Nintendo has been suffering large losses in revenue this past year as competitors such as Sony, Microsoft, and Apple have been outperforming it.
Rather than paying hundreds of dollars for one of Nintendo's games, consumers are choosing to turn to substitute goods such as the inexpensive smartphone app, Angry Birds.
The only way for Nintendo to receive profits is to increase their prices. However, according to the law of demand, an increase in price will result in less consumer demand. Also, seeing as consumers are highly sensitive to changes in price in the video game market, price elasticity of demand is very high and doesn't fare well for Nintendo if they do not come up with a better idea and fast.
Source: http://www.businessweek.com/magazine/nintendo-needs-a-hit-in-a-hurry-02022012.html
Very true- Nintendo hasn't has a hit since the Wii. The supply has increased drastically over the past few years with all these new games coming out and new competitors. They better step their game up in this competitive market!
ReplyDeleteAs a somewhat avid gamer, my opinion on this matter is that nintendo is targeting the wrong audience. The wii seems like a console that primarily targets children and casual gamers, but costs nearly as much as the more hardcore gamer consoles such as the xbox 360 and playstation 3. Hardcore gamers won't usually buy it because of it's lack of games that appeal to that audience, and casual gamers won't because why would they spend that much money when they could just buy something like angry birds for a fraction of the cost and get just as much enjoyment out of it. I'm hoping to see some steps forward with their game choices in their upcoming conlsole, the nintendo wii u.
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ReplyDeleteI agree with the idea that Nintendo needs to find a new idea very fast. I would consider them to be a dying brand in gaming as the wii that they offered was an initial hit and then competition matched them and perhaps even surpassed their technology with things like xbox kinect and playstation move. The wii was the last thing I can remember them having that was good and the fact that most of the games werent appealing in my opinion made me not want to buy them and when their competition came out with similar technology their is no way I would have bought a wii game. I feel that a lot of gamers have this mindset, which is why they are struggling.
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