Table of Contents
Nintendo, one of the most popular gaming device manufacturers that have given the world games like Super Mario, Donkey Kong, Legend Of Zelda, and Pokemon, has a history of more than 100 years. Starting from handmade playing cards, Nintendo once operated various types of toy manufacturing, rice packaging, and the love hotel business.
Still, since the 1980s, it has established itself as a strong player in the gaming console business. While in the past decade, the company struggled to survive in the market against strong competitors like PlayStation and Xbox. However, in the end, in terms of sales of video game consoles, Nintendo Switch is in the first position, with competitors like Sony and Microsoft, with a selling count of more than 25 million units in 2021. But how exactly did Nintendo turn around from that struggling period to today’s present situation?
Overview
In 1889, Fusajiro Yamauchi founded the Marufuku Nintendo Card Company in Kyoto, Japan, better known today as Nintendo. Although the company initially produced hand-painted playing cards called “Hanafuda”, in the early 19th century, it began producing Western-style playing cards for export purposes. These new style cards gained popularity in Japan as well as internationally. In 1933, the company changed its name to Yamauchi Nintendo & Co. After the death of Fusajiro Yamauchi in 1940, Hiroshi Yamauchi took over the company in 1949 and publicly listed Nintendo on the Osaka Stock Exchange in Japan in 1962.
In 1963, the company was again renamed Nintendo Co., Ltd, and from then on, the company began manufacturing playing cards and various games. In addition, from 1968, besides playing cards, Nintendo started expanding its business from love hotels to various industries, like hotels, taxi services, and robot vacuum cleaner manufacturing. In 1969, The company reinforced its game department, and a production plant was established in Uji City, Japan.
In the 1970s, arcade gaming became very popular in Japan as well as around the world. In 1970, Nintendo also introduced an arcade game-compatible electronic toy game called “Beam Gun,” which pushed Nintendo into the leading position in the game industry then. Even the world’s first gaming console, the Magnavox ODYSSEY, was released in 1972 and included Nintendo’s Light Gun product as a console accessory. In 1974, Nintendo developed the image projection system and implemented it in amusement arcades.
From that year, the company started exporting its manufactured arcade gaming machines to America and Europe. As a continuation of the arcade gaming machine, a gaming console called the Nintendo color tv game – 6 was launched in Japan in 1977 in collaboration with Mitsubishi. Following the console’s massive popularity, Nintendo launched an upgraded version of the same console, the Color TV Game – 15, and both versions of the console sold nearly one million units each.
Following the success of Color TV Games, within three years, the company launched three more new gaming consoles, namely the TV game racing 112, the TV Block Kuzushi, and the Computer TV game, each of which received excellent customer response. In 1979, Minoru Arakawa opened Nintendo’s first official operation in New York City, USA. One day, Gunpei Yokoi, an employee of Nintendo’s R&D department, watches a passenger on a train playing a calculator number game.
From there, Gunpei Yokoi generated the idea for the company’s first handheld gaming device, and in 1980 Nintendo launched its first handheld gaming console, the “Game & Watch,” using a calculator microprocessor, sold a total of 43.4 million units. The video game industry boomed in the early 80s. However, between 1982 and 1985, third-party games on North American gaming consoles increased dramatically. Because of the abundance of games, new gaming consoles were also coming into the market, which led games and gaming consoles to poor quality.
As a result, demand for third-party games and consoles at the customer end also began to decline, and within two years, in 1985, the market size had dropped to just under $100 million. To overcome this situation in the newly rising gaming console industry, Nintendo launched the Nintendo Entertainment System or NES in the North American market in 1985. Through NES, Nintendo was able to rekindle consumer interest in video games, and by 1988 the company had become the dominant player in the console market with 70 percent market share in North America and generated $2.3 billion in revenue.
Rise
Famous as the longest-surviving video gaming console in history, Nintendo NES is a third-generation gaming console that sold 62 million units globally before it was discontinued in 1995. Nintendo first introduced games like Final Fantasy, Castlevania, Metroid, and Legend Of Zelda through this game station. But in 1989, another gaming console brand, SEGA, launched “Genesis”, a powerful and hardcore gaming device that became very popular back then. As a result, SEGA soon became a strong competitor for Nintendo, and the console war began. To compete with SEGA, Nintendo launched their second handheld gaming device called “Gameboy”, which was a massive hit, selling 3 million units in 2 weeks after the release. Till today, the device was sold 119 million globally.
In 1990, Nintendo launched two other gaming consoles: Super Nintendo and Super Famicom. Then, in 1991, the company rebranded the 16-bit Super Famicom console and launched as Super NES or SNES in the USA, which could process the game better and deliver an enhanced audio experience. Apart from these, Nintendo implemented the Advance Cartridges system in SNES for a seamless gaming experience. At that time, the SNES generated a total of 49.10 million unit sales, surpassing Genesis’ 34.06 million unit sales. On the other hand, at the Consumer Electronics Show held in Chicago on May 28 of the same year, Sony announced a collaboration with Nintendo to launch a new CD Drive version of the SNES.
But, Nintendo thought that by collaborating with Sony, Sony would take advantage of Nintendo’s popularity to promote itself and become a competitor in the game business in the future. The idea was solidified when a Sony engineer in charge of the project defined the partnership as the first step in creating Sony’s own gaming console. Consequently, the day after the announcement, Nintendo publicly stated that the company was collaborating with Netherlands-based Philips on the project instead of Sony. This led to the launch of a new gaming console manufacturing division called Sony Computers Entertainment. In 1994, Sony Computers Entertainment released the PlayStation 1, the world’s first gaming console with CD storage and 3D graphics technology.
As Sony was making CD Storage based gaming consoles, game developers were more focused on making games for PlayStation instead of other gaming consoles with built-in storage. Besides, Sony’s 3D games are more attractive than Nintendo’s 2D games, and the gaming experience was also relatively smooth. So, consumers are more interested in PlayStation 1. Meanwhile, in 1995, Nintendo launched Virtual Boy, the first virtual reality-based gaming console. They believed the new device would attract more customers and bring back Nintendo’s lead in the console world.
However, by then, the Play Station had become so popular that the Virtual Boy console failed in its mission, selling only 7.7 million units. It was the first financial failure for Nintendo. However, when Nintendo launched the 64-bit console device Nintendo 64 or N64 in 1996, which became an instant turnaround after Virtual Boy’s failure. The N64 console sold 500,000 units on its first release day and around 33 million globally. Later in 2000, the company launched three more variants of the Gameboy console named – the Gameboy Pocket, Gameboy Lite, and Gameboy Color, which were as successful as previous Gameboys.
But by then, Sony’s PlayStation console lineup had grown in popularity significantly. To stay competitive, in 2001, Nintendo launched another home gaming console, the Gamecube, where games could be played using mini discs. When the console was released in the US market in November, 95 percent of the 2.7 million units shipped were sold out by December. The total sales volume of the device was 21.74 million units, while in the US market alone, its sales volume was 12.55 million units.
The same year, the company launched the Gameboy advanced, a handheld gaming device as powerful as the SNES, where Nintendo’s original games could be ported and played. Gameboy advanced became so popular among game lovers that it sold more than 81 (81.51) million units globally. At the same time, a pocket-sized gaming console, Nintendo Pokemon Mini, was launched but discontinued within a year of its launch due to lack of demand, as only ten games could be played.
Finally, in 2004, the dual-screen handheld console device Nintendo DS was launched and was Nintendo’s best-selling device of all time. Apart from the dual screen, advanced features such as small cartridge size, WiFi, and touch screen were also available in the console. Not only for Nintendo but also for handheld gaming consoles, the Nintendo DS is still the best-selling device globally, with total sales of over 154 million units.
In 2005, Nintendo launched the Gameboy Micro, a mini version of the Gameboy. However, Nintendo’s new home gaming station, the Wii, released in 2006, played a major role in keeping Nintendo ahead of its competitors. The console generated 6 lakh unit sales in just eight days from its release.
Additionally, the Wii’s lifetime sales totaled 101.63 million units, far more than its competitors, PlayStation 3 (87.40 million) and Xbox (85.81). However, two more consoles, Nintendo DSi and Nintendo DSi XL were released in 2008-09 but failed to attract as many customers. On the other hand, the Wii, which was released three years earlier, was still generating sales, with the company’s revenue at the end of 2009 standing at around $19 (18.761) billion.
According to Statista, in 2010, the Wii held a 49 (48.7) percent market share of the console market, while the other two top competitors, the Xbox 360 and PlayStation 3, had a market share of 27.3 percent and 24 percent, respectively.
Fall
After the massive success of the Nintendo Wii and Nintendo DS, the company launched the Wii Family Edition and Nintendo 3DS in 2011 and the Wii U in 2012, but all three consoles were not successful at all. In fact, the Wii U was Nintendo’s second biggest commercial failure after the Virtual Boy, as the console sold just 3.45 million units in 2013 after its release.
In addition to issues with the gamepad and battery life, the Wii U failed to attract customers due to touchscreen issues, performance drops in third-party games, and more. Also, where competitors were providing the best gaming experience of 4K resolution through Blu Ray Disc Drive, Wii U could only offer HD resolution. Due to these reasons, the device has sold only 13.56 million units globally so far.
Also, at the time, Sony and Microsoft were providing consumers with seamless gaming experiences as well as versatile game libraries through their products. In addition, Microsoft and Sony reduced the pricing of their devices, while Nintendo’s products remained the same, negatively impacting overall sales.
On the other hand, since 2010, the use of smartphones at the consumer level was constantly increasing, and so has the smartphone gaming industry. With almost everyone having a potential gaming device in their hands, the need for dedicated handheld gaming devices decreased, posing a threat to Nintendo. As a result, the company’s revenue, which was around $19 billion in 2010, has steadily declined .every year and reached $4.3 billion at the end of 2017.
Rise Again
In 2017, Nintendo released the Nintendo Switch, a two-in-one hybrid system handheld gaming console that can be used both portable and docked. As of 2018, the device generated a total of 17.79 million unit sales after its global release. Thanks to the new changeable format, the Nintendo Switch can be played as a traditional home console connected to a monitor or TV and a portable handheld console using the side-mounted Joy-Con controller.
Capturing the home and portable market with the same device, the Nintendo Switch quickly gained popularity. Due to the sales of global consoles increasing during the corona epidemic, Nintendo Switch also increased. Mainly because of casual games like Super Mario Odyssey and Pokemon, Switch is very popular among novice gamers. The Nintendo Switch’s diverse gaming experience has seen console sales grow year-over-year, and since its release in June 2022, the device has sold 111.08 million units.
Besides, during the Corona period from September 2020 to March 2021, Nintendo also released several new games that were well received by Switch users. Among these games, Animal Crossing: New Horizons alone sold over 34 million copies, and Ring Fit Adventure, over 4 million copies. The Nintendo Switch’s and its games’ success helped the company turn around. In 2022, Nintendo ranked third among the top gaming console manufacturers by revenue, behind Sony and Microsoft, with $15.3 billion in revenue.
In addition, Nintendo has already started developing popular games from its game library, such as Pokemon Go, Super Mario, and Legend of Zelda, for mobile platforms. Among these mobile games, only the Super Mario Run and Mario Kart Tour games from the Super Mario series have already been downloaded more than 100 million times from the Play Store.
Leave a Comment