Presentation on theme: "Nintendo The Launch of Game Boy Color"— Presentation transcript:
1Nintendo The Launch of Game Boy Color Anna MontananaRosemary NocitoDeena VezoMaggie Wu
2Nintendo History1889: Nintendo was founded by Fusajiro Yamauchi as a manufacturer of 'Hanafuda‘ - Japanese playing cards.The name 'Nintendo' actually means 'leave luck to heaven’1970: first field of video entertainment after creating the Beam Gun with opto-electronics1980: launched Game & Watch which was an LCD based platform that had 59 games1983: introduced first home console, Nintendo Entertainment System (NES)1989: released Game Boy, a smaller portable version of Game & Watch that had great potential in terms of graphics and interchangeable games
3Nintendo HistorySince the release of Game Boy, Nintendo has also introduced, Super Nintendo, Nintendo 64, and Game Boy Advance to the market1997: it was estimated that more than 40% of U.S. households owned a Nintendo game systemNintendo is the worldwide leader in home gaming systems.
4Game Boy History1989: Game Boy was initially released coupled with the addictive puzzle game Tetris for $1691993: Original Game Boy was offered in various colors including, blue, yellow, and red1993: Game Boy Pocket introduced to the market1994: Super Game Boy was launched enabling gamers to play Game Boy games on TV through the Super Nintendo system1996: Original Game Boy was released in a new and improved slimmer version1997: Game Boy Pockets released in six new colorsJuly 1998: expected launch of Game Boy camera and printer additions that will turn Game Boy into a digital camera with printable pictures and stickersNovember : Anticipated launch of Game Boy color in North America and Europe
7Strengths Game Boy is the most successful gaming platform in history sold more than 70 million units during its almost 10-year lifeNintendo was the leader in the worldwide US$15 billion retail video game industry.Nintendo manufactured and marketed hardware and software for its game systemsNintendo 64 is named Time Magazine’s “Machine of the Year” for 1996.Control of the games that ran on its game machines, keeping its third-party software providers under tight controlImprovements:In 1994, an add-on for the Super Nintendo Entertainment System was launched, enabling gamers to play Game Boy games on that system.In 1996, Game Boy was relaunched in a slimmer housing with further improvements in screen clarity.In 1997, Game Boy Pocket was introduced in six new colors..The new Game Boy color would display sharp and vivid color graphics. Game Boy Color’s screen was also not backlit, which meant two AA batteries would last about 12 hours.Nintendo Canada would have access to a broad selection of ads from the US that could appeal to all the target segments being considered for their launch plan.
9WeaknessesBoth Game Boy hardware and software sales had declined steadily from 1992 to 1996 on a worldwide basis.By 1998, support of third-party developers for Game Boy was waning. Many viewed it as a “spent force” in the market and were reluctant to invest the US$200,000 to US$300,000 to develop a new Game Boy cartridge, when there were more attractive opportunities in the much larger console market.The marketing communications budget for Nintendo in Canada was only a small fraction of the Nintendo budget in the US. Also, Nintendo Canada selected its ads from the pool developed by Nintendo in the US.When the original Game Boy was launched in 1989, it had been priced slightly higher in Canada than the US, attributing to Game Boy’s proportionately greater sales in the US.
11OpportunitiesOn November 23, 1998, a color version of Nintendo’s Game Boy would be released simultaneously in North America and Europe, one of the most important launches in Nintendo’s history.Game Boy Camera and Game Boy Printer were scheduled to be released in July 1998.Retailers had “open to buy” dollars that could be shifted around during the year to support the “hot” products.Sega and other competitors lacked new exciting software for their handheld hardware. Handheld users seemed to want exciting, current software.Six new games, specifically developed to take advantage of the 56-color palette on Game Boy Color, were expected to be available at the launch date.
13ThreatsIn 1998 Nintendo began to lose momentum as some of the third-party developers began focusing more of their development effort on Sony Playstation, which was viewed as an easier platform on which to develop games, and the Sony business model was viewed as being a more profitable one.Sega had been much more aggressive in promoting its console business in Canada than in the US.Third-party developers were spending fewer marketing dollars in Canada due to the relatively small size of the Canadian market. Canada represented only about 3 percent of the global Game Boy software market, whereas the US accounted for between 35 percent to 40 percent.As sales velocity slowed in the mid to late 1990s, retailers shifted more of their shelf space to Nintendo consoles and competing platforms and reduced their advertising and promotional support for Game Boy.In the late 1990s, a number of specialty stores had delisted Game Boy because they felt that they were not achieving competitive returns on their sales of Game Boy hardware and software.Competition:Atari Lynx, the world’s first color handheld video game system.TurboExpressSega’s Game GearSega’s Nomad
14Issue IdentificationIssue #1: Choosing the right target market and the right positioningIssue #2: Choosing the right market approachIssue #3: How to price Game BoyColor in CanadaIssue #4: Product
15Issue #1: Target Market and Positioning Alternative #1: Focus on teens who were more likely to already own a Game BoyAlternative #2: Focus on new kid/tween users
16Issue #2: Marketing approach Alternative #1: In-store interactive displayAlternative #2: Mall tourAlternative #3: Cross Canada tour
17Alternative #2: Price Game Boy Color at a lower cost of Cdn= $100 Issue #3: PricingAlternative #1: Price Game Boy Color according to the mid-1998 exchange rate conversion of U.S. priceU.S.= $ Cdn =$120Alternative #2: Price Game Boy Color at a lower cost of Cdn= $100
18Alternative #2: Stop offering the black and white version Game Boy Issue #4: ProductAlternative #1: Continue to offer the Black and White version of the productAlternative #2: Stop offering the black and white version Game BoyAlternative #3: Bundle a game cartridge with the Game Boy ColorAlternative #4: Do not bundle a game cartridge with the Game Boy Color
19Group DiscussionsIssue #1: Choosing the right target market and the right positioningIssue #2: Choosing the right market approachIssue #3: How to price Game BoyColor in CanadaIssue #4: Product
20Issue #1. TM and Positioning Alternative #1:Focus on teens who were more likely to already own a Game BoyPROs:If successful in getting teens to adopt, this might spur sales among kids and particularly tweens, who often aspired to use the same products as teensTeens tended to purchase machines with their own money, making their purchases all year round, not just at holiday timesIf teens already owned a Game Boy we know that they are interested in this type of handheld device, and we know how to target them because we have reached them in the pastCONs:If Nintendo Canada targeted teens that had used Game Boy in the past, they might view the Game Boy as a product that was great when they were younger but not sophisticated enough to meet their current gaming needsIf Nintendo was unsuccessful in getting teens to adopt, then perhaps kids and tweens would avoid it as wellMany in this segment already had a black and white Game Boy and a library of five or six games and viewed the product as “old technology”Many teens appeared to have moved past the handheld machines to consoles, which offered greater speed and game complexityOnly represent 6.7% of the total population of Canada
21Issue #1: TM and Positioning Alternative #2: Focus on new kid/tween usersPROs:If Nintendo targeted kids and tweens and was able to convince kids/tween nonusers of Game Boy that Game Boy Color was a “cool” product, it could become a “gotta have” for the younger setThis younger audience was less likely to already own a Game Boy productKid/Tween users represent 19.9% of the total population of CanadaCONs:The difference between being cool or not cool with the younger set was a very fine lineIf focused on the kids and tweens, it might turn off the teens because Game Boy Color was “a kid’s toy”Game Boys were typically purchased for kids and tweens by their parents as gifts, resulting in peak sales occurring in November and December for holiday gift giving and in June as a graduation or “great report card” present
22Issue #2: Marketing approach Alternatives #1: low-cost interactive displayPros:generate brand/product awareness when teens/kids/tweens visit the storesEstimated in store interactive displays would be used approximately 20 % of store hours for an average of 3 min/use.No sales staff required to monitoring the displays ( easy to operate)1000 potential outlets and Nintendo could achieve an 80% placement rateLow CostCons:No one is there to explain the new product or the benefits of the product if kids/tweens/teens have questionsMost sales clerks knew little about Game Boy Color hardware or softwareCompetitors have similar displays Direct Competition
23Issue #2: Marketing approach Alternative #2: Mall ToursPros:Nintendo reprehensive is highly knowledgeable gamers, and would show game insights and tricks that kiosk visitor could use to improve their scores on popular gamesIncentives encourage trial among teens/tweens/kids Mall tour visitors can enter contests for Nintendo products and would receive a temporary Nintendo tattoo when they left6-8 minutes on the product ( more than store displays which lasts only 3 minutes)Teens/kids/tweens spend a lot of time in the mallCons:Expensive: $10,000 per Mall visit, means only 25 mall tours per yearMall selection problemsstaff is limited/place is limited
24Issue #2: Marketing approach Alternative #3: Cross-Canada tourPros:Most likely to generate buzz/PRAutomatically high awareness due to scale of the eventsMore freedom to promote in a bold mannerBigger kiosks, more staff to promote the new productHigh reach due to the size of audiences attending each event ---80%Cons:costly $150,000 per year for major regional or national events: CNE, Klondike Days, and the Calgary StampedeEvents only take place in summer months
25Issue #3: PricingAlternative 1: Price Game Boy Color according to the mid-1998 exchange rate conversion of U.S. pricePros:Remain consistent with pricing in the USNintendo Canada wouldn’t experience proportionately lower sales than the US similar to when the original version had been launched in 1989Prevent black market trafficking and sales from the US to Canada because of the cheaper priceproduce a retail margin of 20% on Game Boy consolesCons:Hardware price would be too high to drive-high volume sales in Canadian marketHigher cost make it unaffordable for kids/tweens marketCould lose business to competitors because of high cost of gaming system
26Issue #3: PricingAlternative 2: Price Game Boy Color at a lower cost of Cdn= $98Pros:Lower price makes the gaming system more attractive and affordable to buy, especially for kids/tween market segmentRetailers could make more profitable returns per square meterLowest sale price of Game Boy to dateCons:Could lead to black market exporting of product to other marketsNintendo Canada would only receive a gross margin of 5% instead of the past 6%With a lower margin received from each Game Boy sold, retailers might chose to spend their money on carrying and aggressively marketing other game systems
27Issue #4: ProductAlternative #1: continue to offer the black and white version of the productPros:Low price Cdn $49Backward compatibility of game boy color games mean that consumers could buy the black and white version and then trade up at a later date with out making their games obsoletes.Cons:With the low price, the black and white version would not generate any profitsCannibalizing sales of Game Boy color
28Issue #4: ProductAlternative #2: do not continue to offer the black and white version of the productPros:Avoid losing money producing the black an white versionAvoid cannibalizing sales of Game Boy colorCons:Excludes consumers looking for a more affordable option
29Issue #4: ProductAlternative #3: Nintendo Canada should bundle a game cartridge with Game Boy color at LaunchPros:Incentive to purchaseTeens/Tweens/Kids can see the difference between color and black and white games…and if they think color is superior, they would keep purchasing the color games instead of just keep using their old/already owned black and white gamesHistory could repeat itself with Game Boy having the same success it experienced when packaging Tetris with the original Game BoyIncreased perceived value of game systemCons:A high price will be charge??Lose revenue from independent game sales
30Issue #4: ProductAlternative #4: Nintendo Canada should not bundle a game cartridge with Game Boy color at launchPros:Avoid higher retail pricesHigher profits from the individual game salesCons:Less incentive to buyConsumers may expect Game Boy to come with a game cartridge because that is what they have experienced in the past
31RecommendationsFocus on both teens already own a Game Boy and new kid/tween usersThe best marketing approach is a cross-Canada tour because we felt this is the best way to generate buzz and increase brand awareness and same time it is the most informative way to educate users on the new product. We also felt the other two approaches can be carried along after the launch of Game Boy ColorPR:we also recommended what has been stated in the caseSales Reps visit leading magazine/web publications three month before product launch and let the writers to play the game for 5-6 hoursWe decided to price Game Boy Color at Cdn $120 to best satisfy factors such as profitability, consumer price sensibility and sufficient motivation for retailers to carry the product.Lastly, we have decided that Nintendo should stop offering the black and white version Game Boy and bundle a game cartridge with Game Boy Color. This will not only encourage users to try new Game Boy Color but also make them adopt to the new product faster.
33Implementations short-term: long-term: focus advertisements and literature on the $120 price, which includes a game cartridge, and towards both teen and new kid/tween user marketsbegin research and creation of the cross-canada tourgather information about consumer response and satisifactionadvertise aggressively in the beginning to promote the new Game Boy Color to both target markets with separate campaigns focused at each market individuallylong-term:execute the cross-canada promotions toursign a young celebrity as a spokesperson for Game Boy Color to appeal to the young target markets