Today the new Pokemon film Detective Pikachu is released in Japan. The film, which is part of the famous Nintendo franchise Pokemon, will fundamentally change the nature of video game movies. This kind of disruption is nothing new for Nintendo. A few days ago the Game Boy celebrated his birthday and with the current developments of the Nintendo Switch in the field of Virtual Reality it doesn’t seem as if the game giant Nintendo will lose speed in the next few years.
With their consoles, Nintendo made interaction with video games as we know them today possible in the first place. Through the development of personal game consoles, millions of people were able to bypass the arcade and experience the adventures of video game heroes within their own four walls. This not only overcame barriers, but drastically expanded the video game market. Other success stories, such as the Game Boy or Wii, follow these first steps and have inspired the competition, such as Sony or Microsoft, to grow beyond themselves.
Nintendo has a reputation for being a forward-thinking company. Since their inception in 1889, they have taken some risks and reinvented markets. 130 years after its founding, it is therefore a good time to take a look at the Japanese company’s culture of innovation.
On 23 September 1889, the company founded by Fusajiro Yamauchi as a playing card company was born. Based in Kyoto, Nintendo manufactured handmade playing cards that were becoming increasingly popular.
But with the changing market, Nintendo also realized that it could not always be successful with game cards. With the advent of the first computer systems for the general public, Nintendo also decided in 1974 to take a completely new path and began the sale of its first video game console, the Magnavox Odyssey. After that, they started producing their own hardware, which only a few years later was absorbed in the first Game Boy.
From that moment, despite some financial setbacks, Nintendo was always at the forefront of the video games market, inspiring new audiences and markets. Their motto of addressing non-consumers and the constant democratization of the video game market enabled them to create ever new growth markets. With the Wii Fit, they successfully reached the target group of young women who were not interested in classic video games. Nintendo follows a special approach in all its developments, as they explained in a interview:
“In many cases, we begin by assigning a small group to a project; not necessarily senior staff, but developers, to try and come up with ideas. Those lead to the end product. Super Mario Odyssey is a good example to explain this: we actually had several small groups and as a result we had many different ideas, which we then put together to make a single product. Naturally during the course of early development, we find the right mission for each project. I believe every game has a different mission. With [Nintendo Switch launch game] 1-2 Switch, for example, the mission was to make a party game where players would not have to look at the screen – where people would face each other.” – Shinya Takahashi, General Manager of the Entertainment Planning & Development Division Nintendo
The ability to rethink and identify future markets at an early stage enabled the company to be the disruptor time and again. The following can be seen from its 130-year history, as Harvard Business Review beautifully summarized:
- Simplicity can be an effective means of disruption. Throughout the history of its consoles, Nintendo has reduced performance dimensions to make hardware more flexible and affordable. This easier handling, minimized to the essential needs of the target group, has quickly made them a customer favorite.
- It needs a vision of the future. From card manufacturer to video game giant is a long way off. Those responsible at Nintendo recognized the opportunities of digitization early on and followed this trend for years to come. From gesture control to virtual reality in the current switch, they are proving to be the market’s forerunners.
- Market development is an opportunity and not a threat. Competition against non-consumption can become a self-renewing cycle. The company had to constantly rethink how they could inspire customers who had never been reached before. Nintendo made it its mission to constantly reinvent itself and subject its own business models to disruption. So the company never stops and is itself the strongest competitor.
Nintendo is a great example of a flexible and dynamic corporate culture that has found new ways to succeed despite market changes. However, the company’s history is also an example of the fact that one must not be intimidated by failures, but must continue to make progress with regard to one’s own innovation goals and the company’s mission.