Cobbs Management 100 Nintendo Case Competition
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This document provides an overview of Nintendo's business including financial projections, product plans, and organizational structure changes from 2016-2020. Key elements include: - Projected profit to increase from $5 billion in 2016 to over $25 billion by 2020 through new products, services, and markets. - New initiatives include the Nintendo Engage console, mobile games, an online game store, and Nintendo-branded entertainment experiences like movies and theme parks. - The organizational structure will shift from separate divisions to an integrated model to accelerate innovation and collaboration across teams.
Cobbs Management 100 Nintendo Case Competition
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- 16. #1
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- 18. My Account My Account My Account
- 21. Active Games
- 28. 1 2 3 4 +
- 29. 0 5,000,000,000 10,000,000,000 15,000,000,000 20,000,000,000 25,000,000,000 2016 2017 2018 2019 2020 Profit($) Projected Profit Revamped Gaming Distribution Entertainment Total
- 31. SWOT Analysis Sources Timeline of Implementation Core Problem 4-Step Plan Xperience Store Engage Console Online Game Store New Mobile Experience Rebrand Internal Culture Nintendo Cloud Build Nintendo SDK Nintendo World Nintendo Movie Nintendo Engage Financials Nintendo Mobile Financials Nintendo Overall Results Nintendo World Financials Nintendo Movie Financials Xperience Store Financials Game Store Financials Industry Today Gaming on Engage Organizational Structure
- 32. 2016-2020 2016 2017 2018 2019 2020 Revenue $6,925,661,582.51 $10,195,055,393.5 1 $14,550,566,804.4 8 $25,537,431,208.8 0 $29,479,457,155.7 9 Cost of Sales $5,979,324,866.00 $8,233,168,549.65 $11,269,727,617.6 4 $18,929,508,430.4 8 $21,677,795,257.4 8 SG&A $1,699,646,092.05 $1,665,653,170.21 $1,632,340,106.81 $1,599,693,304.67 $1,567,699,438.58 R&D $778,007,850.40 $816,908,242.92 $857,753,655.06 $900,641,337.81 $945,673,404.71 Change of Total Assets $0.00 $332.03 $342.00 $352.26 $362.82 Taxes $327,288,252.95 $481,791,064.83 $687,620,891.11 $1,206,830,733.15 $1,393,120,341.71 Free Cash Flow - $1,858,605,478.88 - $1,002,465,966.12 $103,124,191.86 $2,900,757,050.44 $3,895,168,350.49 Free Cash Flow/ Revenue -26.84% -9.83% 0.71% 11.36% 13.21%
- 33. Implementation Timeline 2016 • New Brand Introduction • Circulation and Intrapreneurship Programs Launch 2017 • Release 1st wave of smartphone games • Launch Nintendo Engage • Launch Nintendo Cloud • The Nintendo Movie 2018 • Open 3 Xperience Stores • Release Second Wave of Smartphone Games 2019 • Launch Build Nintendo • Nintendo World 2020 • Third Wave of Smartphone Games • Expansion of Xperience Stores
- 34. 2011-2015
- 35. Nintendo World
- 36. Nintendo Movie
- 39. Revenue $1,010,000,000 Cost $704,148,022 Profit $305,851,978 NintendoCloud
- 40. Nintendo EA Sports Game Popularity Pokemon X/Y (3DS): 13.1 million sales New Super Smash Bros: 11.63 million unit sales (3DS+WiiU) Net: 24.73 million sales Game Popularity FIFA 15: 17.65 million unit sales (PS4,XBox1,PS3,XBox360) Madden NFL 15: 6.15 million unit sales (PS4,XBox1,PS3,XBox360) Net: 23.8 sales Mobile Revenue Projected: Mobile Market Growth 42% Expected Yearly growth: 30% 2016: $250 2017: $324 2018: $422.5 2019: $549.5 2020: $714.025 Mobile Revenue 2011: $242 million 2012: $284 million (17% growth) 2013: $366 million (28% growth) 2014: $452 million (23% growth) 2015 $524 million (16% growth) 21% Average Growth Nintendo Mobile Revenue: EA Comparison
- 41. Nintendo Engage: The Console of the Future Virtual Reality Industry Assumption: Nintendo able to take 1% market share in 2016, 1% growth through 2020 (In millions) 2016: $180 2017: $810 2018: $3375 2019: $9680 2020: $20250 (In Millions) Industry Net Value as Projected by Forbes 2016: $6000 2017: $18000 2018: $45000 2019: $88000 2020: $150,000 Alliance similar to that with DeNA $200 million in shares as well as $200 million investment with Matterport to develop existing AR/VR technology into Engage system 2016: First model of Engage created 2017: Worldwide distribution and use Google Invested $500 million in VR firm Magic Leap in 2014 Matterport has raised $90 million, has VR software. Needs investment to expand production and capabilities. Nintendo Engage Financials and Explanation
- 42. Mobile Gaming Market Share 2 Price Annual Revenue 2 Nintendo DS / 3DS XL $199.99 Sony PlayStation Vita $199.99 Tablets and Cell Phones 94% by 2017 ~$700 without subsidy 22,400,000,000 by 2017 Combined 5% by 2017 Combined $2,400,000 by 2017 Portable Consoles Have No Future Mobile Gaming Market Share Price Annual Revenue Nintendo DS/ 3DS XL & Playstation Vita 5% 199.99 $2,400,000 by 2017 Tablets/ cell phones 94% ~700 $22,400,000,000 by 2017 Source: http://fortune.com/2015/01/15/mobile- console-game-revenues-2015/
- 43. Strengths Weaknesses Opportunities Threats • Renowned quality • Timeless appeal • Strong character development • Slow to adapt to industry changes • Infrequent releases • Stagnant corporate health • Growing smartphone game segment • Differentiate with new technology • Entertainment • Casual game developers • Weaker appeal to younger generation
- 44. Game Developmen t Platform Technology Support Systems Administration Business Old vs. New Era Organizational Structure System Developmen t Nintendo Network Services Support Systems Entertainment Business Developmen t Game Developmen t Platform Technology Support Systems Administration Business President Kimishima and Executive Board President Iwata And Executive Board Integrated Research Development Administration and Support
- 45. Background Problem Recommendation Results
Editor's Notes
- #5: The company, which didn't hold its customary conference call or a media briefing, logged an operating loss of ¥9.47 billion ($92.7 million) for its fiscal first quarter ended June 30, compared with a ¥4.92 billion loss a year earlier. Nintendo 3DS sales declined 41%, falling below one million units for the second straight quarter, while hand-held software sales dropped 22%. Wii U sales tripled to 510,000 consoles, the company said three straight years of profit loss July 2015 Nintendo President and CEO Satoru Iwata died at only 55 years old after battling cancer for over a year one of the industry’s only corporate luminaries with substantial hands-on game creation experience Iwata’s playful, almost mischievous and refreshingly candid personal style that so endeared him to the company’s fans In 2011, he helped launch a video series dubbed Nintendo Direct, personally emceeing the company’s biggest surprises, often with quirky framing twists, like an effects-laden mock kung-fu brawl with Nintendo of America President Reggie Fils-Aimé for E3 2014. At Nintendo’s E3 2015 presentation last month, he appeared as a Muppet designed by The Jim Henson Company “Iwata Asks,” a remarkable series in which Iwata interviewed members of Nintendo’s many development teams Mr. Iwata conducted with the company’s employees revealed an easy, amiable camaraderie and were peppered with jokes and teasing
- #6: Change internal culture and refresh brand Core Business Software for Mobile-wrong with miitomo, wrong with DS, how to fix current and move forward New hardware and software for home gaming Entertainment Non-core businesses Physical Retail Stores / Xperience Stores Online services Build Nintendo developer program Online Game distribution Nintendo cloud
- #8: Hierarchy rules Group-decision making Older executives who do not understand modern gaming Ideas unfamiliar to executives likely to be vetoed prematurely Outdated product concepts Top-bottom Shadowing Workshops Executives shadow younger employees Modern Management Workshops Management and organizational experts/consultants educate Nintendo managers Increase communication between all levels Provide safe space for cross-rank interaction Expose decision makers to current and upcoming gaming trends
- #9: Online Forum Monthly Conferences Annual Intrapreneur Exhibit Empowers non-executives to propose bold concepts Few fresh, innovative ventures by younger employees Promotes internal entrepreneurship Strengthens networking and communication Platform for Idea Conception and Feedback Monthly Informational Conferences Annual Nintendo Intrapreneurship Exhibit Employees post and submit ideas for cool projects they have for Nintendo on online forum. Those interested in pursuing ideas can choose to collaborate and develop project Allots paid time in work schedule for employees to pursue new ideas and projects for Nintendo Absorb risks and creates a safe space for employees Empowers less experienced, lower ranked employees to push through ambitious proposals. Utilizes collaboration and networking Share and bounce ideas off each other The Nintendo Pioneer Program uses group insight and networking to share and bounce ideas off each other in hopes of giving birth to new innovative project ideas. Furthermore, it helps people with less experience and lower rank to feel empowered and push through ambitious proposals. Online idea exchange Crowd-brainstorming and social feedback Cross-divisional and cross-branch collaboration Monthly Informational Conferences Present projects and popular forum ideas Annual Nintendo Intrapreneurship Exhibit Employees and executives interact with prototypes and talk to makers Final projects featured on website Executives choose promising innovations to develop
- #11: should delete this slide
- #12: Understatement; 11 years old as platform; not willing to carry secondary, gaming specific device in age of modern smartphone
- #13: Discontinue DS (serves as distraction); Cancel Miitomo (doesn’t utilize core competencies); publish most popular titles on iOs and Android for both cell phones and tablets
- #14: Common complaint with mobile surrounds loss of comfort and power Inexpensive to develop because bluetooth Mention how it would help a tired parent keep an annoying kid occupied on a road trip. plane, etc.
- #15: New Home Console: Engage Short Video Mention NX?
- #17: Integrate with Matterport and expand technology for $400 million
- #18: Stay put on their couch, however Engage will provide more immersive experience than tv Active games: players and their surroundings become a part of the game Important to talk about the safety concerns and space concerns Active Games Splattoon: The Last Frontier Mario Super Strikers 2: World Cup Fever The Legend of Zelda: Ocean Stride
- #19: ONE account; ONE library of games; ONE set of high scores and achievements Not only makes for better user experience, but also encourages users to buy into entire Nintendo ecosystem
- #22: (https://www.youtube.com/watch?v=cML814JD09g) Large industrial buildings in urban centers Meatpacking District in Manhattan Kwun Tong District of Hong Kong Tables of iPhones and iPads loaded with Nintendo mobile games Similar to spaces used for laser tag or paintball (mostly open with a few bunkers, stairwells, and walls) Nintendo Engage Goggles overlay virtual characters, targets, buildings and objects into the space and turn it into an ultra flexible, immersive, real life video game Not charge for usage (Virtual reality is difficult to explain; best way to sell people on concept is to let them try it out)
- #25: Bucket idea: do this movie and nintendo world
- #26: elements of a fiction get dispersed systematically across multiple delivery channels for the purpose of creating a unified and coordinated entertainment experience
- #27: elements of a fiction get dispersed systematically across multiple delivery channels for the purpose of creating a unified and coordinated entertainment experience
- #34: •2015 New Brand Logo Expansion Nintendo Cloud •2016 First Wave of Smartphone Games Intrapreneurship Program Launch Game Store Opens Swatch X Nintendo Released 2017 Xperience Store Launch at 3 locations Engage Released Second Wave of Smartphone Games IKEA X Nintendo 2018 The Nintendo Movie Nintendo World Vans X Nintendo 2019 Build Nintendo Engage Series 2 Third Wave of Smartphone Games Expansion of Xperience Stores
- #41: http://www.statista.com/statistics/217478/digital-revenue-of-ea-since-2011-by-type/ http://www.newzoo.com/insights/global-games-market-will-reach-102-9-billion-2017-2/
- #44: may want to shorten, cut certain bullets
- #45: DON’T FREAK OUT THE TEXT WILL BE ANIMATED SO THERE WON’T BE TEXT OVERLOAD
- #46: Form collaborations with strategic partners to create Nintendo merchandise. Create fashionable, quality items to coincide with the rebrand. Make Nintendo aspirational, premium, and in-style