I’ve often thought that good memories are easier to recollect than create. This probably highlights the cynic in me, but it also emphasizes the power of nostalgia.
Herein lies the beautiful strategy of Nintendo:
What does a company do when its best products are in the past?
Whether it is by dumb luck or design, Nintendo have managed to recapture a market from the 80’s and 90’s with their latest Nintendo NES Classic and Pokémon Go offerings.
This is a market they won long ago.
A market that has wanted more of the same for decades.
A market that insisted Nintendo don’t reinvent the wheel, just jazz it up, make it look modern, and make it work on my new smartphone or LED TV.
To understand how the strategy worked, we need to use the 5Cs in marketing to understand who Nintendo really are in today’s economy. The 5Cs are used to figure out a company’s market situation, so let’s have a look at Nintendo’s 5Cs relative to Pokémon and NES mini.
The main age bracket for people playing video games nowadays are people who used to own consoles. That means customers have probably grown up with at least one Nintendo product in their teens such as myself. People in my age bracket have probably lost a bit of loyalty to Nintendo, given the plethora of gaming options available on smartphones and PC. Nonetheless, there’s always a craving for ‘the classics’. Games that we fondly remember but don’t play because they just aren’t practical anymore.
Nintendo does one thing really well – ride on the coattails of its previous hits. We can say this is just milking the brand, and it is obvious if you simply google Nintendo – most results include a picture of Mario – a character created over 20 years ago. It amazes me that after all of these years characters like Mario and Luigi are still known in a world that has new characters added to the scene all the time. Nintendo’s opportunity lies in recreating these characters so well that it creates a new baseline for itself, something for the next generation of gamers to remember in a decade or two. For Nintendo, now’s their time to make hay while the sun shines.
“From 2009 to 2012, the interactive entertainment software industry grew at an annual rate of nearly 10 percent. Over the same period, the entire U.S. economy only grew by 2.4 percent“. Not bad numbers considering the increasing ease of digital media transfer capabilities and piracy related incidents over recent years. While gamers might seem like an odd bunch, they are still willing to part with their
parents hard earned money hard earned money for some button mashing fun.
Nintendo closely control all of the companies they work with, they basically own their content providers in an attempt to keep all revenue to themselves. They control the hardware and software and it has been like that since the beginning, when they installed security chips and rules to limit the number of games each third party developer could release in a year. Nintendo games are noticeably more refined when compared with many PC and other console releases.
Nintendo no longer competes against only console manufacturers. It competes against anything entertainment related:
- Smartphone games
- Sony console games
- Xbox console games
- PC games
- Instagram…………………..and on the list goes………….
The amount of options available today for young and old to keep themselves entertained is endless, so companies need to grab our attention any way they can.
What does it all add up to?
Nintendo have seized a great opportunity by combining customers in the right age bracket, new tech, and a product that has basically been marketing itself for decades. It is no wonder Nintendo are enjoying a rebirth that could be the beginning of a new gaming foundation through Pokémon go, while cashing in on the 30-something year old who just wants to re-live the classics for another night.
How long the financial sugar hit will last is yet to be seen, but I’d give it 6 months before things stabilize or another player in the market does the same thing. The uptake of games is kind of like big screen TV’s, once you’ve invested you normally wait a while for the next revolution to come out, rather than upgrading every few months.
For me, the latest Nintendo releases are like having a beer with a long lost best friend after 15 years of life getting in the way. It is a moment that is as fun as it is fleeting.
I wish it could last forever, but that’s not how nostalgia works.
By: Peter Agrotis – 216061548 (pagrotis)
Iacobucci, D 2014, Marketing Management (MM4), Student Edition, South Western, Cengage Learning, Mason USA.
Neilson 2015, No Stranger to the (Video) Game: Most Eighth Gen Gamers Have Previously Owned Consoles, Pike, Retrieved 20th July 2016, http://www.nielsen.com/us/en/insights/news/2015/no-stranger-to-the-video-game-most-eighth-generation-gamers-have-previously-owned-consoles.html
The Entertainment Software Association 2014, Games: Improving The Economy, The Entertainment Software Association, Retrieved 20th of July 2016. http://www.theesa.com/wp-content/uploads/2014/11/Games_Economy-11-4-14.pdf