Nintendo is a Japanese video game and consumer electronics multinational company. The brand started its journey in 1889 under the name of Nintendo Karuta and gained the legal status of a public company in 1960. The headquarter of Nintendo is in Kyoto, Japan.
Nintendo started selling color TV games and video game consoles in 1977. The company acquired worldwide recognition with the entertainment system in 1985.
Pokemon, Donkey Kong, Super Smash Bros, Mario, Star Fox, The Legend of Zelda, Splatoon, Kirby, Animal Crossing, Fire Emblem, and Metroid are some gaming franchises of Nintendo. The brand also produces gaming consoles. Nintendo DS, Nintendo Switch, and different generation models of Nintendo Wii (present and other previous generations).
Today, we’ll discuss the pestle analysis of Nintendo. How macro-environmental factors are impacting the video gaming and consumer electronics company.
Here’s the pestle analysis of Nintendo;
How Political Factors Affect Nintendo
No Political Involvement
Nintendo doesn’t side with any politician and political party. The company also doesn’t participate in any political marketing campaign and promote their agenda. Even the brand bans its relationship with the sub-brands and users if they have any political ties. Like the game “Animal Crossing: New Horizons.”
Nintendo issues a statement and it emphasized that their products are for personal use only. The company also provides specific guidelines if companies and businesses are using their product. According to Nintendo, the only way to avoid conflict is to get separate permission from the company.
For instance, the 2020 election campaign of Joe Biden and Harris created an island within the game “Animal Crossing: New Horizon.” It attracted a lot of attention of young voters on different social media platforms. You won’t see any other political involvement of Nintendo in its games.
How Economical Factors Affect Nintendo
The 2020 pandemic year of covid-19 has had a very bad impact on the businesses. Nintendo turned out to be doing very well in 2020. According to an estimate, the annual revenue of Nintendo in 2020 was 1.309 trillion yen. Out of which the net income of the brand was 258.641 billion yen.
According to a report by Dow Jones, the graph of Nintendo’s growth has been moving upward since 1987. The company’s profit has increased by approximately 200% since then. It’s because the brand has sold many of its old consoles at the new prices. The company is charging premium prices on the new consoles. That’s how Nintendo has earned a huge profit for the past few decades.
Isolation Increased its Usage
The pandemic of covid-19 and social distancing has shutdown many people into their houses. Video gaming has been the best activity to pass leisure time. It provides you an opportunity to explore, expand, and keep your mind occupied.
Video gaming isn’t an activity that you could while doing 9 to 5 jobs. That’s how the company survived during the health pandemic year by selling video games. The video game business was booming.
How Social Factors Affect Nintendo
Usage of Smartphones
The usage of smartphone devices has increased in recent years and the brand has also launched some games for smartphones. Nintendo claims that the company hasn’t invested much of its resources. The console video games are the main products of the brand. The company would probably go back to the sale of its basic product. The users would have to buy it from Nintendo’s E-store.
Retreat from the Mobile Market
Animal Crossing: Pocket Camp, Fire Emblem, Mario Kart Tour, and Dragalia Lost are some of the prominent smartphone games that Nintendo has launched. The brand has recently announced that it’s pulling back from the smartphone gaming market. They won’t develop and launch any new games for smartphones.
Losses in Mobile Games
According to some reports, Nintendo has suffered heavy losses from the mobile gaming market. The developers of smartphone games charge at the micro-level. When you combine all the micro costs, it becomes a huge amount.
Many critics hailed the company’s decision to completely avoid the fact that the future belongs to smartphone games. But the brand has got its reasons to launch or abandon any project.
Gaming Console Hardware
Nintendo is also heavily investing in the development of launching new games and updating its current gaming portfolio. The company has a vision of focusing on the manufacturing and selling of gaming console hardware. The gaming console hardware provides the company with a competitive edge and it uplifts the company to the same level of mobile games.
How Technological Factors Affect Nintendo
The gaming consoles of Nintendo have never competed with the console of Microsoft and Sony. The company has never even tried to compete against its competitors. The main focus of Nintendo is to develop gaming consoles that are easily accessible to gamers. They would play it on the company’s console hardware.
3rd Party Developers
Shifting its focus on the console hardware, it has allowed the company to hire 3rd party developers and bring them on the company’s platform. They would develop games for Nintendo’s consoles. If you follow the console standards of shifting from mobile games to consoles, it’s not a high power unit shift. It would allow the company to develop powerful consoles that only Nintendo could produce.
How Legal Factors Affect Nintendo
Nintendo has a complex legal history and the company’s stand on copyright and infringement issues is very strict. The company is also facing issues with fake software developers and pirated games websites. They develop Nintendo’s original console games and develop a computer game without the usage of consoles.
Nintendo has filed many lawsuits against the developers and companies for millions of dollars. The company has also appealed to them to take the stolen content from the website.
Nintendo is also facing the same issue with the soundtrack music of its video games. Some of the YouTube music channels and videos are playing the company’s music without music rights.
A company filed a lawsuit against Nintendo over the product failure of console switch. It claimed that the switch of the gaming console was out of its place after a few months of its purchase. The company repaired it after several months for 40 dollars.
It went back and forth three times for repairing of Joy-cons. The lawsuit comprises technical detail and photos of the damaged circuit.
How Environmental Factors Affect Nintendo
Mineral Source in Manufacturing
Many environmental activists question Nintendo for using the minerals for the manufacturing of its products. The company should work on the improvement of its raw material source and the company did it over the years.
Least Environmental Friendly Organization
According to the Greenpeace activist, Nintendo is one of the lowest environmentally-sustainable organizations based on its reports. The console manufacturing company hasn’t changed its policy on climate change, toxic chemicals, and usage of biodegradable/recyclable plastic for its products.
Most importantly, Nintendo doesn’t disclose its manufacturing processes. When Greenpeace can’t find anything, then they give zero points to the company.
On the other hand, the packaging of the gaming console comprises instructions on how to recycle the game after usage. The company also publishes a CSR report regularly.