Week 8 Nintendo Case #22 Posted on: Thursday, December 5, XXXXXXXXXX:00:00 AM EST Teams, I know many of you have already begun preparing the final group assignment, which is why I am posting this...

Porter’s 5 Forces – in Nintendo’s Case
Taking reference from “From Five Competitive Forces to Five Collaborative Forces”, (Dulčić, Ž., Gnjidić, V., & Alfirević, N., 2012) industry of video games is one the highly profitable and commercial units in the entertainment. It competes with music and movie industries. It is considered as one chief manifestation of recreation and entertainment. The tremendous growth in the video games is also a result of increase dependence on mobile games and addictive nature of the games. As technologies advances every day there are many upgradation in games, evolution in their console and this consistent evolution plays an integral roles in keeping the audiences engages and entertained.
Internal Rivalry
Since there are limited number of competitors in the market and this industry is growing consistently, there is intense competition between the players that are active in this industry. Primarily, Nintendo, Microsoft and Sony are key players and compete intensely such that one can outperform the other. With reference to “Gartner Says Worldwide Video Game Market to Total $93 Billion in 2013”, (Meulen. R. & Rivera. J., 2013) there is enormous pressure to intensify accessories, upgrade content of the games, and launch new products that can help them gaining more market share from the competitors.
Threat of Entry
On deep diving in this force, there is emergence of new entrance is low in this industry. With reference to “Video game ratings made by anonymous panel”, (Sieberg, D., 2011) this is due to several factors like those that industry is high on financial as well as intellectual capital in order to make a mark here. Furthermore, there are big players like Nintendo, Microsoft and Sony that have dominated the market since many years having established a robust brand value that others might feel apprehensive to compete against giants. Moreover, there is huge requirement of capital in this business due to extreme fixed costs and recurring investments in development and research for advance technologies, customer acquisition and marketing. Furthermore, new players will endure many challenges like gaining access to distribution channels and placing the product at different retail stores. Therefore, we can conclude that there is low level of threat of new entrant since barriers are high
Threat of Substitutes and Compliments
Essentially, there are two critical aspects in this business, game consoles and quality of the games. Games can be produced internally by setting up an in-house center of excellence team that can develop games or this could be out-sourced to any third party developers. Good contents in games can results in gaining more traction from audience thereby leading to sales advancements. Essentially, this is a crucial motive that Nintendo acquire primary development studios such that it provides high quality and exclusive content. Other elements involves steering, controllers, and headset and extend to involve TV setup. Numerous substitutes are available in the market that is why the threat level is considered from medium to high. Furthermore, this is segment that falls in entertainment industry and other substitutes like music, movies, outdoor family activates can also compete since all of them demand the timing of the customer. Nevertheless, they don’t pose direct competition as their nature of operations are entirely different
Bargaining Power of Supplier
This force is considered to range from low to medium...