字幕 (102)
0:03Nintendo in the world of video games is
quite known for risk-taking. This kind
0:07of attitude helped them through the
last decades. The company is always
0:11focused on bringing something new to the table.
0:14They are THE video game company. They
don't really look too much at trends.
0:17They tend to lead them. They've had these
incredible ups and incredible downs and
0:22but they never seem to really lose sight
of who they are throughout any of that.
0:25Nintendo is worth tens of billions
of dollars. And some people say it
0:29could be worth a whole lot more. Because
behind Nintendo's huge global success,
0:34cheerful characters, and colorful consoles,
0:37is a company famous for holding back, choosing
control over expansion, and quality over scale.
0:53I'm Arjun Kharpal and I've covered the business
of technology for more than a decade from Silicon
0:57Valley to Shenzhen. And I'm also one of the more
than 3.5 billion people who play video games.
1:03In this episode of Built for
Billions, I explore Nintendo,
1:06a company that turned fun into
a multibillion-dollar business.
1:15Nintendo's story stretches far
beyond the controller in your
1:18hands. The company traces its roots back
to 1889 when it was founded in Kyoto,
1:23Japan. It started out making Hanafuda, a
type of traditional Japanese playing card.
1:29For much of the 20th century, it remained
a family-run, mostly local business. But
1:34from the early 1970s through to the 1980s,
Nintendo began to pivot. First into toys
1:40and then the leap that would change
entertainment forever, video games.
1:47More than a century on from its founding,
Nintendo stands as one of Japan's most influential
1:52global brands, celebrated for combining
craftsmanship with cutting-edge creativity.
1:58I think that Nintendo is uh considered to be
a little bit of a national treasure inside
2:02Japan. It's a very old um company
um even by Japanese standards.
2:07Everybody knows Nintendo. Anyone who's
engaged with games knows what Nintendo
2:11is kind of about. It's family-friendly fun.
2:19From toys to tech titan, Nintendo's
rise has been powered by risk-taking
2:23and reinvention. And the company owes much
of its innovation and creativity to one man,
2:30video game designer, producer,
and director Shigeru Miyamoto.
2:36Nintendo has has Miyamoto to thank for pretty
much all of its success. I would say it's very
2:40much still his design philosophy that
guides Nintendo. Fun over fidelity.
2:45Mario and Link and Pokemon, um, Kirby,
all of those characters are so familiar
2:53and are so rooted in this idea of being
child-friendly and sort of family friendly.
2:58It's really what sets Nintendo apart. And I
think that all of that comes from Miyamoto.
3:02If you speak to any game
developer in the industry,
3:04it's their games that has inspired
what they've gone on to create.
3:07And it's not just players who feel
Miyamoto's influence. His creations
3:12for Nintendo helped to shape
the entire video game industry.
3:15They are often used as a an inspiration both
from a business sense but actually also from a
3:20creative sense. As a business, they are one
of the most profitable um games companies
3:25because of the way they maintain the value of
their products and don't lose money on them.
3:29Over the past 10 years, Nintendo has weathered
dramatic swings in earnings from years of booming
3:34revenue to periods of slump, largely tied to
waves of new consoles, major game releases,
3:40or blockbuster IP launches. Yet, even in the lean
years, Nintendo's profit margins have held steady.
3:48That kind of consistent profitability suggests
that Nintendo is not riding on a single hit
3:52or console, but rather that its brand and
characters are resonating in a deeper way.
3:58Nintendo don't like to lose money on anything. So,
if you look at the PlayStation and Xbox business,
4:03historically, what they would do is they would
sell their consoles at a loss. And the idea is
4:08they would make the money back from the
software and the services afterwards.
4:12Nintendo don't do that. So, that they always
sell things at a profit, including their new
4:16latest hardware. Their games don't drop in price.
That's something that they've maintaining that
4:21value means that they're actually one of the
highest margin game companies you can get.
4:28For the year ending March 2024,
Nintendo earned 1.67 trillion
4:32Yen or around 11 billion US dollars
in revenue with a net profit of 528
4:39billion Yen or $3.5 billion dollars. That
represents an operating margin of 32%.
4:45The following year, as the Switch approached its
end of life, both revenue and profit fell sharply.
4:52Even so, Nintendo's efficiency remained
high, clinging on to a 24% operating margin.
4:59In June 2025, the Switch 2's arrival
bolstered sales and outpaced the
5:05original Switch's launch performance, selling
over 6 million units in its first 7 weeks.
5:11What's interesting about Nintendo
though is that throughout its history,
5:15the same strategy has stuck designing its
most popular games and consoles inhouse.
5:22Nintendo is a very proud company in that
sense that it wants to own the entire
5:27stack. It wants to own video game hardware,
software hardware, uh developer relations,
5:32relations to customers, uh directly and
they don't want to give away that control.
5:38And that strategy pays off. Owning
the full ecosystem means Nintendo
5:42keeps more of every sale, driving
through those high profit margins.
5:46When it comes to performance, Sony and
Microsoft chase powerful consoles and
5:51graphics, but Nintendo focuses on
fun, family, and accessibility.
5:56I think one main driver for for
Nintendo is that they don't focus
6:01on high fidelity gaming. So Nintendo is
not about uh photorealistic 3D graphics,
6:06fluid animations, and things of
that nature. Nintendo is more
6:10about casual gaming. And I think that kind
of approach helps them with their margins.
6:14At its core, Nintendo is making the most
money with just the very traditional video
6:20game business. But in recent years, they
also try to monetize their IP further.
6:24When you think about video games, you
think about the iconic characters and
6:27it's Super Mario and it's The Legend of
Zelda and it's things like Pokemon even
6:31which isn't directly Nintendo and
those all come out from that house.
6:34So these characters like Mario and Pikachu,
they're obviously the Nintendo's main IP
6:39franchises. And because they are so recognizable,
they have a mass appeal. Um, Pokémon was probably
6:46one of the first transmedial franchises to come
out of Japan and sort of take over globally.
6:58It started as a video game, became a manga,
then became an anime, and now is pretty much
7:04everywhere. Um, and the same is now true for Mario
as well. The expansion into um cinema, into films
7:14allows Nintendo to attract a young crowd
who might not be familiar with Mario.
7:23While hardware and game sales
remain the core of the business,
7:26Nintendo's wider ecosystem is rapidly
gaining ground. This includes mobile and
7:31IP related income and other sources
such as merchandise and royalties.
7:36Compare Nintendo's 2024 fiscal year with 2023.
7:41While dedicated platform sales remain consistent,
its secondary streams of income about doubled.
7:47Nintendo is a is a very interesting company
because they have two core audiences.
7:51One is um families, casual gamers.
The other one is an older audience,
7:56people in my age for instance, that have this
nostalgia that is associated with Nintendo.
8:02Nintendo is particularly good at harnessing
the power of nostalgia for everyone. And I
8:06think that sort of really contributes
to sort of Nintendo's holding power,
8:10like it's very tight control
of these of these franchises.
8:13In theory, Nintendo could bring all
of their software, all of their IPs,
8:17all of their characters onto
every platform they want,
8:19PlayStation, Xbox, the PC, mobile devices,
etc., etc, but they don't want to do that.
8:24In my view, Nintendo is not um a company that
is looking in quarters. They think in years,
8:31they think in decades. So Nintendo wants
to be around for a long, long time.
8:37The Switch proved that being different pays off,
but Nintendo wasn't always the disruptor. Next
8:42time, we'll shift gear to the high-stakes games
race of the '90s. We'll explore the console wars
8:48that forced Nintendo to reinvent itself or
risk being left behind by a tech-heavy rival.
