Reflection Essay on Nintendo Market Analysis

Who is the market?
Nintendo is a gaming company. The company’s gaming is almost entirely concentrated on electronic games and interactive entertainment. Its main products are video games, handheld games and console games (Nintendo Corporate)
Who is the target market?

The target market of gaming companies are people in the age group of 5-34 years. However, the growth in this industry is occurring in the demographic of 18-34 years (Rye)
Who is the served market?
The primary target market which Nintendo serves is to the 5-17 year old gamers. However, choice for buying such games lie with their parents, Nintendo also has an indirect target in them (Rye)
What is the size of the target market?
Currently the Video game market is $19 billion dollars, with about $8.4 billion dollar market in US, and $9.8 billion dollar market in the Asia Pacific region (Kolodny 2006)
How fast is the market growing (%/yr)?
PricewaterhouseCoopers predicts that by 2010 the video game market should grow to $46.5 billion. This means an average compount annual growth rate of 11.4%. The US market is likely to grow at the rate of 8.8%, to hit $13 billion in 2010, and the Asia Pacific market is likely to grow at the rate of 12.3% to hit $17.4 billion by 2010 (Kolodny 2006)
How far the market is penetrated (%)?
Nintendo of America has achieved remarkable market penetration. It’s estimated that 40 percent of American households own a Nintendo game system (Brown 2007). Worldwide Nintendo’s market share is 21.2% (Shim 2005)
What are customers` current needs?
Currently the video game customers need games which are aimed at adults rather than kids. The game market for kids, has reached its saturation, and the need of the hour is building games aimed for older people (Borow 2003)
What are customers` future needs?
In future, with the wider spread in online and wireless games, customers need to have video games which will be less expensive and portable. They would also need to have these systems easily run in a network, which is the prime reason for the rage of PC games (Jackson)
What are current distribution channels?
Nintendo’s products can be either brought off the shelf from various game shops; currently there are many games which could be played online too. In addition, Nintendo also plans to go in for digital distribution with the Wii and Virtual console distribution channels (Nintendo Corporate)
How price-sensitive are customers?
Nintendo was earlier known for price fixing, when the customers were more interested in the product than the price. The advents of wireless and online games have reversed the trend, where the customer goes for buying the least expensive of the products, if the quality is good (Molnar 2007)
What is the current pricing strategy?
The current pricing strategy of Nintendo is by continuing their investment with the GameCube. This has allowed them to keep hardware development and manufacturing costs down. This has made theme only current generation console that has profited from the hardware at the time of launch (Molnar 2007)
What are some market/customer trends?
Despite the great figures of growth etc, the market share for the console markets will be decrease with respect to the entire gaming market. This is due to the shifting of customer interests from console games to online and wireless games, which are seeing an explosive growth rate (Kolodny 2006).
References

Borow J, “Why Nintendo won’t grow up”, January 2003,
http://www.wired.com/wired/archive/11.01/nintendo.html
Brown R, “Achieving a fast Return on investment”, 2007
http://www.hytrol.com/casestudy.cfm?id=35
Jackson, “Where you should compete”,
http://www.lek.com/UserFiles/File/Jackson_ch01.pdf
Kolodny L, “Global Video game market set to explode”, 23rd June 2006,
http://www.businessweek.com/innovate/content/jun2006/id20060623_163211.htm
Molnar J, “The Wii Played an impressive opening”, 22nd March 2007,
http://blogs.spouting-tech.com/thepensivegamer/2007/03/the_nintendo_wi.html
“Nintendo Corporate”, http://www.nintendo.com/corp/
Rye C, “Market Research: Nintendo DS – Marketing strategy”
http://court.ryefamily.net/files/Nintendo-DS-Marketing.doc
Shim R, “Next-gen Consoles take front stage”, 12th May 2005,
            http://www.zdnetindia.com/news/features/stories/121828.html