Current industry strongholds, such as Nintendo
and Sony, have refined their business processes and gained economies of scale.
Additionally, new console developers must differentiate their products, but they could expect
the big companies in the industry to retaliate via marketing or pricing (Muncy, 2011).

There is very little patentable technology in game consoles, and most consoles tend to have
similar features and functionality. The greatest barrier to new entry is the economy of scale;
producing consoles is prohibitively expensive unless done on a very large scale. In addition,
a potential entrant would have to develop games to sell alongside the console. An
exceptionally strong marketing campaign would be required since Nintendo is already
household names in many countries, which gives them a strong advantage in this sort of
competition (Jay Conrod, 2007).
4.2.2

Bargaining Power of Suppliers

The bargaining power of Nintendo's suppliers is low, as Nintendo sources electronic

hardware components from a wide variety of manufacturers (Nicholas Heng, 2013). The
main suppliers of Nintendo from 65 Nintendo manufacturers are Fortune Power Electronic
Technology

Co

Ltd,

Tonetron

Electronic

Limited, ViewKuan

Electronic

Products

Manufacturing, Sincere State Electronics Co. Ltd and Hip Hing Cable & Plug Mfy
Ltd (Nintendo Wii Manufacturers, 2014).

Besides that, in the Nintendo Wii console, for example, the DRAM comes from Samsung
Electronics, the CPU from a joint development effort between Nintendo and IBM, the SubLSI from MegaChips, and the image processing LSI from NEC Electronics and AMD (Lytle,
2007). For some parts, like the AC adapter, Nintendo has multiple suppliers of the
component (Nicholas Heng, 2013).

Nintendo designs some of the hardware components for its consoles, but manufacturing and
assembly are often outsourced, and many components are purchased "off the shelf" from
large companies. This keeps costs higher than competitors like Sony and creates a threat of
forward integration by parts suppliers, who could potentially manufacture their own consoles.
Switching costs are also high, as Nintendo software is made to be compatible with
technologies supplied by the outside companies (Jay Conrod, 2007).

Nintendo does much of the game development for its consoles, though most of its games
are made for a fairly young audience. It also licenses a software development kit (SDK) to
outside game developers. In a manner, these firms are Nintendo's customers. Firms which
have made successful games in the past will probably have some bargaining power in this
transaction, since Nintendo is interested in keeping their services for future game
development (as will be discussed below, games are an essential complement for game
consoles). Overall, Nintendo's SDK tends to be priced lower and have better support than
similar packages offered by competitors (Jay Conrod, 2007).
4.2.3

Bargaining Power of Buyers

The bargaining power of Nintendo's buyers is also low, because Nintendo sells hardware
and software 6products through a wide range of third-party retailers, including Amazon, Best
Buy, Chapters, Costco, Future Shop, EB Games, Sears, The Source, Staples, Toys R Us,
and Wal-Mart (Nicholas Heng, 2013).Furthermore, Nintendo has a wide range of retailers
that it uses to distribute products internationally in many different countries. Since each
buyer is only one piece of Nintendo's complex downstream supply chain, each buyer has
relatively little influence over Nintendo's distribution decisions. Some larger buyers, like
Amazon and Wal-Mart for example, do have more bargaining power than smaller ones, like
The Source and EB Games (Nicholas Heng, 2013).

While many of its competitors such as Sony and Microsoft have many other businesses
serving as sources of revenue, gaming consoles and video games are the only sources of
income of Nintendo (Evileagles, 2014). If buyers chose to buy a PlayStation or Xbox over
the Wii, then Nintendos profits would dip. Likewise, buyers have options; if they are
dissatisfied with Nintendos game console or game offerings, they can buy from Sony or
Microsoft (Muncy, 2011). As overall, we can concluded that, buyers are always forcing
companies to come out with better, cheaper, faster, and longer lasting consoles than the
10

previous generation. If they dont get what they want, they find the companies that will give
them what they want.
4.2.4

Threat of Substitute Products and Services

The threat of substitute products for Nintendo is high. There are always new games and
new technologies coming out. Even though each company and rival has different games
and experiences to offer, from a consumer standpoint, they are all the same.The company
has two major competitors, Microsoft and Sony, offer close direct substitutes to Nintendos
console products. Indirect substitutes to Nintendo video games also exist on the PC and
Mac platforms. The console video games industry is currently an oligopoly, with multiple
major players all producing effective substitutes. Nintendo is positioned as a price and
innovation leader, but other companies are quick to mimic Nintendo innovations (such as
with the Xbox Kinect and PlayStation Move motion-control products) and slash prices to
encourage substitution in their favor (Nicholas Heng, 2013).

In addition to competitors' products available to them, they may choose television, movies,
PC games, board games, literature, sports, etc., in their leisure time. Thus, game consoles
have to make an effort to be wanted since they are not needed (Jay Conrod, 2007).

Although video games and game consoles are differentiated products, consumers may
conclude that each company is similar enough to fulfill the same role entertainment.
However, one factor that may lessen the threat of substitutes is switching costs. Since
Nintendos Wii console is the cheapest of the main competitors Sony and Microsoft,
switching costs work to Nintendos advantage (Muncy, 2011).

The threat of substitutes is bigger in gaming industry is due to the fact that the consoles of
the current generation are very vaguely differentiated in terms of performance and customer
experience (Evileagles, 2014). Besides, computer gaming is the greatest threat, especially
with online sites offering free games, free downloads, and the ability to play games with
other people from all over the world at any time of day or night (Nintendo Wii, n. d.).
4.2.5

Rivalry among Existing Competitors

Industry rivalry in the console video games market is high. Since there are just a few big
companies and each one is very popular, they are constantly competing with each other and
11

trying to gain a competitive advantage. If one of them has a ground- breaking discovery,
such as Nintendo did with the Wii, the others have to follow and come out with something
similar just to survive (NintendoGroupCase, n.d).Nintendo, Sony, and Microsoft continually
compete to differentiate themselves from each other. When one company introduces an
innovative technology, the others must create even more advanced products (Muncy, 2011).

In 2004, Nintendo with the two main competitors-Sony and Microsoft, are going after the
same general audience. Product diversity was fairly low; the most significant difference
between the consoles manufactured by Sony, Microsoft, and Nintendo was in the games
available for each. This led to price competition that drove prices down from the initial $200300/unit to $100-150/unit. Nintendo, as the weakest competitor, would have suffered most
loss from price competition. This situation gave a fairly strong indication that Nintendo would
have to stop competing directly with Sony and Microsoft if it was to remain profitable (Jay
Conrod, 2007).

Furthermore, the rapid advancement of smart phones, tablets and other smart devices are
becoming a very formidable competition for Nintendo, as the company by far concentrates
solely on devices and software programs dedicated to video games, including game
consoles and video games themselves (Evileagles, 2014). In addition, companies are
always looking for something better with more improvement to come out with, such as Apple
with the iPhone 4 and iPad 2. When one company introduces a new technology, the others
must create even a more advanced product in order to keep up with their competitors
(NintendoGroupCase, n.d).

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4.3

Company Strategies

4.3.1

Differentiation

In the year 2000, the gaming industry was ruled by three big players: Nintendo, Sony and
Microsoft. The level of competition between these companies was fierce and the industry
was driven by their products. The strategies of this big three and the innovations of the
industry were focused on furthering the technological advancements of their products. A
battle consistently won by Sonys Playstation console. The integration of better graphical
displays, increased hardware capacity and faster processing speeds were the sources of
higher perceived customer value and competitive advantage (Egan, 2012).

It was not until 2006 when Nintendo began to implement a differentiation strategy that the
dynamic of the industry shifted. Nintendo identified potential risks facing the industry, the
most worrying of which was the ever growing complexity and the high user involvement
required of video games, something that had no appeal to non gamers and people with busy
lifestyles. Nintendo devised a radically different strategy aimed at targeting non gamers in
order to create a potentially greater market free of demographics, experienced gamers and
gender. Nintendo thought seriously about what a game console should be and launched its
new console the Nintendo Wii in 2008 (Egan, 2012).

This presented Nintendo with an opportunity to create a console and games that appeals to
people who had been ignored by Microsoft and Sony. (Jay Conrod, 2007)The Wii was an
immediate success with casual gamers and outsold its rivals focused on traditional market of
hardcore (Egan, 2012).Although hard-core gamers were much more willing to spend
money on games; they were outnumbered by casual gamers.

Nintendo has also differentiated the Wii U through its positioning in the market as a family
game console, targeting casual gamers and consumers from a wider range of age group
(Shah, 2013).The primary advantage of this strategy is that it is one that Microsoft and Sony
cannot effectively copy. In order to appeal to the hard-core market, both companies were
competing on hardware performance and features. In order to reduce costs enough to
compete with Nintendo, they would need to abandon these goals, alienating their customers
(Jay Conrod, 2007).
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4.3.2

Innovation

In 1889, Nintendo started as a Japanese playing card manufacturer and remained in this
industry until 1974 when it created the video game market with the Magnavox Odysseys.
Since then, the company has been committed to creating new and innovative video game
consoles and games like Nintendo Entertainment System, Super Nintendo Entertainment
System, N64, Game Cube, Game Boy, Game Boy Color, Game Boy Advance, Game Boy
Advance SP, Game Boy Micro, Nintendo DS, Nintendo DS Lite, Super Mario Brothers game
series, Donkey Kong and the Zelda game series (Wetzell, 2010).

Besides that, Nintendo innovated with new controllers that included motion control, the nun
chucks, using the remote as a pointer device, a wireless, motion-control steering wheel, a
wireless light gun, and a balance board. They also released innovative games like Brain Age,
Wii Play, Wii Sports, Wii Fit, and Wii Music etc.

On the other hand, Nintendo operates a differentiation strategy in an industry that rewards
innovation and eliminates firms unable to keep up. Before the Wii, Nintendo was operating a
focused differentiation strategy with a heavy emphasis on its target market. The introduction
of the Wii opened Nintendo to the mass consumer market, allowing non-traditional gamers
to find value in the product. However, with competitors catching onto Nintendos newfound
market, new products such as the 3DS and Wii U have been created to sustain innovational
advantage (Nicholas Heng, 2013).

In order to compete with its competitors, Nintendo open innovation WiiShop Channel and
WiiWare. The WiiShop Channel is the online shop Nintendo created to download official
software (virtual console games and WiiWare games) from the internet directly to players
Wii. (Nintendo Wii, 2014) While, WiiWare is a service that allows Wii users to download
games and applications specifically designed and developed for the Wii video game console
made by Nintendo (Nintendo WiiWare, 2014).
4.3.3

Cost Leadership

Nintendo Wii Us strategy is based on focused cost leadership and differentiation through
innovate the gamepad controller system, which is very distinct from those of the other game
systems. With the pricing for its standard model at US$299, Nintendo Wii U may be
14

considered a cost leader in the market as it is priced significantly lower than the other two
consoles.

Wii eliminated the use of expensive DVD player components, thus reducing the price. It
aimed to increase its revenue by allowing the customer to buy peripherals and accessories
to enhance their playing experience. It reduced its processor quality and graphics which
were no longer important to its buyers who were casual gamers. This allowed it to reduce
prices and embrace cost leadership. The motion sense controller and character
customization allowed it to differentiate itself from Sony and Microsoft (Pethkar, 2011).

Nintendo created an uncontested market space by creating a product that was truly
innovative, ensuring that no other game console could replicate its experience. Nintendo
also captured new demand by creating the system for everyone. They successfully
targeted women and older demographics that were not actively in the gaming market, and
they priced the Wii at almost half the price of the other two systems, making it more
affordable to a wider audience. Nintendo may have succeeded in pursuing differentiation
and low cost simultaneously by developing the motion sensor controller and delivering it at a
comparatively low price (Nintendo Wii, n. d.).

15

5.0 Effective use of Web 2.0 Technologies in Nintendo Company

Web 2.0 technologies are a type of open platform technology that can provides user to
share information through online, communication and interaction. Therefore, Nintendo use
Web 2.0 technologies as a social media to advertise and promote their product. Besides that,
Nintendo using different type of Web 2.0 technologies such as twitter, facebook, Youtube
and other to improve their company performance.
5.1

Twitter

Nintendo used twitter to catch their followers' attention by posting new product in the website
and the latest information of the company. Besides that, Nintendo can through twitter let
their customer know the detail of their new product and other product as well. For example,
Nintendo used twitter vine to show their followers or fans a video about their new product
and game to attract their interest.

Besides that, Nintendo also use twitter to inform their followers about the detail for coming
promotion or events about the new games. Other than that, Nintendo also can through the
twitter to decide the event location base on their customer desired location. Those players
can attend the promotion or events to learn and know more details information for the new
games as well as other game product. Additionally, Nintendo Company also gives some free
gift to who attend the event or promotion that it is more effective to encourage people to
attend their event.

In addition, Nintendo using twitter to highlight their brand such as Nintendo post a video
about the new product and attach brand name into the video to promote their new product
towards all twitter user. At the same time, Nintendo Company also able to promote their
product across the country becomes an international business.
Due to twitter is a social networking and micro blogging hence it can transmit to worldwide
and can share by everyone that what they feel interesting. Therefore, Nintendo through
twitter can let their fans or followers help them to do the advertising. This is because it is
much more effective than doing by them (Admin, 2013). On another side, Nintendo through
twitter can save a larger cost on their advertisement.

16

Nintendo uses twitter also can attract new followers or fans. This is due to when Nintendo
updated their Tweet, not only it will appear on Nintendo followers feeds, but also will appear
in other users feeds. Therefore, it will attract those people who are interested about the
latest games or merchandise. Nintendo can through twitter to held a competition and
provide prizes to the winner in order to attract more followers or players to experience the
new games.

Twitter also can let those people who are experienced in the new product or other game
product to leave a comment in the twitter as a suggestion or guideline for other players.
Besides that, the player also can write down their feeling after they experienced the new
game product or other product in the twitter as a reference for other players. By this way,
players have more information about the Nintendo games product. Twitter also able to let all
the players exchange their opinion or experience about a game and it will increase the
relationship and interaction between players and players.

Furthermore, the benefits can be gained by the Nintendo using twitter is use to attract
potential employees. Nintendo can consider opening up its business by taking their
employees inside the office with a twitter vine video. This not only can help Nintendo has the
ability to humanize themselves on social media, but also a wonderful recruitment strategy
because it can make those potential employees will see happy employees in the company
and they will be glad to be part of the team (Admin, 2013).
Another benefit can be gained by Nintendo using twitter is the customers feedback.
Nintendo can receive the feedback or suggestion from twitter, in order to improve its
products quality such as bug. Therefore, Nintendo Company can solve the problem
efficiency. Moreover, Nintendo receive these feedback or suggestions can more
effectiveness and efficiency to innovate new games in the market what the customers
expected.

17

5.2

Facebook

Facebook is an online social networking. It enables users to communicate and interact with
each other by having conversation, posting status, upload photos and video and other
activities. Since Facebook has enormous amount of users, it becomes a social media
platform for Nintendo to display or advertise their products.

Nintendo has its official page on Facebook. It has around 3.2million of likes, which means
potentially more than 3.2million of users had browse through their page. Their product or
Company has been exposed to more than 3.2 million users. Besides, Nintendo can setup a
page in Facebook is easy andfree. The page shows some description abouttheir Company
and has a direct link to the official website.

Apart from that, Nintendo always update their latest games trailer on Facebook in order the
let the potential customers have a look at their latest games. Furthermore, they also
organize some contest, where Facebook users can participate the contest go grab the
prizes. For example, Nintendo just organized an event, Super Smash Bros for Nintendo 3DS
National Open Tournament. They also provide another link to at the page the let the users
can watch the live broadcast of the competition. This will get the attention from the users
and have a chance to expose their Companys name to other users.Nintendo advertises
their products like Wii U, Wii, Nintendo 3DS XL, Nintendo 3DS, Nintendo DSi, Nintendo DSi
XL, Nintendo DS Lite. They will show some the pictures and describe some features about
these products.

The latest product is 0NES-themed Nintendo 3DS XL system. After they uploaded the photo
it has around 12k like and 500 comments about the new system they newly distributed.
Through the comments the users left, Nintendo can analyse the feedback and the overall
perception of users towards this new product. This will help them to have better
understanding about the users taste and preference or the dissatisfaction of the users
towards Nintendos product. It also gives them opportunity to improve the products and
services.

Besides that, the Facebook page also posts the life events of the Company from year 1889
to year 2012. This gives the users to have more understanding about Nintendos Company

18

history. The users might see the contribution of the Company and the great effort they paid
off which leaves a good image for them. This will help Nintendo to attract more users
because of the Companys well known and brand name.

Recently, Nintendo organized an event NintendoHalloween incorporate for the Halloween

festival. Nintendo has come out with some new games at nintendoplay.com. Nintendo had
displayed some spooky pictures on its Facebook page to introduce this event to the
Facebook users. The response is great because there seems a lot of users have left
comments, complimenting about the NintendoHalloween. This shows a big leap for
Nintendo because they successfully push up this event and the number of participants is
increasing.

Through Facebook this huge social media platform Nintendo can always advertises their
product to the users and gives them an opportunity to gain more customers and increase
the sales of the company. Facebook as a social networking has given lots of benefits to
Nintendo.

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6.0 Conclusion
In a nutshell, the success of Nintendo Company if mainly based on help of information
system and information technology. In gaming industry, information technology and
information system is virtually important. The latest information technology and information
system will lead the whole gaming industry.

In order to, effectively implement information system and information technology of the
Company. Nintendo has come out with its own Nintendo network which consists of Nintendo
e-shop, club Nintendo and Miiverse. The network mentioned allows users to interact with
other users and forms a huge network. Nintendo also forms a system name Nintendo
Entertainment System (NES). This system helps Nintendo to compete with its competitors
come out with Nintendo becomes the no.1 console gaming in Japan.

To improve competitive advantage of the Company, the R&D department keeps on innovate
new products to help Nintendo create an uncontested market space. Keep the competitor to
disguise or replicate their product. They also build strong brand name so that the consumer
would chose to purchase items from them than any other brands.

Nintendo implemented a differentiation strategy and it successfully attracts the non-gamers

which were not realized by its competitors.

This strategy increases the sales of the

company. The company also advertises their product on the social media networking
through the webpage of its company and other social media platform like twitter and
Facebook.

The social networking helps Nintendo to attract more fans and potential

customers.

To become the leader in the gaming industry, Nintendo has to keep on update and improve
the information system and information technology because it helps them to gain more
competitive advantage and other benefits.

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