The history of Nintendo goes all the way back to 1889 and at that time they were not even selling Mario figures yet. In this article we will explain the importance of changing your strategy. We will discuss the history of Nintendo and the changes they have made in their strategy.
Nintendo, originally named ‘’Nintendo Koppai’’, was founded by Fusajiro Yamauchi in 1889. The small business based in Kyoto produced Hanafuda Cards. This are simple playing cards that are used to play multiple games, much like the more common standardized 52 playing card sets. Nintendo’s cards were handmade and quickly gained in popularity.
In 1953 Nintendo was being run by Fusajiro’s grandson Hiroshi Yamauchi and the company had become the first to produce plastic playing cards in Japan.
This initiative proved to be immensely popular and resulted in Nintendo dominating the industry. However, after a trip to the US in 1956, Hiroshi began rethinking the long term viability of the playing card business. He met with the largest card manufacturer in the country and was shocked by their small offices. He concluded that the business was far too limited.
In 1959 they started innovating, in collaboration with Disney. Nintendo struck a deal where they were able to print Disney character on their cards. They were able to tap into an entirely new market.
Nintendo created a new, younger target audience. Nintendo created books that explained new games that could be played with these cards. These books were very successful and over 600.000 packs were sold in the first year only. The success of this new venture made the company go public in 1962.
After that, some really interesting new business directions resulted for Nintendo. For example: a taxi company, a hotel and an instant rice food company. All of these ventures went nowhere.
Unfortunately for Nintendo, the playing card business reached its saturation point. Japanese households stopped buying them and Nintendo’s stock subsequently fell from 900 to 60 Yen. In 1965 they hired a new engineer, Gunpei Yokoi, for their assembly line and he would soon help turn Nintendo’s luck around.
In 1970 Hiroshi visited one of this Hanafuda factories. Hiroshi noticed Gunpei Yokoi playing with an extending arm that he had made. Deciding to take the gamble, Hiroshi requested Gunpei to develop his arm as a proper product and they released the product under the name of “Ultra Hand”. After that he developed more electronic toys for Nintendo. This was significant, because they were one of the few companies developing such toys at the time. As such, they were able to charge a higher price and earn a greater profit margin.
In this period of time, Nintendo began taking an interest in the popularity of video games. In 1975 they released their first game called EVR Race. It was closely followed by Donkey Kong, you probably heard of it. Nintendo limited the number of games that third party developers could release each year. Another milestone of this year was the release of Super Mario Bros.
As you can see, Nintendo changed their strategy many times. It was necessary to do, otherwise they wouldn’t make any profit by now. We think that Nintendo did a great job by switching from a playing card seller to a video game company. Nintendo analyzed the market and did a great job by producing the Ultra Hand, who was invented by an employee. Nowadays Nintendo have a lot of competition and their profit increases.
Recently, they introduced the Super Mario Run for the mobile phone. So, they changed their strategy again and hope to make more profit. What do you think? Do you think that this change in the strategy will safe Nintendo again, like it did so far?
Let us know in a comment below!