Nintendo Switch Analysis

Company Background

Nintendo was founded in Kyoto, Japan in 1889 by Fusajiro Yamauchi, originally the company produced homemade hanafuda, a form of playing cards that was popular in Japan at the time. For a bit over 60 years, the company existed primarily in the playing card space making incremental improvements such as creating plastic cards and striking a licensing deal with Disney to use their characters. After going public in 1962, the company went into various businesses such as a taxi company, a short stay hotel chain, a instant rice company, vacuum cleaners, and toy making. The company struggled over the next decade as none of the businesses besides the toy subsidiary actually had any economic success but in 1970, a factory Gunpei Yokoi created an extending arm to initially help him perform his duties which was ultimately made into Nintendo’s first electronic toy. At the time, Nintendo was the only company producing electronic toys and this allowed them to achieve tremendous profit margins. In 1975, Nintendo developed their first video game, the EVR Race and followed that up shortly with the release of Donkey Kong. For the next decade, the company licensed out their technology and characters to other video game producing companies, however, in 1985, the company released their own video game console- the Nintendo Entertainment System. Combined with the development of Super Mario Bros, the company’s growth skyrocketed. From there, the company’s innovation and utilization of core characters such as Mario, Luigi, and Donkey Kong, led to beloved systems like the Nintendo 64, the Gameboy, the Game Cube, the Wii, and most recently, the Nintendo Switch.

Nintendo Switch

The Nintendo Switch is the company’s first foray into a hybrid video game console as one can play it at home or as a mobile gaming device. The main unit can dock into a station that is connected to a television, while it can also be removed and used as a tablet to play on. The console is priced at $299 dollars and was released in March of 2017. The release of the product was tied in heavily to the ability to play with legacy games such as Mario Kart and The Legend of Zelda and sold 22.86 million units in its first year. This figure is more than the entire lifetime sales of the GameCube, and it is the fastest selling console of all time in the United States.

Nintendo Switch Competitors

The Nintendo Switch has two main traditional competitors, Microsoft’s Xbox One and Sony’s Playstation 4. Both the Xbox One and the PlayStation 4 costs $199.99 dollars and are strictly a plug in console that lacks the mobile capabilities of the Nintendo Switch. They are generally considered to be better systems for the video game purists as they boast better graphics and performance. There are in fact some critics who say that the Nintendo Switch is not a true rival to these two as it is far more likely to be a complementary system to a gamer, rather, they view the Switch as competing against tablets like Apple’s iPad. Unlike the latter, the Switch gives a user the ability to play a full litany of games, not just mobile specific ones like Angry Birds. Additionally, the initial fee of a Switch is far less expensive than an iPad, potentially making up for the fact that games on the system are more costly. The two companies are actually competing over suppliers as the Nintendo Switch uses many of the same parts as an iPad. Although the iPad appeals to a broader user demographic, the Nintendo Switch is far better suited for the hard core gamer who is looking to take their experience on the go.

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