Historical context
Since its founding in 1889 as a playing card manufacturer, Nintendo has consistently operated in the entertainment business. Entertainment is not a daily necessity — demand fluctuates significantly with trends, technology, and social change. Accordingly, the company's performance has never followed a stable growth trajectory; instead, it has swung dramatically depending on the presence or absence of hit products.
The 1960s diversification attempts following the maturation of the playing card business failed to take root. Breakthroughs came through specific products that reshaped entire market structures: the Family Computer in 1983, the Nintendo DS in 2004, the Wii in 2006, and the Nintendo Switch in 2017 — each driving major revenue expansions, while intervening periods of underperforming successors brought revenue declines and even operating losses. This history has formed a fundamental premise: for an entertainment company like Nintendo, setting medium-to-long-term numerical plans or targeting specific financial metrics is inherently ill-suited to the reality of its business.
Management philosophy
The core of Nintendo's management philosophy is not about competing on hardware specifications or achieving technical benchmarks, but about conceiving entertainment experiences that anyone can enjoy. Rather than pursuing higher performance or better specs as ends in themselves, the company has consistently prioritized designing play scenarios that are accessible regardless of age or gaming experience.
This philosophy has been embodied in the Family Computer's low-cost, software-centric design, the Nintendo DS and Wii's intuitive controls, and the Nintendo Switch's integration of play contexts. By refusing to separate hardware from software and instead designing the entire experience as a coherent whole, Nintendo has maintained its fundamental approach to entertainment creation — and this is precisely why it does not set fixed management plans or numerical targets.
Author's Questions
How can a company with such volatile earnings justify having no management plan to shareholders?
Nintendo's entertainment business experiences dramatic performance swings depending on hit products, yet the company intentionally sets no medium-to-long-term numerical plans or specific management metrics. How is this management stance explained to shareholders who prioritize stable growth and plan achievement? What does Nintendo point to, if not plans, as the source of its business sustainability and corporate value?
Why has Nintendo consistently stayed out of the hardware performance race?
In the game console market, competition often centers on processing power and visual fidelity, yet Nintendo has consistently avoided leading with performance specifications. Can this choice be explained solely by development cost and pricing considerations, or is it an inevitable consequence of protecting the 'entertainment for everyone' philosophy? What business risks does the choice not to compete on performance entail?
Why has the software-and-experience-first approach been sustainable over the long term?
Nintendo has designed hardware and software as an integrated whole, treating the total play experience as the source of value. Yet this model is inherently hit-dependent and arguably low in reproducibility. Why, then, has the same philosophy been maintained across generations? What aspects of the organization, development structure, and decision-making process — beyond individual title successes — sustain this management style?