The Current State of Nintendo and Potential Solutions

In 2016, Pavel Alpeyev and Takashi Amano of Bloomberg Technology reported that Nintendo profits have decreased significantly, and this paper will propose potential solutions. Alpeyev and Amano said, “The company has been forced to acknowledge an industrywide shift toward mobile gaming, while Nintendo’s traditional console business, anchored by legendary hits like Super Mario Brothers and Donkey Kong, struggles” (Alpeyev, Amano 2016). Economically speaking, this is saying that the demand for Nintendo video games is currently relatively elastic, so players who are interested in gaming have many substitutes for Nintendo games. Furthermore, Alpeyev and Amano said, “Net income was 29.1 billion yen ($241 million) in the three months to December after Wii U sales dropped 2.1 percent and those of the 3DS handheld player plunged 28 percent” (Alpeyev, Amano, 2016). This sends a message that the supply is relatively inelastic.

Besides that, it is thus that Nintendo is selling their games at a price above what industry substitutes offer. It makes sense to say that Nintendo could benefit from a change in supply that would be a shift in the supply curve thus developing a new market equilibrium. If done, the new equilibrium shall cost Nintendo the opportunity to sell their games at a higher price, but Nintendo would be able to their profits closer to marginal cost. Players would pay less for individual titles but buy a greater total amount of games from Nintendo. The incentives for doing this are Nintendo continuing to sell console games as well as mobile games. The Bible offers insights into the incentives of making a good deal. The Biblical Scriptures say, “Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you” (NIV Lu 6:38). In this writer’s view, Luke wrote that the incentive for good business is, in essence, market equilibrium.

Bibliography

Alpeyev, P., & Amano, T. (2016, February 2). Nintendo Tries to Convince Investors to Wait as Profit Dives. Retrieved May 07, 2016, from http://www.bloomberg.com/news/articles/2016-02-02/nintendo-profit-falls-36-as-lack-of-hits-hurts-holiday-sales