BUSINESS MATHEMATICS

LAUNCHING OF NEW PRODUCT

Nintendo
The Launch of Game Boy Color

Group Member

Saurabh Gharde Vidyadhar Hegde Pratik Patil Gopal Borkar

30 33 53 11

Nintendo History
1889: Nintendo was founded by Fusajiro Yamauchi as a manufacturer of 'Hanafuda Japanese playing cards. The name 'Nintendo' actually means 'leave luck to heaven

1970: first field of video entertainment after creating the Beam Gun with opto-electronics
1980: launched Game & Watch which was an LCD based platform that had 59 games 1983: introduced first home console, Nintendo Entertainment System (NES)

Nintendo History
Since the release of Game Boy, Nintendo has also introduced, Super Nintendo, Nintendo 64, and Game Boy Advance to the market 1997: it was estimated that more than 40% of U.S. households owned a Nintendo game system Nintendo is the worldwide leader in home gaming systems.

Game Boy History

1993: Original Game Boy was offered in various colors including, blue, yellow, and red 1994: Super Game Boy was launched enabling gamers to play Game Boy games on TV through the Super Nintendo system 1997: Game Boy Pockets released in six new colors November 23 1998: Anticipated launch of Game Boy color in North America and Europe

SWOT

Strengths

Opportunities

Weaknesses

Threats

Strengths

Strengths
Game Boy is the most successful gaming platform in history sold more than 70 million units during its almost 10-year life Nintendo was the leader in the worldwide US$15 billion retail video game industry. Nintendo manufactured and marketed hardware and software for its game systems Nintendo 64 is named Time Magazines Machine of the Year for 1996. Improvements: o In 1994, an add-on for the Super Nintendo Entertainment System was launched, enabling gamers to play Game Boy games on that system. o In 1996, Game Boy was relaunched in a slimmer housing with further improvements in screen clarity. o In 1997, Game Boy Pocket was introduced in six new colors.

Weaknesses

Weaknesses
Both Game Boy hardware and software sales had declined steadily from 1992 to 1996 on a worldwide basis. By 1998, support of third-party developers for Game Boy was waning. Many viewed it as a spent force in the market and were reluctant to invest the US$200,000 to US$300,000 to develop a new Game Boy cartridge, when there were more attractive opportunities in the much larger console market. The marketing communications budget for Nintendo in Canada was only a small fraction of the Nintendo budget in the US. Also, Nintendo Canada selected its ads from the pool developed by Nintendo in the US.

Opportunities

Opportunities
On November 23, 1998, a color version of Nintendos Game Boy would be released simultaneously in North America and Europe, one of the most important launches in Nintendos history. Sega and other competitors lacked new exciting software for their handheld hardware. Handheld users seemed to want exciting, current software. Six new games, specifically developed to take advantage of the 56-color palette on Game Boy Color, were expected to be available at the launch date.

Threats

Threats
In 1998 Nintendo began to lose momentum as some of the third-party developers began focusing more of their development effort on Sony Playstation, which was viewed as an easier platform on which to develop games, and the Sony business model was viewed as being a more profitable one. Sega had been much more aggressive in promoting its console business in Canada than in the US. Third-party developers were spending fewer marketing dollars in Canada due to the relatively small size of the Canadian market. Canada represented only about 3 percent of the global Game Boy software market, whereas the US accounted for between 35 percent to 40 percent. In the late 1990s, a number of specialty stores had delisted Game Boy because they felt that they were not achieving competitive returns on their sales of Game Boy hardware and software. Competition: o Atari Lynx, the worlds first color handheld video game system. o TurboExpress o Segas Game Gear o Segas Nomad

Issue Identification
Issue #1: Choosing the right target market and the right positioning Issue #2: Choosing the right market approach Issue #3: How to price Game Boy Color. Issue #4: Product

Issue #1: Target Market and Positioning

Alternative #1: Focus on teens who were more likely to already own a Game Boy Alternative #2: Focus on new kid/tween users

Issue #2: Marketing approach

Alternative #1: In-store interactive display Alternative #2: Mall tour Alternative #3: Cross Canada tour

Issue #3: Pricing

Alternative #1: Price Game Boy Color according to the mid-1998 exchange rate conversion of U.S. price
U.S.= $79.95 Cdn =$120

Alternative #2: Price Game Boy Color at a lower cost of Cdn= $100

Issue #4: Product

- Alternative #1: Continue to offer the Black and White version of the product - Alternative #2: Stop offering the black and white version Game Boy - Alternative #3: Bundle a game cartridge with the Game Boy Color - Alternative #4: Do not bundle a game cartridge with the Game Boy Color

Implementations
short-term:
focus advertisements and literature on the $120 price, which includes a game cartridge, and towards both teen and new kid/tween user markets begin research and creation of the cross-canada tour gather information about consumer response and satisifaction advertise aggressively in the beginning to promote the new Game Boy Color to both target markets with separate campaigns focused at each market individually

long-term:
execute the cross-canada promotions tour sign a young celebrity as a spokesperson for Game Boy Color to appeal to the young target markets

Recommendations
Focus on both teens already own a Game Boy and new kid/Between users The best marketing approach is a cross-Canada tour because we felt this is the best way to generate buzz and increase brand awareness and same time it is the most informative way to educate users on the new product. We also felt the other two approaches can be carried along after the launch of Game Boy Color PR:
we also recommended what has been stated in the case
Sales Reps visit leading magazine/web publications three month before product launch and let the writers to play the game for 5-6 hours

Game Boy Color should be priced at Cdn $120 to best satisfy factors such as profitability, consumer price sensibility and sufficient motivation for retailers to carry the product. Lastly, we have decided that Nintendo should stop offering the black and white version Game Boy and bundle a game cartridge with Game Boy Color. This will not only encourage users to try new Game Boy Color but also make them adopt to the new product faster.

CONCLUSION

We need to work on all four issues for successful launch of the product

Thank You