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8-BIT CONSULTANTS

Report on Nintendo
Prepared by Adam Salazar, President
8-BIT CONSULTANTS, INC
Prepared !or
"ni#$ts In%estment &ro'p
!or possible a()'isition o!
Nintendo
Abstra(t
T$is !ormal report o'tlines t$e proposal p't !or*ard by 8-Bit Cons'ltants, In( to "ni#$ts
In%estment &ro'p in (onsideration o! t$e a()'isition o! Nintendo
T$is proposal ser%es to o'tline t$e details o! t$e $istory o! Nintendo, t$e (ompany+s assets and
prod'(ts, t$e pro,e(ted ann'al pro!it o! Nintendo in t$e ne-t !is(al year, t$e !inan(ial bene!its o!
a()'irin# t$e (ompany !or "ni#$ts In%estment &ro'p, and re(ommendations !or t$e timin# o!
a()'isition
T$is in!ormation is presented *it$in t$e report t$ro'#$ t$e !ollo*in# met$ods.
/ A brie! narrati%e des(ribin# t$e $istory o! Nintendo, its prod'(ts, (lientele, and ('rrent
!inan(ial o'tloo0
1 An e-amination o! t$e reasons *$y "ni#$ts In%estment &ro'p (an bene!it !rom a()'irin#
Nintendo, as *ell as t$e reasons *$y t$e timin# o! t$is a()'isition is (riti(al
2 Re(ommendations on $o* "ni#$ts In%estment &ro'p (o'ld potentially #ro* t$e
Nintendo brand and better (ompete *it$ ot$er %ideo #ame #iants s'($ as t$e Sony
Playstation and 3i(roso!t 4-Bo- lines
T$is report proposes t$at "ni#$ts In%estment &ro'p s$o'ld a()'ire t$e Nintendo brand be!ore
t$e end o! t$e !o'rt$ )'arter o! 15/2, in order to per!e(tly sit'ate t$e (ompany in s'($ a *ay as
to ma-imize pro!its and (ontend *it$ (ompetitors d'rin# t$e post-$oliday season and !irst
)'arter o! 15/6
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Table o! Contents
Abstract ---------------------------------------------------------------------------------------- : 1 ;
List of Figures ------------------------------------------------------------------------------- : 6 ;
Executive Summary ---------------------------------------------------------------------- : < ;
Introduction ---------------------------------------------------------------------------------- : = ;
Background & History of Nintendo --------------------------------------------- : 8 ;
Overvie of Nintendo !roducts --------------------------------------------------- : /5 ;
"arket Ana#ysis ---------------------------------------------------------------------------- : /1 ;
Financia# Summary ----------------------------------------------------------------------- : /6 ;
!ro$osa# Summary ------------------------------------------------------------------------ : /> ;
Antici$ated %om$#ications & So#utions ---------------------------------------- : /8 ;
%onc#usions & Fina# &ecommendations ---------------------------------------- : /? ;
&eferences -------------------------------------------------------------------------------------- : 1/ ;
Index ---------------------------------------------------------------------------------------------- : 11 ;
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List o! @i#'res
Figure '( Gender of Game Players --------------------------------------------------------------- : /1 ;
Figure )( Age of Game Players ------------------------------------------------------------------- : /1 ;
Figure *( Frequently Used Gaming Hardware ------------------------------------------------ : /2 ;
Figure +( 2013 Nintendo Financial Summary ------------------------------------------------- : /6 ;
A## images courtesy of Nintendo :***nintendo(o,pAen;
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B-e('ti%e S'mmary
T$is report details t$e spe(i!i(s and re(ommendations (ontained *it$in t$e #reater proposal o! 8-
Bit Cons'ltants, In( to "ni#$ts In%estment &ro'p !or t$e a()'isition o! Nintendo T$e !ollo*in#
*ill pro%ide an o%er%ie* o! t$e resear($ and !indin#s o! 8-Bit Cons'ltants, In( and *ill
en(o'ra#e "ni#$ts In%estment &ro'p to e-pedite t$e a()'isition o! Nintendo in order to
ma-imize pro!its and en(o'ra#e #ro*t$
Nintendo is a %ideo #ame and ele(troni( media (ompany re(o#nized *orld*ide !or its
Nintendo9, SNBS9, &ameboy9, Nintendo 8S9, and Cii9 system lines Notable !or its
('ttin#-ed#e te($nolo#y s'($ as t$e intera(ti%e, motion dete(tin# sensors o! its Cii9 (onsole
system, Nintendo is also *ell-0no*n !or pop'lar #ame titles s'($ as S'per 3ario9 and
Po0Dmon9 As a leader in t$e $and$eld #ame mar0et, Nintendo $as re(ently released t$e ne-t
#eneration o! its Nintendo 8S9 line. t$e Nintendo 28S9, 18S9, and 28S-4L9 Additionally,
Nintendo $as released t$e ne*est iterations o! t$e Po0Dmon9 !ran($ise, Po0Dmon 4 E F9,
a%ailable only !or 'se *it$ t$e ne*est Nintendo 8S9 #ame systems T$is release $as been met
*it$ o%er*$elmin#ly positi%e re%ie*s, $as (ontrib'ted to a sli#$t t'rn-aro'nd !or t$e ot$er*ise
sl'##is$ 15/2 t$ird )'arter, and is pro,e(ted to (ontin'e to in(rease pro!its t$ro'#$ t$e !irst
)'arter o! 15/6
C$ile Nintendo $as t$o'#$t!'lly released ne* #amin# systems and m'($-anti(ipated #ame
titles, t$e re(ent release o! bot$ t$e Sony Playstation 69 and 4-Bo- 2>59 pose a t$reat to
Nintendo+s mar0et !or t$e 15/2 !o'rt$ )'arter and $oliday season In an already de(linin#
mar0et, Nintendo is in dan#er o! bein# ed#ed o't o! t$e (ompetition i! mar0etin# strate#ies and
additional #ame titles are not properly implemented and distrib'ted
"ni#$t+s In%estment &ro'p (an bene!it !rom t$e s$i!tin# mar0et and (ompetition o! Nintendo+s
!inan(ial lands(ape by (apitalizin# on t$e 0airos o! t$e 15/2 !o'rt$ )'arter be(a'se.
Nintendo+s rep'tation as a leader in %ideo #ame te($nolo#y positions it se('rely as a
serio's (ontender in t$e ele(troni( entertainment ind'stry !or t$e !oreseeable !'t're
C$ile t$ere is no* sti!! (ompetition in t$e #ame ind'stry, "ni#$ts In%estment &ro'p (an
(apitalize on t$e ne(essity o! Nintendo to remain in t$e !ore!ront o! t$e mar0et by
implementin# an a##ressi%e mar0etin# (ampai#n t$at *ill appeal to t$e tar#et a'dien(e
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B-e('ti%e S'mmary
"ni#$ts In%estment &ro'p *ill be a(tin# at a moment o! 0airos by a()'irin# Nintendo
be!ore t$e end o! t$e 15/2 !o'rt$ )'arter, in *$i($ t$e potential !'t're !inan(ial bene!its
to "ni#$ts In%estment &ro'p ali#n *it$ Nintendo+s ne(essity to partner *it$
or#anizations t$at (an assist in ed#in# o't t$e (ompetition o! t$e #amin# ind'stry
T$is report details t$e $istory o! Nintendo, a (lose loo0 at t$e (ompany+s best-sellin# prod'(ts,
and an analysis o! t$e mar0et and (lientele o! t$e ele(troni( entertainment ind'stry It also
assesses Nintendo+s ('rrent !inan(ial stat's and pro,e(ted salesAre%en'e, potential (on(erns in
"ni#$ts In%estment &ro'p+s a()'isition o! t$e (ompany, and sol'tions to t$ose (on(erns, leadin#
to 8-Bit Cons'ltants, In(+s re(ommendation to 'ltimately a()'ire Nintendo be!ore t$e end o! t$e
!o'rt$ )'arter, 15/2
T$e re(ommendations presented in t$is proposal in(l'de potential mar0etin# strate#ies !or
"ni#$ts In%estment &ro'p to better respond to t$e (limate o! t$e ele(troni( entertainment
ind'stry a!ter a()'irin# Nintendo, re(ommendations on respondin# to t$e s$i!tin# %al'es o! t$e
#amin# a'dien(e, and s'##estions on *$i($ #amesAsystems *o'ld best bene!it !rom a
(on(entrated e!!ort to ma-imize sales and pro!itability o! t$e (ompany o%erall
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Introd'(tion
T$is report is intended to introd'(e and interpret mar0et resear($ re#ardin# t$e possible
a()'isition o! Nintendo by "ni#$ts In%estment &ro'p All !a(ets o! t$is report $a%e been
resear($ed by 8-Bit Cons'ltants, In( and are pro%ided as a means t$ro'#$ *$i($ "ni#$ts
In%estment &ro'p (an ma0e t$e best in!ormed de(ision on t$e terms and (onditions o! a()'irin#
Nintendo
In order !or "ni#$ts In%estment &ro'p to s'((ess!'lly meet t$e demands o! t$e ele(troni(
entertainment ind'stry i! a()'isition o! Nintendo is p'rs'ed, (are!'l (onsideration $as been
#i%en in t$is report to mar0et data, ind'stry-related periodi(als, and ('rrent trends in t$e %ideo
#ame e(onomy in t$e United States and abroad to better assist t$e "ni#$ts In%estment &ro'p
team in obtainin# a (lear 'nderstandin# o! t$eir in%estment options
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Ba(0#ro'nd E Gistory o!
Nintendo
Nintendo is t$e *orld+s lar#est %ideo #ame (ompany by re%en'e, $a%in# sold almost >=5 million
$ard*are 'nits and 6/< billion so!t*are 'nits to date Honsolidated 15/1I @o'nded in /88?,
Nintendo ori#inally sold playin# (ards (alled !anafuda t$at be(ame pop'lar #amblin# tools
t$ro'#$o't m'($ o! t$e Bdo era in Japan Today, Nintendo is re(o#nized as one o! t$e *orld+s
leaders in %ideo #ame entertainment, #ainin# instant s'((ess in Nort$ Ameri(a t$ro'#$ its /?8<
release o! t$e Nintendo Bntertainment System HNBSI and a((ompanyin# #ame title Su"er #ario
$ros T$ro'#$o't m'($ o! t$e late /?85+s and early /??5+s, Nintendo *ent lar#ely 'nri%aled in
t$e ele(troni( entertainment ind'stry, 'ntil t$e release o! Sony+s Playstation (onsole in /??>
See0in# to rein%i#orate t$e Nintendo brand, t$e release o! t$e Nintendo >6 (onsole added a ne*
dimension to t$e %ideo #ame ind'stry by introd'(in# ne%er-be!ore seen 28 poly#on renderin#,
impro%ed #rap$i(s, and m'ltiplayer (apabilities pre%io'sly 'n$eard o!
In addition to its ma,or (onsole systems, Nintendo *as amon# t$e !irst to establis$ itsel! as a
leader in t$e $and$eld #ame mar0et, releasin# its &ame Boy (onsole in /?8? Ar#'ably,
Nintendo $as sin(e dominated t$e $and$eld ind'stry, releasin# iterations o! t$e ori#inal &ame
Boy in its &ame Boy Po(0et, &ame Boy Li#$t, and &ame Boy Color systems t$ro'#$o't t$e
/??5+s and early 1555+s in Nort$ Ameri(a and B'rope T$ro'#$o't t$e prod'(tion o! $and$eld
#ame systems, Nintendo $as #ained notoriety in a n'mber o! titles and !ran($ises, most notably
t$e Po%&mon 'ni%erse
Amon# t$e te($nolo#i(al ad%an(es Nintendo $as pro%ided t$e ele(troni( entertainment ind'stry
*it$ is t$e 'um(le Pa%, introd'(ed in /??= *it$ t$e release o! t$e Nintendo >6 (onsole No* a
inte#ral part o! nearly all #ame (onsoles, t$e KR'mble Pa0 is one o! t$ose inno%ations t$at
be(ame an ind'stry standard *it$in a sin#le #eneration L r'mble is ta0en !or #ranted by so
many #amers no* t$at it *as (onsidered a minor o'tra#e *$en Sony opted to dit($ it !or t$e
Si-a-is PS2 (ontrollerM HB'($anan 1558I Ori#inally an separate addon to t$e standard Nintendo
>6 (ontroller, t$e R'mble Pa0 pro%ides ta(tile !eedba(0 to #amers by (a'sin# a sli#$t tremor in
t$e #ame (ontroller in response to %ario's a(tions on t$e s(reen
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Ba(0#ro'nd E Gistory o!
Nintendo
Today, Nintendo (ontin'es to play a pi%otal role in p's$in# t$e bo'ndaries o! t$e ele(troni(
entertainment ind'stry Nintendo+s Cii (onsole *as released in Nort$ Ameri(a in early 155>, and
($an#ed t$e !a(e o! player intera(tion *it$ its Cii Remote system 3otion sensin# and #est're-
tra(0in# $ad ne%er been so !'lly realized be!ore t$e introd'(tion o! Nintendo+s Cii (onsole, and
,'st as t$e R'mble Pa0 be(ame an ind'stry standard, t$e (apabilities o! (onsoles to tra(0 player
mo%ement is !ast be(omin# a baseline in(l'sion in ('rrent #amin# te($nolo#y
In 1556, t$e &ame Boy $and$eld line *as repla(ed *it$ t$e !irst iterations o! t$e Nintendo 8S,
and Nintendo $as (ontin'ed to be t$e lar#est player in t$e $and$eld mar0et Nintendo+s 8S
$and$eld systems !eat're d'al-s(reen play, mi(rop$one (apabilities, (amera %ideo te($nolo#y,
and a to'($ s(reen S'bse)'ent #enerations o! t$e Nintendo 8S line $a%e prod'(ed t$e Nintendo
8S Lite, Nintendo 8Si, and most re(ently, t$e Nintendo 28S and 18S Nintendo+s 28S line
introd'(es a t$ree-dimensional s(reen *it$o't t$e need !or 28 #lasses, and as o! t$e t$ird )'arter
o! 15/2, t$e Nintendo 28S is t$e $i#$est-earnin# (onsole system in Nort$ Ameri(a HLamore'-
15/2I
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O%er%ie* o! Nintendo Prod'(ts
Nintendo Cii
Introd'(ed in 155>, t$e Nintendo Cii $as sold o%er
8> million 'nits to date HNintendo 15/2I In
addition to t$e motion sensin# remote (ontroller,
Nintendo Cii o!!ers *i-!i internet (onne(tion,
a((ess to t$e Nintendo Store, and an Internet
C$annel t$at allo*s 'sers to atta($ o'tside
appli(ations to t$e system s'($ as Net!li- and
G'l'
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O%er%ie* o! Nintendo Prod'(ts
Ima#e (o'rtesy Nintendo(om
Nintendo Cii U
Introd'(ed in 15/1, t$e Nintendo Cii U is t$e ne-t
#eneration o! t$e Cii (onsole line @eat'res in(l'de
impro%ed, $i#$-de!inition #rap$i(s, and a ne*
(ontroller embedded *it$ a to'($s(reen, motion
sensin# t$ro'#$ #yros(ope te($nolo#y, di#ital
b'ttons, and a mi(rop$one To date, t$e Cii U $as
sold almost 6 million 'nits *orld*ide
Honsolodated 15/1I Ima#e (o'rtesy Nintendo(om
Nintendo 28S
T$e Nintendo 28S is t$e s'((essor to t$e earlier
Nintendo 8S line, boastin# 28 #rap$i(s *it$o't
t$e need !or spe(ialized 28 #lasses T$e Nintendo
28S *as released in Nort$ Ameri(a in 15//, and
$as sold almost 2< million 'nits *orld*ide
Honsolidated 15/1I
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3ar0et Analysis
3ar0et 8emo#rap$i(sN
Ima#e (o'rtesy Nintendo(om
Ima#e (o'rtesy Nintendo(om
Nintendo 18S
T$e Nintendo 18S is t$e latest iteration o! t$e
Nintendo 8S line, o!!erin# a less e-pensi%e, entry-
le%el $and$eld (onsole !or t$e b'd#et-minded
(ons'mer T$e Nintendo 18S allo*s play o! all
28S #ame titles, b't la(0s t$e 28 te($nolo#y o!
t$e 28S and 'tilizes a tablet-style desi#n in lie' o!
t$e (lassi( 8S (lams$ell T$e Nintendo 18S *as
released in Nort$ Ameri(a and B'rope in 15/2,
and a!ter a pri(e ad,'stment, t$e 18S be(ame Kt$e
U"+s best sellin# (onsoleM in early No%ember
H8rin# 15/2I
<8O
o! Ameri(ans play %ideo #ames
</O
o! US $o'se$olds o*n at least one
dedi(ated #ame (onsole
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3ar0et Analysis
US #amers most !re)'ently play #ames.
C$ile sli#$tly more males play %ideo
#ames t$an !emales, t$e per(enta#e is
nearly e%enly split
3ost #amers !all bet*een t$e a#es o!
1< 7 2>P, *it$ t$e a%era#e a#e o!
#amers bein# 25
N All mar0et data pro%ided by t$e Bntertainment So!t*are Asso(iation. t$eesa(om
Qideo #ames are an e!!e(ti%e met$od o! brin#in# US !amilies
to#et$er
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@inan(ial S'mmary
@or t$e 15/2 !is(al year.
<1O
o! parents say %ideo #ames are a
positi%e part o! t$eir ($ild+s li!e
<8O
o! parents play %ideo #ames *it$ t$eir
($ildren at least mont$ly
Nintendo is $istori(ally a !amily-!riendly (ompany,
(are!'lly desi#nin# #ames appropriate !or all a#es
'nder stri(t BSRB ratin# (riteria
N All mar0et data pro%ided by t$e Bntertainment So!t*are Asso(iation. t$eesa(om
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@inan(ial S'mmary
Cii U $as sold 2?/ million 'nits to date
Cii U $as not been able to maintain t$e initial sales moment'm a!ter t$e be#innin# o!
15/2 d'e to a delay in t$e de%elopment o! s'bse)'ent so!t*are titles
Cii U $as sold /?=/ million so!t*are 'nits to date
Net sales to date stand at R>,=<?,555 o! *$i($ o%erseas sales o'tside o! Japan a((o'nted
!or R6,<2=,555
Cii U $ard*are sales $a%e $ad a ne#ati%e impa(t on pro!its, *it$ t$e operatin# loss
standin# at R28=,555,555
N All !inan(ial data pro%ided by Nintendo. Nintendo(o,pAir
Nintendo 28S establis$ed itsel! as t$e leadin# plat!orm in Japan
Alt$o'#$ titles s'($ as New Su"er #ario $ros) 2 and Pa"er #ario* Stic%er Star be(ame
instant $its, t$ey did not #enerate s'!!i(ient sales moment'm
&lobally, sales o! Nintendo 28S $ard*are *as 26?8 million 'nits
&lobal sales o! Nintendo 28S so!t*are *as /1161 million
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Proposal S'mmary
8-Bit Cons'ltants, In( aims to pro%ide "ni#$ts In%estment &ro'p *it$ t$e most 'pdated mar0et
resear($ and !inan(ial data o! Nintendo and its prod'(ts in order to assist in t$e pro(ess o!
possible a()'isition o! t$e (ompany It is o'r re(ommendation t$at "ni#$ts In%estment &ro'p
s$o'ld mo%e !or*ard *it$ t$is %ent're on t$e basis o! t$e in!ormation (ontained *it$in t$is
report Nintendo presents a 'ni)'e opport'nity !or "ni#$ts In%estment &ro'p to enter into t$e
ele(troni( entertainment ind'stry at a time *$en %ideo #ame media is e-perien(in# a boomin#
#ro*t$ T$e Nintendo brand $as $istori(ally $ad #reat s'((ess in pro%idin# #amers *it$ top-
not($, ('ttin#-ed#e %ideo #ame entertainment, and "ni#$ts In%estment &ro'p (an be ass'red
t$at a()'isition o! Nintendo *ill lead to pro!its and (ommer(ial s'((ess "ni#$ts In%estment
&ro'p is on t$e ('sp o! a l'(rati%e b'siness %ent're *it$ a (ompany o! $i#$ rep'te in a mar0et
*$ere inno%ation, te($nolo#i(al ad%an(ement, and a'dien(e analysis are at t$e !ore!ront o!
(ompany priority
As t$e !o'rt$ )'arter o! 15/2 (omes to a (lose, Nintendo is seein# mar#inal losses to t$e sales o!
its ne*est #ame (onsole, Cii U Cit$ t$e re(ent release o! Sony+s Playstation 6 (onsole and
3i(roso!t+s 4-Bo- 2>5, Nintendo is at ris0 o! !'rt$er bein# impa(ted by sl'##is$ sales and net
losses T$is de(line in o%erall re%en'e pro%ides "ni#$ts In%estment &ro'p *it$ an opport'nity
to a()'ire Nintendo in a time *$en t$e (ompany !inds itsel! in need o! alternati%e mar0etin#
strate#ies and b'siness in%estments
Re(o#nizin# t$e re(ent setba(0s Nintendo !a(es, t$is proposal re(ommends t$e !ollo*in#
pra(ti(es ta0e pla(e in order !or t$e a()'isition o! Nintendo by "ni#$ts In%estment &ro'p to
pro%e a s'((ess!'l and pro!itable b'siness arran#ement.
"aintain t,e fami#y-friend#y. ES&B-a$$roved cu#ture of Nintendo and its $roducts
in order to (ontin'e to appeal to !amilies and ($ildren o! all a#es As t$e mar0et analysis
se(tion o! t$is report $i#$li#$ts, t$e %ideo #ame ind'stry is seein# a re(ent ('lt're o!
!amilies parti(ipatin# in play to#et$er, and a (are!'l attention to t$is se(tor o! t$e mar0et
*ill pro%e pro!itable !or t$e (ompany
Increase t,e $roduction of tit#es to be re#eased it, fort,coming game conso#es/ As
$as been s$o*n *it$ t$e release o! t$e Cii U, $ard*are sales are sl'##is$ to prod'(e
re%en'e *$en so!t*are titles are not ab'ndant at t$e onset o! (onsole release Nintendo
(an bene!it by sli#$tly delayin# !'t're (onsole releases 'ntil s'!!i(ient so!t*are titles
$a%e been de%eloped
N All !inan(ial data pro%ided by Nintendo. Nintendo(o,pAir
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Proposal S'mmary
Im$#ement aggressive marketing strategies to com$ete it, t,e abundance of Sony
and "icrosoft advertisements/ C$ile Nintendo does mar0et its prod'(ts *it$ tele%ision
and ma#azine ad%ertisements, t$e (ompany *o'ld bene!it !rom alternati%e met$ods s'($
as embeddin# ads in ot$er media, s'($ as G'l' Pl's ads and *eb bro*ser banners on
*ebsites #amers may !re)'ent HReddit, B'zz!eed, et(I
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Anti(ipated Compli(ations E
Sol'tions
Foreign exc,ange rates Sin(e Nintendo is an international (ompany, "ni#$ts In%estment
&ro'p *ill need to (are!'lly monitor !orei#n e-($an#e rates and $o* t$e %al'e o! t$e
US dollar (ompares to t$e Japanese Fen @l'(t'atin# e-($an#e rates may impa(t t$e
%al'e o! "ni#$ts In%estment &ro'p+s b'siness in%estment, and (are!'l (onsideration to
t$e ('rren(ies displayed in )'arterly earnin#s statements may s0e* t$e tr'e earnin#s o!
t$e (ompany
F#uctuating market environment and audience va#ues Sin(e Nintendo is an ele(troni(
media (ompany, it is #reatly impa(ted by t$e !l'(t'atin# interests o! t$e #eneral p'bli(
Ne* ad%an(es in portable de%i(es s'($ as (ell p$ones and tablets $a%e in(reased t$e
*ays in *$i($ 'sers (an en#a#e *it$ ele(troni( entertainment "ni#$ts In%estment &ro'p
is en(o'ra#ed to 'tilize Nintendo+s reso'r(es to e-plore *ays in *$i($ t$e (ompany (an
en#a#e *it$ 'sers t$ro'#$ t$ese alternati%e media o'tlets in order to remain (ompetiti%e
in t$e mar0et
ES&B ratings and game environment C$ile Nintendo $as $istori(ally maintained a
stri(t !amily-!riendly orientation, (ompetitors s'($ as Sony and 3i(roso!t o!!er de(idedly
more #rap$i( and ad'lt-t$emed (ontent in t$eir #ames "ni#$ts In%estment &ro'p s$o'ld
stri%e to maintain t$e !amily-oriented mar0et t$at Nintendo $as en#a#ed, b't s$o'ld
e-plore t$e possibility o! releasin# some titles t$at *o'ld appeal to older a'dien(es and
alternati%e BSRB ratin#s
Internationa# economy C$ile ele(troni( media is ('rrently e-perien(in# a #ro*t$ in
interest *it$ t$e de%elopment o! ne*, $i#$ly-ad%an(ed #amin# te($nolo#ies, Nintendo is
at ris0 o! bein# impa(ted by international e(onomy de(lines Cit$ s$i!tin# e(onomi(
stat's, Nintendo+s a'dien(e may (ome to see ele(troni( entertainment as an 'nne(essary
in%estment To (ombat t$is, "ni#$ts In%estment &ro'p *ill need to pay (lose attention to
prod'(tion and operatin# (osts *$en de%elopin# ne* $ard*are and so!t*are titles, to
minimize t$e impa(t a s'dden s$i!t in a'dien(e e(onomi( %al'es may $a%e
Con!idential 7 8o Not 8istrib'te
8-Bit Cons'ltants, In( Nintendo9 A()'isition Proposal
/8
Con(l'sions E @inal
Re(ommendations
C$ile "ni#$ts In%estment &ro'p may not $a%e initially (onsidered a()'irin# a ma,or ele(troni(
entertainment (ompany, t$e re(ent #ro*t$ to t$e %ideo #ame mar0et pro%ides t$e (ompany *it$
an opport'nity to ma0e an intelli#ent, pro!itable in%estment by a()'irin# Nintendo @'rt$er, *it$
t$e ('rrent sl'##is$ sales in Nintendo+s re(ently released $ard*are, "ni#$ts In%estment &ro'p is
in a position to in%est in t$e (ompany *$en it is most ne(essary to !ind partners *it$ sol'tions to
('rrent mar0et (ompli(ations
8-Bit Cons'ltants, In( also $i#$li#$ts t$e !ollo*in# as (onsideration !or t$e a()'isition o!
Nintendo by "ni#$ts In%estment &ro'p.
Nintendo+s $istory o! bein# a leader in t$e %ideo #ame ind'stry pro%ides t$e ass'ran(e
"ni#$ts In%estment &ro'p needs to 'nderstand t$e ebb and !lo* o! ele(troni(
entertainment b'sinessS a()'irin# Nintendo no* d'rin# a sli#$t de(line in sales positions
"ni#$ts In%estment &ro'p *it$ t$e opport'nity to reap t$e bene!its *$en a(tions are
ta0en to (ombat t$e s$i!tin# mar0et
Nintendo (ontin'ally p's$es t$e bo'ndaries o! *$at is e-pe(ted in %ideo #ame media,
and $as $istori(ally rein%ented t$e *ays in *$i($ #amers e-perien(e ele(troni(
entertainment "ni#$ts In%estment &ro'p stands to in%est in a (ompany t$at $as pro%en
to be a leader in ('ttin#-ed#e te($nolo#y, and *ill bene!it !rom t$e dedi(ated,
e-perien(ed team o! de%elopers Nintendo $as
C$ile Nintendo !a(es sti!! (ompetition !rom Sony and 3i(roso!t prod'(ts, t$e #eneral
opinion o! Nintendo prod'(ts is still $i#$ amon# t$e #amin# a'dien(e T$is pro%ides
"ni#$ts In%estment &ro'p *it$ an opport'nity to a()'ire a (ompany t$at already $as
establis$ed a !a%orable persona *it$ t$e intended mar0et
/?
Con!idential 7 8o Not 8istrib'te
8-Bit Cons'ltants, In( Nintendo9 A()'isition Proposal
Con(l'sions E @inal
Re(ommendations
&ecommendations
T$is proposal in(l'des a !e* detailed re(ommendations to "ni#$ts In%estment &ro'p in order to
ens're t$e s'((ess and pro!itability o! t$e a()'isition o! Nintendo Gi#$li#$ted else*$ere in t$is
report, t$e re(ommendations are as !ollo*s.
"aintain t,e fami#y-friend#y. ES&B-a$$roved cu#ture of Nintendo and its $roducts
in order to (ontin'e to appeal to !amilies and ($ildren o! all a#es As t$e mar0et analysis
se(tion o! t$is report $i#$li#$ts, t$e %ideo #ame ind'stry is seein# a re(ent ('lt're o!
!amilies parti(ipatin# in play to#et$er, and a (are!'l attention to t$is se(tor o! t$e mar0et
*ill pro%e pro!itable !or t$e (ompany
Increase t,e $roduction of tit#es to be re#eased it, fort,coming game conso#es/ As
$as been s$o*n *it$ t$e release o! t$e Cii U, $ard*are sales are sl'##is$ to prod'(e
re%en'e *$en so!t*are titles are not ab'ndant at t$e onset o! (onsole release Nintendo
(an bene!it by sli#$tly delayin# !'t're (onsole releases 'ntil s'!!i(ient so!t*are titles
$a%e been de%eloped
Im$#ement aggressive marketing strategies to com$ete it, t,e abundance of Sony
and "icrosoft advertisements/ C$ile Nintendo does mar0et its prod'(ts *it$ tele%ision
and ma#azine ad%ertisements, t$e (ompany *o'ld bene!it !rom alternati%e met$ods s'($
as embeddin# ads in ot$er media, s'($ as G'l' Pl's ads and *eb bro*ser banners on
*ebsites #amers may !re)'ent HReddit, B'zz!eed, et(I
Re!eren(es
B'($anan, Le%i H1558, April 2I +GN* Ha""y $irt!day, 'um(le Pa% Retrie%ed !rom
$ttp.AA***i#n(omAarti(lesA1558A56A52A$appy-birt$day-r'mble-pa0
Consolidated Sales Transition by Re#ion H15/1, April 12I Retrie%ed !rom
$ttp.AA***nintendo(o,pAirAlibraryA$istori(alTdataApd!A(onsolidatedTsalesTe/25?pd!
8rin#, C$ristop$er H15/2, No%ember /I 2-S .n/oys Half01erm Sales S"i%e Retrie%ed !rom
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Bntertainment So!t*are Asso(iation H15/2I 2013 Sales, -emogra"!ic and Usage -ata
Retrie%ed !rom $ttp.AA***t$eesa(omA!a(tsApd!sABSATB@T15/2pd!
Lamore'-, Ben H15/2, September /1I August NP- Sales -ata* #adden 22 1o"s Software,
3-S 1o"s Hardware Four #ont!s in a 'ow Retrie%ed !rom
$ttp.AA***#en#amenetA15/2A5?Aa'#'st-npd-sales-data-madden-1<-tops-so!t*are-
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15
Con!idential 7 8o Not 8istrib'te
8-Bit Cons'ltants, In( Nintendo9 A()'isition Proposal
Inde-
1/
Con!idential 7 8o Not 8istrib'te
8-Bit Cons'ltants, In( Nintendo9 A()'isition Proposal
11
)0S 2, 4, 11
*0S 2, 4, 11, 15
%ontro##er 6, 10
%onso#e 2, 6, 4, 10, 11, 12, 17, 20
0emogra$,ic 12
0ua#-screen 4
0S 2, 4, 11
0Si 4
0S Lite 4
ES&B 13, 17, 16, 20
1ame 2, 2, 7, 8, 6, 12, 17, 16, 14
1ameboy 2
1amer 6, 12, 13, 17, 18, 14, 20
Hand,e#d 2, 6, 4, 11
Hardare 6, 15, 12, 17, 16, 14, 20
"ario 2, 6, 15
"icrosoft 2, 12, 17, 16, 14, 20
"otion 2, 4, 10
!#aystation 2, 2, 6, 17
!ok2mon 2, 6
&umb#e !ak 6, 4
SNES 2
Sony 2, 2, 6, 17, 18, 16, 14, 20
Softare 6, 15, 12, 17, 16, 20
3ii 2, 4, 10, 12
3ii 4 10, 12, 17, 20
5-Box 2, 2, 17