Examining the structure and ownership in the media sector, I have selected to look at Nintendo Co., Ltd.
Ltd: a limited company which is incorporated; meaning it has its own legal identity in the eyes of the law. This allows the owners of having limited liability, or not personally responsible for any incurring debts due to parts of the business being sold to shareholders.
Ownership and Structure
Funded by Fusajiro Yamauchi in 1889, “Nintendo” (roughly translating to leave luck to heaven) was originally as a shop called “Nintendo Koppai” (‘Koppai’ meaning playing cards) which sold “Hanafuda” (flower cards). With the Japanese banning playing cards Yamauchi was very successful and expanded by opening another store. Nintendo has gone into various ventures, such as starting cab services and love hotels in the 1960s before turning to what they are known for today: games (in the 1970s).
Now, Nintendo operates world wide with Tatsumi Kimishima as president and CEO of the main branch though it is a subsidiary to other branch companies such as companies that focus on both software and hardware. They also have many second-party development partners.
As a Ltd with shareholders, Nintendo has also come to have a board of directions with Satoru Iwata – the Representative Director – holding 670 shares, the largest amongst the other shareholders.
Nintendo also – as of 2014 – had to full-time Auditors, who should keep track of all of Nintendo’s assets.
Below are a few examples:
- Nintendo Network Service Database (NSD), founded in 2009 and was originally known as “Wii no Ma”. It was created to provided for digital entertainment as a service for Wii owners but now it handles all operations for Nintendo Network.
- Nintendo Entertainment Planning & Development (Nintendo EPD) was founded just last year in 2015 and is already the already the largest division. Their first title being ‘The Legend of Zelda: Tri Force Heroes”. EPD also oversees a lot of Nintendo’s second-party developers.
- Intelligent Systems, founded in 1986 game developer company affiliated with Nintendo. IT began when Tohru Narihiro started to work for Nintendo to port the Famicom Disk System to the typical ROM-cartridge that was used outside of Japan on the Nintendo Entertainment system (NES). It built to a team which provided technical support until Narihiro programmed his first video games: “Famicom Wars” and “Fire Emblem: Shadow Dragon and the Blade of Light”. Due to his success the company expanded where it still makes software and hardware to this day.
Due to its large number of subsidiaries and being a developer of not just hardware development and other support services, as well as making its own software; examples of different aspects of the industries, I would say that it shows both vertical and horizontal integration.
The business industry is separated into three sections: the primary sector which focuses on raw materials, like a farmer who harvests. The secondary sector is manufacturing and the tertiary is for sales and services.
From what I have already said about Nintendo, it is clear from its products and business that it is both in the secondary sector of manufacturing, with developing its own consoles such as the latest WII and 3DS as well as games. As well as tertiary as it has a department that is dedicated to helping customers with any errors they may have, such as their customer service number (0345 605 0247) being just one way to contact them.
Nintendo’s biggest competition would probably be Sony, with the PlayStation and Microsoft, with the Xbox. Both have very a large audience though a completely different market. Generally, PlayStation and Xbox is marketed more to the male sex while Nintendo is more exclusive, if only because they are a “family company” however they are also seen to have a younger target audience, though that could be because of the hesitance for very violent, over sexualised or explicit games which has come to change in recent years, “Virtues Last Reward” and the newest “Fire Emblem” titles being a good indication in them expanding their depth of field.
Nintendo’s processing power for tehcnology is still weaker, with graphics being fairly fairly low and near all of their games cel-shaded or pixel art which would alienate quite a bit of their market.
The Effects Of The Structure And Ownership Of The Business
Nintendo has a total of 27 consolidated subsidiaries and have roughly five associates, such as: The Pokémon Company, WARPSTAR, Inc., and PUX Corporation to name a few.
Obviously, ownership is very important in a business, especially one as big as Nintendo is. For example, a former Nintendo president – Hiroshi Yamauchi (who brought the company into the video game industry ) was of the belief that explicit games would damage the companies’ image and would not allow one of their products to feature any sort of profanity, graphic imagery or adult content such as: sexuality, nudity, domestic violence of drugs.
However, in 1994 – 2003 ESRB and PEGI ratings were introduced Satoru Iwata (the companies’ fourth president) abolished quite a few of these principles, allowing customers the choice in what they would like to play, with what sort of content, opening up potential for a larger audience.
Organisational Structure Changes And Implications
As I have mentioned above, Nintendo has grown from a single store to a huge umbrella company so a organisational structure – a hierarchy, determining how roles and responsibilities are shared and controlled and how information will travel between management – is important for a business such as Nintendo.
Despite this Nintendo has been criticised for the way it is structured; saying it is too slow and that the people with the finally say are out of touch, with being in the business fro so long (to read more, click here).
In saying that, just last year Nintendo merged both the “Research and Development Division” as well as the “System Development Division” into “Platform Technology Development Division” which will be responsible for for hardware and tool development.
The “Entertainment Analysis and Development Division” and the “Software Planning and Development Division” became one called the “Entertainment Planning and Development Division” which will make games for Nintendo consoles as well as smart phones.
Nintendo also went onto make an entirely new department called “Business Development Division” which will work on the companies’ business model as well as handling Nintendo’s smart phone business.
All changes which could positively affect the company, made into affect as Tatsumi Kimishima became Nintendo’s fifth president.
What Makes Global Companies Powerful
Nintendo being originally founded in Japan made it so there would already be some difficulty with breaking out into western countries due to cultural and/ or ethical differences, by breaking both into the European and the American market both with only small bouts of controversy.
Although looked down by other games’ companies, Nintendo has one of the largest of its type in the world with global revenue of over 5.5. billion U.S dollars in 2014, with 2.1 billion dollars of this coming from the Americans.
Being so successful means more than revenue. Nintendo has a lot of influence. Especially among young people who are their demographic.
Does their Globalisation limit Choice/ Diversity For The Consumer.
Initially, yes. Nintendo is – or was – very stuck in their ways for trying to be as far reaching as possible with its clean image, however for a lot of the Western market Nintendo’s deliberate censorship wouldn’t have been appealing and it is often cited as one of the reasons why they are trailing behind Sony and Microsoft.
They did not like to make political statements or have explicit or adult content in the products. The Disney of the gaming history. However (like I talked about in the “The Effects Of The Structure And Ownership Of The Business”), Nintendo isn’t as strict about their content as they used to be, which has opened up a brand new market for them.
For example, one of Nintendo’s newest titles for one of their most popular series’: “Fire Emblem: Fates” features the choice for the avatar to be gay, and also shows a diverse cast with another character appealing to be bisexual and another to be either gender fluid or transexual, to name a few examples. Nintendo still has a long way to go but it is an encouraging step to be more inclusive.