Read time: 3 minutes 41 seconds

Sometimes it’s the ‘fun’ industries that have the most heated competition.

Sometimes it’s the ‘old’ strategies that offer the timeless lessons.

I’ve had Nintendo on my ‘to-write-about’ list since I first started this newsletter.

But, I could never land on an angle.

How do I choose just one strategic idea from a 135-year old manufacturer, that’s relevant to today’s business builders?

Last weekend I was doing some ‘research’, playing Ocarina of Time with some N64 USB controllers and an emulator, and it all came together.

Enjoy.

— Tom

Nintendo’s marketing playbook

Chess Move

The what: A TLDR explanation of the strategy

Nintendo was founded in 1889, originally making Hanafuda playing cards.

Today, they are the undisputed market-leader for family-friendly video games.

But, it took 90 years of experimenting as a taxi company, food company, ‘love hotel’ chain, and toy company, before they released their first video game.

What was it about their video gaming strategy that defined their success today?

Legendary president and CEO of Nintendo Satoru Iwatu once said, “Above all, video games are meant to be just one thing: fun. Fun for everyone.”

Competitor game developers duked it out over tech spec superiority, fighting over their share of the ‘core gamer segment’.

Nintendo ignored tech specs and built a kids toy, then used storytelling to win the ‘family’ segment over time.

Breakdown

The how: The strategic playbook boiled down to 3x key takeaways

1. It’s not a console. It’s a toy.

The early 1980s video game boom was a battle between Atari, Intellivision, and Colecovision for console and arcade gaming market share.

Nintendo entered the space with Donkey Kong; a smash hit earning $180 million in under 2 years, and saving the company from near-bankruptcy.

But the revenue spike was short-lived.

The industry quickly turned into a land-grab with sub-par games flooding the market.

After 3 years of overhyping and underdelivering, arcade game industry revenue dropped by 66%, and console games by 93%.

Consumers grew disillusioned and distrustful.

Nintendo wedged in from a new angle.

Rather than competing on ‘who could build the most impressive tech’ (the battleground that other developers were fixated on), they targeted a new ICP:

Kids

Kids didn’t care about graphics, speed, memory, or processing power.

Nor did parents wanting to play with their kids.

They wanted a toy.

The Nintendo Entertainment System (NES) was exactly that:

• It came with a plastic robot named R.O.B. designed to ‘help’ you play games.

• Ads featured children and parents, rather than teenagers, playing the console.

• Games became more focused on characters and story than score.

2. Content-led development

Nintendo were the first gaming manufacturer to realise:

They didn’t sell tech.

They sold stories.

Most best-selling NES games had:

• Loveable characters with rich personalities

• Immersive worlds and longer story arcs

Super Mario Bros (1985) 

• Timeless cinematic and musical nature

• Longer plot than other games at the time

• Praised for its hidden surprises and discoveries

• Regularly crowned the ‘best video game of all time’

The Legend of Zelda (1987)

• Open-world design, with an epic storyline

• Action-filled adventure, but with a fairy-tale quality

• "Charming graphics, superb original music, excellent animation”

• First NES game to sell over 1 million cartridges in the United States

Teenage Mutant Ninja Turtles (1989)

• Based on animated TV series

• Colourful, cartoon-like, and goofy

• Dialogue-driven, witty, and casual script-writing

• Leveraged an existing universe of characters that fans loved

From Mushroom Kingdom to Hyrule, these weren’t just games; they were experiences that lived beyond the screen, creating a deep emotional connection with players.

3. Kid-friendly → Family-friendly

Nintendo wanted to win the living room, not the basement.

Winning kids with ‘toys’ wasn’t enough.

They needed to win over kids and families to claim the ‘all-ages’ market.

2 ways they did it:

→ Nintendo became the ‘Disney of gaming’, targeting kids but providing something for adults too:

• Tongue-in-cheek humour

• Rite of passage journeys

• Life lessons and morals

Kid-friendly, but with universal appeal.

→ Nintendo became the ‘safe’ choice for parents wanting to play games with their children:

• Cartoon-like violence

• Lack of adult themes

• Few profanities

Even today, with Nintendo expanding to many more mature gaming titles, many of the top 10 best-selling Nintendo Switch games have age ratings of 3+.

Rabbit Hole

The where: 3x high-signal resources to learn more