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0:00Ever wondered how Nintendo makes its billions even
0:03though it doesn't have the most
powerful console on the market.
0:06Nintendo's secret isn't just Mario or
Zelda, it's the business model behind them.
0:10As a business, they are one of the most
profitable game's companies because of
0:14the way they maintain the value of their
products and don't lose money on them.
0:18While rivals often sell hardware at
a loss and hope to make it back on
0:21subscriptions and services,
Nintendo does the opposite.
0:24It aims to profit on the console itself and
then rarely discounts its biggest games.
0:29The new Legend of Zelda game that came out
in 2017. It's the same price it was in 2017.
0:33That's that doesn't happen in almost any
other games business. Maintaining that
0:37value means that they're actually one of the
highest margin game companies you can get.
0:42Nintendo calls this mindset fun over fidelity.
The philosophy that deliberately frees it
0:47from having to compete with Sony and
Microsoft on sheer processing power.
0:52They don't focus on high-fidelity gaming. Nintendo
is not about uh photorealistic 3D graphics,
0:58uh very um very fluid animations
and things of that nature,
1:03but Nintendo is more about fun. Nintendo
is more about casual gaming. And you know,
1:07you don't need to pull out the big
guns in terms of technology for that.
1:11The result, a company that might look smaller
than Sony or Microsoft on a revenue chart,
1:15but one that still manages to post strong
profit margins even in tougher years.
1:21Built for billions. Streaming
now on CNBC.com and YouTube.
