Nintendo invented the phenomenon of home computer games, but has seen its original lead overturned by more aggressive competitors. For better or worse, it brought us the delights of Pokemon, the Super Mario Bros and other digitised characters who, during the 1980s and 1990s, managed to break out into broader popular culture. More recently, Nintendo's one-time dominance has been undermined by new competitors. Long-time rival Sega fell by the wayside, but the company's hold over the home console sector was stolen by Sony in 2000, and further weakened by Microsoft's Xbox. Those twin rivals now dominate the market. Nintendo also faced competition in the handheld market, a segment in which it had enjoyed a virtual monopoly since the late 1990s, from multiple competitors including smartphones. The company bounced back in 2006, delivering a stunning return to form with its Wii console, which reclaimed mastery of the sector through innovative technology and software designed to appeal to a broad family audience. However, Nintendo had appeared woefully unable to come up with a new device to succeed that ageing device. A new combined console and handheld combination, the Nintendo Switch, finally launched in Spring 2017, and after a slow start, managed to win over a sizeable audience, causing group revenues for the year ending 2018 to more than double. That recovery continued over the next two years, helped by the launch of a new handheld Switch Lite in 2019. Revenues for ye 2020 were Nintendo's best for a decade, equivalent to around $12bn, with net profit of $2.4bn. The Switch console had sold a cumulative total of 55.8m units by Mar 2020, more than any of the company's other consoles since the original NES system from the early 1980s and, of course, the Wii, still overall champion at a combined total of 101.6m units. The 3DS handheld device is still being marketed, but sales are in steep decline. Tatsumi Kimishima stepped down as CEO in summer 2018 to be succeeded by Shuntaro Furukawa.
Capsule checked 20th May 2020
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Adbrands Weekly Update 3rd May 2018: Nintendo's Switch console, launched last Spring, hasn't quite generated the ecstatic headlines its predecessor Wii managed to accumulate a decade ago, but it has delivered results where they matter: financially. For the year to March, Nintendo's revenues more than doubled to the equivalent of $9.5bn, while earnings jumped by more than a quarter to almost $1.3bn. That follows a prolonged slowdown in the early 2010s as the company struggled to find a path back to growth. The Switch console sold more than 15m units in its first full year, helped along by the Super Mario Odyssey game, which sold more than 10.4m units. The company's 3DS handheld device is still doing well, with volumes of over 6.4m units. Riding the wave of that recovery, 68-year-old CEO Tatsumi Kimishima announced plans to step down in the summer, and will be succeeded by Shuntaro Furukawa, more than 20 years his junior.
Adbrands Weekly Update 2nd Nov 2017: Nintendo looks like it has a long-awaited and much-needed hit on its hands with its latest console, Switch. Though the new device hasn't exactly been lighting up the media like the company's last breakout the Wii did a decade ago, sales of Switch are far surpassing expectations, despite a slow start, taking even Nintendo by surprise. In fact, the company has been struggling to keep up with demand. Revenues for the latest quarter almost tripled over the year ago figure, and were some 30% higher than analysts had been expecting. As a result, Nintendo has raised its forecast for volumes for the year to next March by almost a third to 16.7m units, and said that revenues and operating profit for the year would both be almost twice earlier predictions.
Adbrands Weekly Update 27th Oct 2016: Nintendo unveiled its long-awaited follow-up to the Wii gaming console, previously code-named NX. The new platform's name was confirmed as the Nintendo Switch, a hybrid console/handheld system which allows users to switch between portable gaming or playing on a big screen via a home console. Few other details were released beyond a teaser video, but a launch date has been set for March 2017. It also appears that the new system won't be backwards compatible with existing Wii or 3DS games. With so few details available, commentators struggled to make a judgment on the new device. However, at this point it certainly doesn't appear to offer the sort of revolutionary leap forward in gaming offered by the original Wii. For the current financial year, Nintendo also warned that profits would come in below expectations, despite a large one-off gain from the sale of its shares in US baseball team Seattle Mariners.
Adbrands Weekly Update 14th Jul 2016: After years struggling against the steep decline of its once-mighty Wii gaming console, Nintendo appears finally to have come up with a new hit. Augmented reality experience Pokemon Go is only its second smartphone game, jointly developed by its part-owned subsidiary Pokemon Co with Niantic, a games developer spun out from Google parent Alphabet in which it has a small shareholding. This stormed to the top of the gaming app charts this week following release in just three markets: the US, Australia and New Zealand. It arrived in Germany yesterday and is eagerly awaited elsewhere, not least in Japan. After just one week, it's already the most popular mobile game ever in the US with 21m daily users, resulting in blanket coverage in even the most serious of media outlets. "We're standing at a defining moment in the history of technology," gushed the Wall Street Journal's Joanna Stern. "It's much more than a game - it's the future of how we're going to interact with computers." Players must use their smartphones' GPS to find virtual Pokemon characters in real world city locations: the characters pop up superimposed on real places seen through the device's camera, and have to be "captured" for points. The game itself is free, but players can buy in-game accessories to improve their performance, and sales are currently running at $1.6bn per day. There is also significant potential to partner with retailers to encourage players into their stores in search of characters. Niantic has said it plans to invite coffee shops, restaurants and other retailers to become sponsored locations. It's far from clear how much Nintendo itself will benefit financially from the game, but the general excitement has prompted an extraordinary surge in the company's ailing share price. By close of play yesterday, it had jumped by 75% in a week to levels not seen since 2011.
Adbrands Weekly Update 28th Jan 2016: Ads of the Week: "Pokemon 20". Here come the Super Bowl sneak peeks! Nintendo is seeking to raise its game in the US - long overdue - by re-establishing the iconic Pokemon brand, which it co-owns with two other Japanese software companies. To mark Pikachu and family's 20th birthday, the Pokemon Company is investing big money in a Super Bowl spot conceived by creative boutique Omelet. It's an upbeat and heavily inspirational little film in which the little yellow chap makes only a fleeting appearance. Unfocused perhaps - what after all is it actually promoting? - but memorable nonetheless.
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