They're not playing games!

They’re not playing games!

When it comes to maximising the value of IP - there are businesses that do well, and there are those which excel.

Today, I want to highlight a company whose IP has placed them at the top table - and that offsets their weaknesses.

Today I am talking about Nintendo.

World 1-1

First thing's first, some orientation.

From the Famicom (or NES/Nintendo Entertainment System) to the current generation Nintendo Switch... The brand has been at the centre of the video game space from inception to the present day.

Some estimates suggest that the gaming industry is now worth $300 billion. Home consoles are split three ways (broadly between Microsoft, Sony and Nintendo). Nintendo is now the "longest-standing" operator in the space.

This is also somewhat counterintuitive! During the "console wars", processing and graphics were key battlegrounds. Nintendo walked a different path.

This approach was most seen in its Nintendo Wii. This console focused on simple motion games - rather than intensive gaming experiences.

But what is it that keeps people coming back to Nintendo? On paper, they don't really seem to be competing with their competitors?

IP playing its part

I won't overplay the role of IPs in Nintendo's success.

There are a host of other factors which come into play.

Simply put - Nintendo is one of the most innovative design-driven companies out there. They operate on a philosophy of "fun-first" when it comes to the design of their games.

This emphasis on fun means that it really doesn't matter how good something looks. After all, games should be fun first and foremost, right?

That being said - there is another important factor, their franchises and characters.

The Disney of video games

In my view, Nintendo is essentially the Disney of video games.

They have a cast of familiar characters who have been there from "day 1". Moreover, the games they feature in keep Nintendo fans coming back time and time again.

Whether it’s Mario, The Legend of Zelda, Metroid or Pokémon, people connect with these games on a more meaningful level, creating a relationship that Nintendo can capitalise on.

The comparison to Disney is apt in my opinion. Legacy characters like Mario, Link and Pikachu have become the video game equivalents of Mickey Mouse, Ariel and Donald Duck.

This has led to films and even theme park attractions built around these characters' fictional worlds.

But with great IP comes great responsibility, and Nintendo is no stranger when it comes to enforcement.

In fact, many see them as quite heavy-handed.

Heavy-handed?

The first thing that can be said about Nintendo is that they are in the top-tier when it comes to enforcing their IP.

In fact, it seems rare that Nintendo is not in the IP news, recent examples include:

These examples only include high profile cases that pinged on our radar so far this year. It is also not an exhaustive list!

Many view Nintendo's enforcement as punitive to their fans. It seems to come at the expense of enthusiasts who make fan games (or other creative outputs) in homage.

Whether you believe Nintendo's approach is right or wrong, is ultimately down to you.

What can be learned from Nintendo

Regardless, what can be learned from Nintendo?

Strict enforcement of Nintendo's IPs means the company and its products retain a rarified air around them. Disney and Lego are similar.

This allows Nintendo to enforce a "quality control" around their IP driven experiences. It also helps them have total control over how they deploy brands that people pay a premium for.

With nostalgia driving a generational interest in these characters - Nintendo has both:

A unique gravity that attracts customers, and;
"staying power" through their cornerstone appeal

Strong enforcement means nobody else can come close to emulating Nintendo's unique brand magnetism.

The Nintendo Switch, an incredible success, is half as powerful as the latest generation machines. It is also much cheaper to produce but sells at a premium. That is the power of IP.

Whilst most businesses won't have a cast of characters that they can use to attract business...

The same can be said for strong-style enforcement of brands and big ideas which make you unique.

Whilst a "zero-tolerance" style of enforcement may seem overkill... Maintaining uncompromising uniqueness can help you become a "category of one".

When you're a category of one, people are unable to go anywhere else to get what you provide.

And who wouldn't like that?

As always, get in touch if there's anything I can help you with.

Always happy to help,

Have a fantastic week,