hello again friends welcome back to case
studies this week we’re gonna talk about
Nintendo Nintendo was one that you asked
for and I’ve been listening to you and I
think there’s a very interesting case
study to look at the birth of Nintendo
forward and to learn two things the
first is understand your core
competencies and stick with them and
refer to those core competencies when
you’re making important strategic
decisions about your business point to
innovation is always about starting
again product innovation means maybe not
necessarily leaning on yesterday’s
products but finding new ones and we’re
gonna see how Nintendo was good at that
and how along the way they also learned
some hard lessons let’s talk at the
humble start of Nintendo to go back to
the start of Nintendo you have to go
back to 1889
now don’t worry we’re not gonna go all
the way back there but we’re just gonna
refer to it for a moment
and it was fusa hero Yamauchi who
launched Nintendo back in 1889 in the
word Nintendo believe it or not the
brand Nintendo means Nintendo which are
the kanji characters of sounds which
literally mean leave luck to heaven so
Nintendo as we go Nintendo means leave
luck to heaven in the original Japanese
Kanji so here he is 1889 and the
government has just legalized playing
cards can you believe that playing cards
legalized in Japan in 1889 so he says I
gotta sell him so he took the wood from
mulberry trees and was selling playing
cards he would run Nintendo successful
building a network of distribution
getting playing cards to every corner of
Japan under the Nintendo brand name and
he would do that for about 40 years
so Nintendo’s being passed to Hiroshi
right here about 1977 little before that
actually and he the first thing he does
is he fires every manager that was left
over and appointed by his grandfather
thanks granddad we’re making some
changes he hired younger managers
because he thought they needed to go
beyond playing cards into a more
innovative future he says no wait a
minute
what are our core competencies and he
said you know our core competence
is we know how to distribute things we
have relationships with an extensive
pipeline of stores and distributors and
sub distributors it’s a question of what
will distribute through there because
that is the strength of Nintendo one of
our core competencies playing cards
wasn’t a crazy innovation but we knew
how to get things everywhere so he said
about looking for a product category and
the one he found that really struck him
was the birth of the very very early
videogame industry and he said
Nintendo’s going in for video games and
we’re gonna use our distribution so that
we can get those video games and all the
shops are gonna sell them because
remember playing cards and the legacies
he was dealing with toy stores variety
stores and small stores that sold you
know minor bits of entertainment perfect
if he could get video games going he
could go to those same customers and
move him through that’s a great lesson
here about knowing your core competency
even though you might think playing
cards and novelty – technology video
games would be difficult well if he
pulls it off he’s got a place to sell it
so in 19 1977 excuse me
they had this little shoebox-sized
orange console that was called
translated into English the color
tv-game 6 which stood for something you
could play on a color TV and it had six
games in it that were all variations of
tennis in one form or another and later
oh we doubled it the TV
15:15 games in 1977 so that’s that’s
what it was all about and they ran that
they sold it they sold 1 million units
and then they counted all their dollars
or excuse me they counted their yen and
they lost money but they had learned
something people love games and were
willing to pay games and they were able
to sell them through their distribution
he then made a critical decision he said
they love these things but where is the
biggest market in the world for video
games the United States I need to get
into the United States so they looked at
the game market and he said you know
there’s two parts of this game market
part one is these little baby consoles
that had shown up like
ones they made but there was also the
full-size videogame that would be in the
arcade yep the great big square box the
size of a small refrigerator in which he
would play things later such as pac-man
well long before pac-man here they come
inventing their way into the large frame
videogame and so he wanted to find
somebody that could help him dive into
the American market specifically with
these large-scale video games and so he
had a relative that was living in
Vancouver Canada it happened to be a
gentleman that was married to his
daughter Yoko and his name was Arakawa
and he went to our Kawa and he said you
are just the man to open up Nintendo in
the United States you already live in
North America you live in Canada and in
1980 Nintendo of America was founded so
away we went and this begins that’s the
segment of the story the case study
where it’s really important to
understand your core competencies and if
you don’t have expertise somewhere turn
over every rock you can to go find
somebody to help you because it might
already be done it might already be an
expertise someone has go find them and
bring them in to your company or at
least consult with them and that’s what
he did he went out and he discovered a
pair of guys named al stone and Ron Judy
they were University of Washington frat
buddies that had been trying to be
entrepreneurs and he had a trucking
company and they formed a distribution
company called Far East video for video
games coming from the Far East and they
had used their assets to create a
company and they had heard about
Nintendo and they went to them they say
let us distribute your full-size video
games in America and the first one they
went out with was space fever and it was
kind of a ripoff of space invaders which
was the real hit one but nonetheless it
did well and back in those days he had a
phrase the quarter magnet that machine
there that game is a magnet for quarters
in other words all the quarters come out
of you in my pocket and we just play the
game for hours well the follow-ups were
terrible there were a sequel
to space fever and they just didn’t work
and now suddenly stone and judy were
almost ready to quit and I like what do
we do now when our caller said you know
what we’re gonna find a mega-hit
trust me we’re gonna do it and they
brought a game over called RadarScope
and they did some testing on RadarScope
they did some evaluations of it and they
thought it was going to be good so stone
and judy went out and sold the pizza
parlors the restaurants and the arcade
places and they got their game in there
and they showed up and the repeat play
on RadarScope was non-existent people
would play at once said yeah and then
didn’t play it again
suddenly Nintendo of America is on the
verge of death and they had all these
RadarScope games in stock because he had
gotten ready to move him over and that’s
when our karo went inside the company
said we got to make a different game we
got to figure this out and so he
identified Shigeru Miyamoto and Shigeru
Miyamoto is kind of this little slightly
long-haired real kind of a what we would
now call a gamer a game designer and he
had a lot of ideas and he was a designer
that they trusted and Nintendo had tried
to close a deal with King Features a
holding company of media assets United
States and they were gonna bring Popeye
the sailorman to a videogame it was a
game where Popeye I don’t if you know
Popeye he had a girlfriend named olive
oil and he had to save olive oil and
rescue her because that’s the way the
cartoon worked with Popeye he would eat
spinach get big muscles and go beat up
people and save his beloved girlfriend
so they were doing a video game where
that would happen to Popeye but he had
to jump and hop over obstacles back and
forth because his enemy the bully named
Bluto was trying to kidnap olive oil so
if you’re thinking that you’re already
hearing what game this is about keep
listening for a minute
this is this forced Miyamoto to say well
I guess I’ll make this thing into Popeye
and it caused him to think about that
framework and it was working for him
when King Features called and said we
don’t like the negotiation we’re pulling
our contract you
can’t use Popeye well now they’re like
great here we thought that this was
going to be the rescue for Nintendo and
we got a bunch of video machines for
this Popeye the sailorman what do we do
now we don’t have the rights to it well
they didn’t know what to do but Shigeru
Miyamoto said you know what give me a
second I have some ideas and so he went
working in his lab designing the game
and he says we have to ship the software
over to reprogram the video game those
big arcade video games we have and we’re
gonna have to paint something new on
them and we’ll have all the graphics
well everything so we can do that trust
me I’m coming so they come over there
and he brings the first one to them and
they plug it in with everybody watching
and up on the screen comes the little
logo Donkey Kong and here we have the
birth of what would be a legend in
arcade they were worried about it they
said this seems kind of silly you know
who wants to play a game or this little
red plumber guy has to go around
rescuing things and go save the princess
by bouncing around and jumping over
things but they’re like let’s go with it
and guess what there had never been a
arcade game like Donkey Kong it was the
biggest quarter magnet as they say of
all time then a Hollywood studio called
and said excuse me you’re violating our
copyright on King Kong well everyone was
hearing about the amazing profits that
Nintendo was making and so our Korra was
worried that he said is this just
Hollywood trying to shake me down and
trying to take the profits out of this
because they demanded all the profits
from Donkey Kong or they would sue them
and keep suing them in court and they
would be tied up in court forever yeah
nice guys in Hollywood right you can
tell this was when Hollywood had no clue
about new meet new revenue sources for
new media they were still defending old
copyrights and things except the Lincoln
lawyer shows up and I use that phrase
for a reason Howard Lincoln was
say very nice and very strong lawyer
that our car had used for a lot of the
like the deal he did with the was stone
and Judy and some other things and he
trusted him and he says what do we do
now and so Howard Lincoln went to work
he did a bunch of research and he found
out that Hollywood had forgotten to file
a full copyright trademark
on King Kong so he went to court and
fought and in 1983 the court not only
tossed out the case
they forced Hollywood MCA to pay over 1
million dollars in legal fees that
Nintendo had spent and a little bit of
damages and Nintendo had won
victoriously and Donkey Kong would go
well also about that time in the early
80s there was a bubble in the videogames
market what was happening was everybody
in there brother was making video games
including a pet food company named
Purina I mean what are they doing in the
space they don’t have the core
competencies to make video games so what
happened in any hot market in any bubble
market it popped and there was a crash
in the video game market right in the
early 80s where companies like Atari
went bankrupt and Sega was sold for
pennies on the dollar in the you know
mid 80s there as this market just was
crushed and then a funny thing happened
Nintendo lived and that lived on Donkey
Kong money because they kept going and
at that point the console which they had
introduced in Japan not too many years
prior came to the United States and it
came to the United States in the form of
the Nintendo Entertainment System the
NES right before NES came out there was
a thing called the Famicom console that
ninda Nintendo introduced in Japan and
it did ok and everything and they were
Nintendo Japan really wanted Nintendo
USA to bring it and so eventually they
said well let’s be patient let’s do a
good rollout and let’s do this properly
and in 1984
it came to the Consumer Electronics Show
and it didn’t get a lot of hype as a
matter of fact there were people at the
Consumer Electronics Show which was a
big big trade show in America where
careers and futures could be made and
broken in consumer electronics from TVs
to VCRs back then VCRs computers and
things like that it was a big deal and
in this little corner there was video
games that had really risen into
something and nonetheless Nintendo
Entertainment System was panned but
there was one guy that came up that they
met remember the part about core
competencies and work with people that
maybe have skills you don’t the Lincoln
Lawyer stone and Judy distributing games
to pizza parlors good people had come
and been part of the Nintendo success
and pulled it back from the edge more
than once in Sam boroff’s key a
marketing and sales representative
running a basically a marketing
consultancy in Manhattan says I see the
promise for this and what was
interesting is he had worked with Atari
during Ataris heyday and he knew if you
did it right that the American consumer
would go crazy for videogames so he had
the experience and he said let’s do a
launch of this because I really think
there’s something and they would
discover just a little while later that
the video game industry may have had a
bubble but the bubble cuz the wrong
people were making bad products in
reality the American consumer and the
love of video games was just getting
warmed up and the Nintendo Entertainment
System went on sale even as people like
Sega and others were crashing and when
this thing was launched it became one of
the most popular consoles of all time
over the life of the Nintendo
Entertainment System it would sell 61
million consoles and what was
interesting is when you added it up in a
few short years there was one Nintendo
console in every 30 American homes so
you take a little classroom every
classroom of kids in America say thirty
of them at least one of those
and a nintendo entertainment console all
across the United States one out of 30
to go from almost dying to being saved
by Donkey Kong to having one console in
every 30 American homes there’s only a
warden word for that and that is damn
they made a comeback and they defined an
industry and they set records that would
be you know still in place decades later
as the they really helped birth and grow
the video game industry and we’re a
leader among the many many players that
all had their contribution so they sold
believe it or not
six million consoles were sold in just
just 1988 which was incredible and about
the same time they took their talents to
the hand-hold
handheld excuse me portable console the
Gameboy and the Game Boy
and the Game Boy Color would sell 118
million units as every kid in America
that had seen and played Super Mario on
their Nintendo Entertainment System was
like I’m taking that show on the road I
want one too and suddenly they were
shown up in schools and kids are using
them as they said it was in their
backpack and they were loving it and so
that’s the that’s the story of how they
go from their birth to here now let’s
take a look at what happened now that
they’re in the game they have a hundred
and eighteen million handhelds they got
61 million here these green lines
represent the consoles the ones you
would put in your in your home connect
them to your color TV so the Super
Nintendo came out in 1990 sold 50
million units so down the Nintendo 64
would come out 96 31 million then the
Gamecube would come out no 1 and sell 21
million look what was happening with the
console sales the console sales were
going down but there was also
PlayStation and PlayStation 2 and
eventually Xbox Xbox 360 that were
jumping into the market so a big
competition the Game Boy Advance would
be the next handheld
and look at the success it would have an
O one it would move 81 million units
over its life introduced to no one and
then an O 4 they introduced the Gameboy
D s and the Gameboy D s would sell 154
million units over its lifecycle that’s
pretty amazing you step forward and I’ll
turn around a little bit here we get to
2006 the Wii comes out and suddenly this
trend comes back here’s what happened if
you take a look at each of these
consoles they really were building on
the past but you remember the Wii it
came out with action and you had
controllers that you could move around
with and there was the joke about the
wrist straps would break and the
controller would fly across the room and
break something at mom’s house well it
was new it was different so look what
happened when they applied the
innovation that was inside Nintendo they
made a serious comeback with it then you
know the on that they were still driving
handhelds and the 3ds comes out moves 65
million units to date and it was
introduced in 2011 and just recently the
new console which is a combination of
both the switch came out and the switch
they don’t even have the numbers up here
remember there was a Wii U which you
could carry around and it didn’t do very
well at all and so as you can see
Nintendo in its history it connected
along the way with people that could
help it when it didn’t have its core
competencies but it studied its core
competencies for distribution and that’s
how it lived and then its core
competencies for making games because if
you remember Nintendo was a company that
made a lot of its own games and didn’t
have as many third-party games in other
words games made by other studios to
work on their device whereas the Sony
Playstation was like hey man everybody
on the planet if you can make a game
will give you the development kit go
knock yourself out and it was very
successful and of course the PlayStation
2 became legendary as one of the top two
consoles ever in the history of gaming
anywhere at any time so here’s the two
things understand your core competencies
and find friends when you need them and
when you develop new core competencies
write them and
member innovation is often not merely
trying to build on the prior generation
sometimes it’s starting again with
completely new features and
functionality all of that can apply to
you whether you’re joining a company
like Nintendo or you’re starting
something yourself I thank you very much
I will see you next time
please subscribe to value tainment the
best channel on the internet for content
for entrepreneurs until next time i’m
thomas or that i hope i left you better
than i found you [Music]
studies this week we’re gonna talk about
Nintendo Nintendo was one that you asked
for and I’ve been listening to you and I
think there’s a very interesting case
study to look at the birth of Nintendo
forward and to learn two things the
first is understand your core
competencies and stick with them and
refer to those core competencies when
you’re making important strategic
decisions about your business point to
innovation is always about starting
again product innovation means maybe not
necessarily leaning on yesterday’s
products but finding new ones and we’re
gonna see how Nintendo was good at that
and how along the way they also learned
some hard lessons let’s talk at the
humble start of Nintendo to go back to
the start of Nintendo you have to go
back to 1889
now don’t worry we’re not gonna go all
the way back there but we’re just gonna
refer to it for a moment
and it was fusa hero Yamauchi who
launched Nintendo back in 1889 in the
word Nintendo believe it or not the
brand Nintendo means Nintendo which are
the kanji characters of sounds which
literally mean leave luck to heaven so
Nintendo as we go Nintendo means leave
luck to heaven in the original Japanese
Kanji so here he is 1889 and the
government has just legalized playing
cards can you believe that playing cards
legalized in Japan in 1889 so he says I
gotta sell him so he took the wood from
mulberry trees and was selling playing
cards he would run Nintendo successful
building a network of distribution
getting playing cards to every corner of
Japan under the Nintendo brand name and
he would do that for about 40 years
so Nintendo’s being passed to Hiroshi
right here about 1977 little before that
actually and he the first thing he does
is he fires every manager that was left
over and appointed by his grandfather
thanks granddad we’re making some
changes he hired younger managers
because he thought they needed to go
beyond playing cards into a more
innovative future he says no wait a
minute
what are our core competencies and he
said you know our core competence
is we know how to distribute things we
have relationships with an extensive
pipeline of stores and distributors and
sub distributors it’s a question of what
will distribute through there because
that is the strength of Nintendo one of
our core competencies playing cards
wasn’t a crazy innovation but we knew
how to get things everywhere so he said
about looking for a product category and
the one he found that really struck him
was the birth of the very very early
videogame industry and he said
Nintendo’s going in for video games and
we’re gonna use our distribution so that
we can get those video games and all the
shops are gonna sell them because
remember playing cards and the legacies
he was dealing with toy stores variety
stores and small stores that sold you
know minor bits of entertainment perfect
if he could get video games going he
could go to those same customers and
move him through that’s a great lesson
here about knowing your core competency
even though you might think playing
cards and novelty – technology video
games would be difficult well if he
pulls it off he’s got a place to sell it
so in 19 1977 excuse me
they had this little shoebox-sized
orange console that was called
translated into English the color
tv-game 6 which stood for something you
could play on a color TV and it had six
games in it that were all variations of
tennis in one form or another and later
oh we doubled it the TV
15:15 games in 1977 so that’s that’s
what it was all about and they ran that
they sold it they sold 1 million units
and then they counted all their dollars
or excuse me they counted their yen and
they lost money but they had learned
something people love games and were
willing to pay games and they were able
to sell them through their distribution
he then made a critical decision he said
they love these things but where is the
biggest market in the world for video
games the United States I need to get
into the United States so they looked at
the game market and he said you know
there’s two parts of this game market
part one is these little baby consoles
that had shown up like
ones they made but there was also the
full-size videogame that would be in the
arcade yep the great big square box the
size of a small refrigerator in which he
would play things later such as pac-man
well long before pac-man here they come
inventing their way into the large frame
videogame and so he wanted to find
somebody that could help him dive into
the American market specifically with
these large-scale video games and so he
had a relative that was living in
Vancouver Canada it happened to be a
gentleman that was married to his
daughter Yoko and his name was Arakawa
and he went to our Kawa and he said you
are just the man to open up Nintendo in
the United States you already live in
North America you live in Canada and in
1980 Nintendo of America was founded so
away we went and this begins that’s the
segment of the story the case study
where it’s really important to
understand your core competencies and if
you don’t have expertise somewhere turn
over every rock you can to go find
somebody to help you because it might
already be done it might already be an
expertise someone has go find them and
bring them in to your company or at
least consult with them and that’s what
he did he went out and he discovered a
pair of guys named al stone and Ron Judy
they were University of Washington frat
buddies that had been trying to be
entrepreneurs and he had a trucking
company and they formed a distribution
company called Far East video for video
games coming from the Far East and they
had used their assets to create a
company and they had heard about
Nintendo and they went to them they say
let us distribute your full-size video
games in America and the first one they
went out with was space fever and it was
kind of a ripoff of space invaders which
was the real hit one but nonetheless it
did well and back in those days he had a
phrase the quarter magnet that machine
there that game is a magnet for quarters
in other words all the quarters come out
of you in my pocket and we just play the
game for hours well the follow-ups were
terrible there were a sequel
to space fever and they just didn’t work
and now suddenly stone and judy were
almost ready to quit and I like what do
we do now when our caller said you know
what we’re gonna find a mega-hit
trust me we’re gonna do it and they
brought a game over called RadarScope
and they did some testing on RadarScope
they did some evaluations of it and they
thought it was going to be good so stone
and judy went out and sold the pizza
parlors the restaurants and the arcade
places and they got their game in there
and they showed up and the repeat play
on RadarScope was non-existent people
would play at once said yeah and then
didn’t play it again
suddenly Nintendo of America is on the
verge of death and they had all these
RadarScope games in stock because he had
gotten ready to move him over and that’s
when our karo went inside the company
said we got to make a different game we
got to figure this out and so he
identified Shigeru Miyamoto and Shigeru
Miyamoto is kind of this little slightly
long-haired real kind of a what we would
now call a gamer a game designer and he
had a lot of ideas and he was a designer
that they trusted and Nintendo had tried
to close a deal with King Features a
holding company of media assets United
States and they were gonna bring Popeye
the sailorman to a videogame it was a
game where Popeye I don’t if you know
Popeye he had a girlfriend named olive
oil and he had to save olive oil and
rescue her because that’s the way the
cartoon worked with Popeye he would eat
spinach get big muscles and go beat up
people and save his beloved girlfriend
so they were doing a video game where
that would happen to Popeye but he had
to jump and hop over obstacles back and
forth because his enemy the bully named
Bluto was trying to kidnap olive oil so
if you’re thinking that you’re already
hearing what game this is about keep
listening for a minute
this is this forced Miyamoto to say well
I guess I’ll make this thing into Popeye
and it caused him to think about that
framework and it was working for him
when King Features called and said we
don’t like the negotiation we’re pulling
our contract you
can’t use Popeye well now they’re like
great here we thought that this was
going to be the rescue for Nintendo and
we got a bunch of video machines for
this Popeye the sailorman what do we do
now we don’t have the rights to it well
they didn’t know what to do but Shigeru
Miyamoto said you know what give me a
second I have some ideas and so he went
working in his lab designing the game
and he says we have to ship the software
over to reprogram the video game those
big arcade video games we have and we’re
gonna have to paint something new on
them and we’ll have all the graphics
well everything so we can do that trust
me I’m coming so they come over there
and he brings the first one to them and
they plug it in with everybody watching
and up on the screen comes the little
logo Donkey Kong and here we have the
birth of what would be a legend in
arcade they were worried about it they
said this seems kind of silly you know
who wants to play a game or this little
red plumber guy has to go around
rescuing things and go save the princess
by bouncing around and jumping over
things but they’re like let’s go with it
and guess what there had never been a
arcade game like Donkey Kong it was the
biggest quarter magnet as they say of
all time then a Hollywood studio called
and said excuse me you’re violating our
copyright on King Kong well everyone was
hearing about the amazing profits that
Nintendo was making and so our Korra was
worried that he said is this just
Hollywood trying to shake me down and
trying to take the profits out of this
because they demanded all the profits
from Donkey Kong or they would sue them
and keep suing them in court and they
would be tied up in court forever yeah
nice guys in Hollywood right you can
tell this was when Hollywood had no clue
about new meet new revenue sources for
new media they were still defending old
copyrights and things except the Lincoln
lawyer shows up and I use that phrase
for a reason Howard Lincoln was
say very nice and very strong lawyer
that our car had used for a lot of the
like the deal he did with the was stone
and Judy and some other things and he
trusted him and he says what do we do
now and so Howard Lincoln went to work
he did a bunch of research and he found
out that Hollywood had forgotten to file
a full copyright trademark
on King Kong so he went to court and
fought and in 1983 the court not only
tossed out the case
they forced Hollywood MCA to pay over 1
million dollars in legal fees that
Nintendo had spent and a little bit of
damages and Nintendo had won
victoriously and Donkey Kong would go
well also about that time in the early
80s there was a bubble in the videogames
market what was happening was everybody
in there brother was making video games
including a pet food company named
Purina I mean what are they doing in the
space they don’t have the core
competencies to make video games so what
happened in any hot market in any bubble
market it popped and there was a crash
in the video game market right in the
early 80s where companies like Atari
went bankrupt and Sega was sold for
pennies on the dollar in the you know
mid 80s there as this market just was
crushed and then a funny thing happened
Nintendo lived and that lived on Donkey
Kong money because they kept going and
at that point the console which they had
introduced in Japan not too many years
prior came to the United States and it
came to the United States in the form of
the Nintendo Entertainment System the
NES right before NES came out there was
a thing called the Famicom console that
ninda Nintendo introduced in Japan and
it did ok and everything and they were
Nintendo Japan really wanted Nintendo
USA to bring it and so eventually they
said well let’s be patient let’s do a
good rollout and let’s do this properly
and in 1984
it came to the Consumer Electronics Show
and it didn’t get a lot of hype as a
matter of fact there were people at the
Consumer Electronics Show which was a
big big trade show in America where
careers and futures could be made and
broken in consumer electronics from TVs
to VCRs back then VCRs computers and
things like that it was a big deal and
in this little corner there was video
games that had really risen into
something and nonetheless Nintendo
Entertainment System was panned but
there was one guy that came up that they
met remember the part about core
competencies and work with people that
maybe have skills you don’t the Lincoln
Lawyer stone and Judy distributing games
to pizza parlors good people had come
and been part of the Nintendo success
and pulled it back from the edge more
than once in Sam boroff’s key a
marketing and sales representative
running a basically a marketing
consultancy in Manhattan says I see the
promise for this and what was
interesting is he had worked with Atari
during Ataris heyday and he knew if you
did it right that the American consumer
would go crazy for videogames so he had
the experience and he said let’s do a
launch of this because I really think
there’s something and they would
discover just a little while later that
the video game industry may have had a
bubble but the bubble cuz the wrong
people were making bad products in
reality the American consumer and the
love of video games was just getting
warmed up and the Nintendo Entertainment
System went on sale even as people like
Sega and others were crashing and when
this thing was launched it became one of
the most popular consoles of all time
over the life of the Nintendo
Entertainment System it would sell 61
million consoles and what was
interesting is when you added it up in a
few short years there was one Nintendo
console in every 30 American homes so
you take a little classroom every
classroom of kids in America say thirty
of them at least one of those
and a nintendo entertainment console all
across the United States one out of 30
to go from almost dying to being saved
by Donkey Kong to having one console in
every 30 American homes there’s only a
warden word for that and that is damn
they made a comeback and they defined an
industry and they set records that would
be you know still in place decades later
as the they really helped birth and grow
the video game industry and we’re a
leader among the many many players that
all had their contribution so they sold
believe it or not
six million consoles were sold in just
just 1988 which was incredible and about
the same time they took their talents to
the hand-hold
handheld excuse me portable console the
Gameboy and the Game Boy
and the Game Boy Color would sell 118
million units as every kid in America
that had seen and played Super Mario on
their Nintendo Entertainment System was
like I’m taking that show on the road I
want one too and suddenly they were
shown up in schools and kids are using
them as they said it was in their
backpack and they were loving it and so
that’s the that’s the story of how they
go from their birth to here now let’s
take a look at what happened now that
they’re in the game they have a hundred
and eighteen million handhelds they got
61 million here these green lines
represent the consoles the ones you
would put in your in your home connect
them to your color TV so the Super
Nintendo came out in 1990 sold 50
million units so down the Nintendo 64
would come out 96 31 million then the
Gamecube would come out no 1 and sell 21
million look what was happening with the
console sales the console sales were
going down but there was also
PlayStation and PlayStation 2 and
eventually Xbox Xbox 360 that were
jumping into the market so a big
competition the Game Boy Advance would
be the next handheld
and look at the success it would have an
O one it would move 81 million units
over its life introduced to no one and
then an O 4 they introduced the Gameboy
D s and the Gameboy D s would sell 154
million units over its lifecycle that’s
pretty amazing you step forward and I’ll
turn around a little bit here we get to
2006 the Wii comes out and suddenly this
trend comes back here’s what happened if
you take a look at each of these
consoles they really were building on
the past but you remember the Wii it
came out with action and you had
controllers that you could move around
with and there was the joke about the
wrist straps would break and the
controller would fly across the room and
break something at mom’s house well it
was new it was different so look what
happened when they applied the
innovation that was inside Nintendo they
made a serious comeback with it then you
know the on that they were still driving
handhelds and the 3ds comes out moves 65
million units to date and it was
introduced in 2011 and just recently the
new console which is a combination of
both the switch came out and the switch
they don’t even have the numbers up here
remember there was a Wii U which you
could carry around and it didn’t do very
well at all and so as you can see
Nintendo in its history it connected
along the way with people that could
help it when it didn’t have its core
competencies but it studied its core
competencies for distribution and that’s
how it lived and then its core
competencies for making games because if
you remember Nintendo was a company that
made a lot of its own games and didn’t
have as many third-party games in other
words games made by other studios to
work on their device whereas the Sony
Playstation was like hey man everybody
on the planet if you can make a game
will give you the development kit go
knock yourself out and it was very
successful and of course the PlayStation
2 became legendary as one of the top two
consoles ever in the history of gaming
anywhere at any time so here’s the two
things understand your core competencies
and find friends when you need them and
when you develop new core competencies
write them and
member innovation is often not merely
trying to build on the prior generation
sometimes it’s starting again with
completely new features and
functionality all of that can apply to
you whether you’re joining a company
like Nintendo or you’re starting
something yourself I thank you very much
I will see you next time
please subscribe to value tainment the
best channel on the internet for content
for entrepreneurs until next time i’m
thomas or that i hope i left you better
than i found you [Music]
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