Nintendo's 8-bit power play a staple for MBA courses
by Vladimir Cole 
{ Sep 9th 2006 at 3:34AM }
Two of my MBA courses this semester include cases on Nintendo, the first of which centers on Nintendo's well-documented tendency to play hardball during the 8-bit era.
As luck would have it, we'll be covering the case just before I head to Tokyo to cover TGS for Joystiq. If I'm not too slammed, I'll post a synopsis of the class discussion here. In the meantime, here's a summary of the case, to whet your appetites:
"The home video-game industry began in 1972 with the founding of Atari. After riding a dramatic boom and bust in the early 1980s, most players left the business. Nintendo of Japan then rebuilt the industry--establishing a commanding worldwide position by the end of the decade. By 1990, Nintendo game systems could be found in one out of every three households--in both Japan and the United States. The company's stock market value exceeded that of Sony or Nissan. The case describes the steps Nintendo took to achieve this success. Also covers the U.S. antitrust investigation of Nintendo."
Wharton bschool profs appear to be hip to happenings in the games industry. Last semester, I had a final exam question on the hot coffee scandal. In an operations management (OPIM) class, we discussed shortages around the launch of the PS2 and PSP. And even the Dean of the school has been touting the benefits of game-like simulations for learning.
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Reader Comments (Page 1 of 1)
Bill @ Sep 9th 2006 3:50AM
ROBERT SUMMA WOULDNT HAVE POSTED SUCH A BORING BLOG
Hurr hurr
GCNH87 @ Sep 9th 2006 3:59AM
O.O
Where do you go to school at? Heaven?!
Jed Merrill @ Sep 9th 2006 5:16AM
Is the case published by Wharton or Harvard? I'll have to suggest it to my profs.
John Lucas @ Sep 9th 2006 7:12AM
Well if it wasn't for that 8-bit power play we might not be playing games today.
In North America the industry almost died.
Sure Nintendo had to be taught a lesson but I'm glad they came along to maintain this pastime.
NOTHING in the industry would be the way it is today without Nintendo.
No NEC, no Sega, no handhelds, no Sony, no Microsoft.
And most of all no cultural impact.
Gaming would most likely be an isolated computer hobby endeavor at best if that company from Japan didn't step in.
And interestingly enough a lot of Yamauchi's standards & ideals set forth from the days of the Famicom/NES still hold true today with that company. At least from company itself: quality control/products, affordable pricing, innovation, respect for their franchises.
Sure Nintendo has its dark side but trust me if another were in their position they would MUCH MUCH worse.
After a 85-90% market dominance with the NES they release their 2nd home console at the same $200 price??? Wouldn't happen with another company. Sega proved it. Sony's proving it. Microsoft would prove it if they had the chance.
Making their products so sturdy & durable that even bombs in the Gulf War can't destroy them???
I really wonder why more people don't respect & show gratitude for a company that goes the extra mile to give you a good product. It's so easy not to.
Sometimes you don't know a good thing until it's gone...
John Lucas
GSI @ Sep 9th 2006 7:40AM
That's an excellent point John. Sure Nintendo might have been a little harsh on they're quality control standards but when you take a look at the previous generation of consoles (which had no real control system), those platforms eventually died out b/c of horrible games.
If Nintendo had not done what it did, then we might have till been in the same cycle of having crappy designed games coming out after a couple of years.
WamBam @ Sep 9th 2006 9:45AM
Bleh! Dang silver spooned Penn kids ruining West Philly! Wharton, no less! But maybe I'll come and sit in on one of these classes.
Bryan @ Sep 9th 2006 9:49AM
What I find funny is that Nintendo was demonized for many of their practices, but if Microsoft -- who has pulled plenty of monopoly bs of their own -- had done the same thing then, it would not have been an issue. Because Nintendo was a Japanese company, many people wanted them stopped.
It's also ironic since people could have done absolutely nothing about their "reign of terror -- Sony and the market did that for them. Of course, now we have cheaply built hardware and less quality control when it comes to game production. Now Sony is the hot seat, and they're not handling it as well.
Frank @ Sep 9th 2006 10:15AM
wharton school of business? the one donald trump is always touting as the best school in the world?
vc @ Sep 9th 2006 11:24AM
Jed, the linked-to case is published by HBS.
vc @ Sep 9th 2006 11:29AM
Frank: that's the one. Trump's a graduate of the school, so of course he's a little biased.
BrotherEstapol @ Sep 9th 2006 12:30PM
Could someone tell us non Americans wtf MBA stands for please? :P
I'm assuming it's a University of some sort?(hence all the talk of "courses" and "learning")
WamBam @ Sep 9th 2006 12:45PM
It stands for Masters of Business Administration, Brother. It's a post-graduate degree. It's really a multi purpose degree for entering into the business world, especially if you want to be a manager or executive.
Wharton has one of the top (I say it's the best) MBA program in the country, which is where Vlad is going. If he plays his cards right and hobnobs with the bluebloods, he'll be able to leave this crappy blogging job behind.
schtum @ Sep 9th 2006 12:47PM
@Estapol
It's not school, it's a type of degree (Master's of Business Administration, if I'm not mistaken). Wharton is a well known business school, so "bschool" in the last paragraph is not a typo.
alidarjarok @ Sep 9th 2006 1:17PM
I took a few Wharton business courses while I attended UPenn, and can confirm that we spent a week on the NES in an intro to management course. The written material was published by the Harvard Business school, so obviously they teach the same material. Was a really interesting course, they'd look into detail each new management idea, with Nintendo's being a way to build a ton of confidence so shortly after the crash.
K-G @ Sep 9th 2006 1:33PM
This isn't that surprising...the Video game hardware industry often makes for "good" cases due to the nature of the industry (long product lifecycles, high barriers to new entrants, the importance of marketing, limited competition, buyer lock in, importance (or in Nintendo’s case lack of) of vendor relations, general lack of influence of outside forces (i.e. government interference), ect). While some other industries have similar attributes, the lines drawn in the hardware biz are unusually clear in most cases….ie ,GM usually doesn’t run TV ads saying that Ford cars are for wussies, but that tone was common in Sega ads for quite a long time.
But business school isn’t always boring cases…when I got my MBA (8 years ago) we did have a case on if and what type of desiccation equipment a pudding factory should buy but we also had a marketing case on the fallout of St. Ides malt liquor radio commercials using Ice Cube (‘St Ides…it gets your girl in the mood quicker and makes your jimmy thicker’) that the ATF and certain community groups didn’t care for
GeoWolf @ Sep 12th 2006 4:03PM
Except they're wrong. The home game industry DIDN'T begin with Atari. Sigh... Obviously a Professor trying to get by on illconceived myth rather than research. As someone who actually HAS done research into the nature of the origins of the videogame market. I can point out that the first major attempt at penetrating the home market was made by Magnavox, with the Odyssey, in 1971, after becoming interested in the research and developments of Ralph Baer (www.ralphbaer.com) - the father of the modern videogames console.
Mind you this doesn't even represesent the beginning of 2D gaming, which happens to go back even further (and I'm not just talking about Pong - checkout Space War, an earlier and more complicated game designed by the MIT team as a demonstrator for their PDP computer.
Certainly, Atari are the first big success story although, as rightly said, they're public presence is later overshadowed by Nintendo. Nintendo are the first company to really capture widescale public interest in home gaming on a console, although Atari's software and hardware innovations are probably the most important early endeavours in early gaming - including 3D gaming (Tank Wars) in 1980 and the first analog controller in 1982. Sadly though, many people seem to try to credit Nintendo with the analog controller in 1996 when, in fact, they simply revisited and perfected the idea - demonstating it's usefulness with Mario 64, optimised for use with the said peripheral.
johnjacob @ Sep 9th 2006 6:21PM
Wharton is America's first business school
GhaleonQ @ Sep 9th 2006 6:46PM
I'm only at the undergraduate college, but Dartmouth's Tuck business school did a seminar course on "modern phenomena in electronics business," too. There are better examples of the principles in United States history, but this is certainly a good (and fun) one.
Justin @ Sep 10th 2006 4:40AM
I worked in the game industry for a few years then went back for my MBA...graduated last spring and am back in the game biz now. You should check out the HBS Sega Dreamcast case.