1. Introduction

Nintendo is one of the world most influential gaming companies. Since its founding in 1889, it has continuously innovated and played a significant role in shaping the video game industry. Nintendo’s games are well sold and its interactive entertainment industry flourished through its exclusive intellectual properties (IPs) such as Mario, The Legend of Zelda, and Pokémon[1]. Nintendo's consoles are also widely popular, it has sold over 140 million units till 2023, making it one of the best-selling gaming consoles in history.

Although Sony and Microsoft dominate in raw hardware performance, Nintendo remains highly competitive because of its unique gaming experiences, strong IP portfolio, and innovative hardware. Unlike its competitors, which mainly focus on high-performance gaming for hardcore players. Nintendo targets family entertainment and casual-to-midcore gamers[2], emphasizing unique gameplay experiences and leveraging its classic brands to attract global audiences.

When choosing a gaming console, consumers typically consider several key factors, including price, IP exclusivity, hardware performance, third-party support, storage expansion, and backward compatibility.

Existing studies have examined Nintendo’s competitive strategies from various perspectives. It has been analyzed how the company builds brand loyalty through long-term IP management [3] and highlighted the importance of exclusive games. Others have explored its competition with Sony and Microsoft, finding that while Nintendo excels in innovation and unique gaming experiences, it lags in hardware performance. Additionally, research on consumer purchase decisions has identified IP influence, pricing, and portability as the most critical factors shaping consumer preferences.

Although previous studies mainly focused on industry competition, Nintendo's intellectual property value or isolated factors, they lacked systematic and comprehensive research on consumer preferences and Nintendo's marketing strategies, especially in aspects such as intellectual property management, emotional connection, and multi-channel marketing.

Thus, this study aims to examine how Nintendo strengthens its brand through IP management, emotional connection, and multi-channel marketing. It will also analyze Nintendo’s strengths and weaknesses in IP and hardware compared to Sony and Microsoft, exploring how Nintendo compensates for its hardware limitations through emotional branding and marketing, and predict potential innovations in IP management, emotional engagement, and hardware strategy. The findings will offer insights into market strategy and brand management while providing strategic references for other gaming companies.

2. Literature review

Intellectual property (IP) helps to promote scientific and technological progress and economic development, and its value is reflected in enhancing the market competitiveness of enterprises, monetizing science and technology, and is also the main driving force for enterprise innovation[4]. In the context of globalization, IP management faces challenges such as how to balance innovation and protection, incentives and restrictions. The principle of balance of interests emphasizes the coordination of individual and public interests in the management of intellectual property, so as to achieve the balance between the creation, dissemination and use of intellectual products. Therefore, IP management can be combined with the marketing strategy of the enterprise to enhance the competitiveness of the enterprise. In this part, based on the IP management theory illustrated above, the author reviews the different strategies of Nintendo, SONY and Microsoft in IP management. with their marketing strategy. The common point is that all these three companies focus on their IPs to maintain competitive advantages in the fierce markets, but they adopt different methods[5]. Microsoft and SONY have managed to gain a foothold in the market through, for example, patent litigation. Nintendo has successfully established a unique brand image in the market through market positioning and product differentiation strategy[5].

Hardware innovation plays a crucial role in the gaming industry, about how hardware innovation increase competitiveness, there are two channels: technology-driven development and optimization of users experience. Nintendo, SONY and Microsoft, as the three large game console manufacturers in the world, have each adopted a unique hardware strategy. Nintendo’s hardware innovation focuses on motion-sensing game, which is to attract more nontraditional game players through the combination of game and sports. Therefore, its hardware innovation is for new functions[6]. SONY focuses on technological innovation and has always been a leader in processor, storage and display technology to provide players with a higher quality gaming experience[7]. Microsoft regards hardware innovation as the foundation of its subscription function. With gaming subscription services such as Xbox Game Pass, Microsoft has lowered the hardware barrier for players and attracted more users. Although they have various emphases, they have the same goal of satisfying consumers’ demands and adapting to the marketing tendencies.

Emotional connection is an important driving force for brand loyalty, and consumers’ emotional attachment to brands can significantly enhance brand loyalty. Emotional connection enables consumers to have a sense of belonging and strong identification with the brand, and this attachment to the brand enhances loyalty, which is reflected in repeated purchase behavior and word-of-mouth communication[8]. Through a deep understanding of consumers’ emotional needs, Nintendo creates positive emotional experiences for consumers through well-designed products and services that enable consumers to generate satisfaction in interactions. This experience not only satisfies the deep needs of consumers, but also enhances brand loyalty.

The theoretical basis of multi-channel marketing mainly involves channel diversification, channel differentiation and channel integration. Nintendo mainly adopts channel differentiation strategy and adopts different channel strategies for different customer groups. Nintendo’s differentiation communication through home video game platforms, portable game consoles and global social platforms enhances the brand’s social nature and user engagement[5]. SONY adopts the channel integration based on online channel and offline channel, which contributes to the consumers experiences and consumer loyalty cultivation[9]. Channel diversification sells products through various types of channel combinations, which not only changes the channel mix structure of enterprises, but also affects the relationship and interaction between enterprises and channel partners. This is also the channel strategy adopted by Microsoft, because Microsoft has inherent advantages in platform construction, based on platform advantages, Microsoft’s channel diversification strategy can achieve efficient interaction with consumers.

The gaming industry is experiencing both technological innovation and industry trends that are driving it to become more efficient, immersive and diverse. For example, AI technology can greatly improve the quality of game content, reduce the burden of human creation, and, in terms of marketing, AI technology also improves the efficiency of enterprises and players[10]. In addition, big data analysis helps to extract the real needs of players from a large number of user feedback data, which is conducive to the iteration and update of the game. Blockchain technology offers the game industry a new copyright protection scheme through its decentralized and immutable properties, significantly enhancing the security and transparency of game assets[9]. As a result, emerging technologies such as artificial intelligence, virtual reality, and blockchain are profoundly changing the way games are developed, designed, and operated.

3. Comparative analysis of Nintendo, Sony, and Microsoft in IP and hardware

3.1. Advantages of Nintendo in terms of IP and hardware

3.1.1. Exclusive IP with long-term value and diversity

Nintendo’s intellectual properties (IPs) are cultural phenomena with multi-decade legacies. This paper focuses on Mario and Pokémon as case studies. Since the release of the first game in the Mario series, Super Mario Bros., in 1985, the Mario franchise has surpassed 700 million copies sold globally across all titles as of 2024, including 67.35 million copies of Mario Kart 8 Deluxe (2017) and 29.04 million copies of Super Mario Odyssey (2017). As of 2024, the Pokémon series has also achieved significant success, with Pokémon Sword/Pokémon Shield (2019) selling over 24 million copies on the Switch. Released in November 2022, Pokémon Scarlet/Pokémon Violet has sold 26.38 million copies.

Figure 1: Nintendo exclusive IPs

In addition to the Mario and Pokémon franchises, Nintendo strategically bundles flagship games with hardware launches to drive sales. The Legend of Zelda: Breath of the Wild and Animal Crossing: New Horizons serve as key examples. As of 2024, The Legend of Zelda: Breath of the Wild (2017) has sold 32.62 million copies, contributing to the console’s record-breaking 132 million unit sales. Another exclusive IP, Animal Crossing: New Horizons (2020), has sold 47.44 million copies by 2024.

3.1.2. Hardware innovation redefining accessibility and play

Figure 2: Nintendo gaming system, 2024

Note: Adapted from Nintendo Online store, 2025 ( https://www.nintendo.com/us/switch/).

The Nintendo Switch, since its launch in 2017, has redefined gaming accessibility and gameplay diversity with its innovative hardware design. By merging home and portable gaming systems, the Switch’s hybrid architecture, featuring detachable Joy-Con controllers and a 6.2-inch touchscreen, revolutionized the market. The Joy-Con controllers introduced new interaction methods, supporting motion-sensing, HD rumble, and independent control, further enhancing its appeal for social play. The Switch’s design also caters to different gaming environments, from home entertainment to on-the-go experiences. The portable mode makes it ideal for travel and commutes, while the TV mode supports local multiplayer gaming with friends and family. Its detachable Joy-Con controllers enable shared play, fostering social interactions. Additionally, the device’s long battery life and fast-charging capabilities ensure that players can enjoy extended gaming sessions without interruption.

3.2. Advantages of Sony in terms of IP and hardware

3.2.1. Sony’s exclusive IPs with long-term value and diversity

Sony’s success is built on a rich portfolio of exclusive franchises that drive console sales and foster loyalty. Blockbuster series like God of War, The Last of Us, Uncharted, and Marvel’s Spider-Man span genres from action-adventure to story-driven drama, giving PlayStation a diverse game library. These franchises have multiple installments over generations, maintaining strong sales and fan engagement.

Figure 3: Exclusive franchises of Sony (left: The Last of Us; Right: God of War )

Note: Adapted from Sony Playstation website, 2025 (https://www.playstation.com/en-us/ps5/games)

For example, God of War – 2005 debut; 66 million sold across the franchise (2018’s reboot alone hit 23M+). Marvel’s Spider-Man – 2018 debut; 33 million+ sold across Insomniac’s Spider-Man titles. Uncharted – 2007 debut; 41.7 million+ sold, defining the cinematic action genre on PlayStation.

Sony’s IP lineup covers a broad spectrum, which attracts a wide audience. Critically acclaimed exclusives build PlayStation’s reputation and give players unique reasons to choose Sony over competitors. These franchises also create brand loyalty, as PlayStation owners often stay in the ecosystem to continue with beloved series. Surveys indicate PlayStation fans are the most brand-loyal in gaming, with about 40% identifying as loyal to PlayStation, higher than Xbox’s 31% or Nintendo’s 30%.

3.2.2. Sony’s hardware innovation and advantages

Figure 4: PlayStation^®5 console

Note: Adapted from Sony PlayStation website, 2025 (https://direct.playstation.com/en-us/buy-consoles/playstation5-console-model-group-slim?smcid=pdc:us-en:web-pdc-ps5:buttonblock-buy-now)

Sony’s PlayStation 5 is a technical powerhouse packed with innovative features. The console boasts a custom 7nm AMD Zen 2 8-core CPU and an RDNA 2 GPU rated at 10.3 TFLOPs, paired with 16 GB of GDDR6 RAM. Sony engineered a custom ultra-fast SSD (825 GB) that exceeds typical console storage speeds – 5.5 GB/s raw throughput, over twice as fast as the Xbox’s SSD. The DualSense controller is a major evolution of the gamepad, introducing adaptive triggers and advanced haptic feedback. These adaptive triggers can change resistance on the fly to mimic in-game actions – for instance, drawing a bowstring or pulling a trigger in-game makes the L2/R2 buttons stiffen or vibrate to convey tension. The controller’s refined haptic motors produce nuanced vibrations (from feeling raindrops to the rumble of an explosion) far beyond the old DualShock rumble. Early demonstrations like Astro’s Playroom showcased these features and earned praise for making gameplay more immersive. This kind of tactile feedback is unique to PlayStation – neither Nintendo’s Joy-Cons (HD rumble but no trigger resistance) nor Microsoft’s Xbox controllers (which still use rumble motors and have no adaptive triggers) offer a similar experience. In addition, the PS5 hardware includes a dedicated 3D audio chip (the Tempest Engine) that enables spatial surround sound over headphones or TV audio. This means games can render immersive audio – you can hear precisely where a sound comes from in a 3D space, enhancing realism. Both the DualSense haptics and 3D audio contribute to a greater sense of presence in games, which Sony has leaned into as a selling point.

3.3. Advantages of Microsoft in terms of IP and hardware

3.3.1. Exclusive IPs and hardware innovation

Recent high-profile acquisitions have further diversified Microsoft’s IP lineup. The 2021 purchase of ZeniMax (Bethesda) added RPG giants like The Elder Scrolls and Fallout to Xbox’s stable – The Elder Scrolls V: Skyrim alone has sold over 60 million copies as of 2023. In 2023, Microsoft completed its acquisition of Activision Blizzard, gaining mega-franchises such as Call of Duty (which has 500 million lifetime unit sales across its series) and Diablo. These deals give Xbox ownership of numerous “billion-dollar franchises” and decades of content history. Microsoft’s strategy emphasizes the accessibility of its IP. The Xbox Game Pass subscription service has become a linchpin in expanding the reach and engagement of these franchises. All Xbox Game Studios titles launch on Game Pass day one, dramatically lowering the barrier for players to try new exclusives. As of early 2022, Game Pass had over 25 million subscribers (with estimates of ~34 million by 2024), indicating a large captive audience for Microsoft’s IP.

Figure 5: Xbox Game Pass service

Note: Adapted from Microsoft Xbox website (https://www.xbox.com/en-US/xbox-game-pass).

3.3.2. Hardware innovation

Microsoft’s current-gen consoles – the Xbox Series X and Series S – showcase the company’s strengths in hardware design and ecosystem integration. The Xbox Series X is a powerhouse console, featuring a custom 8-core AMD Zen 2 CPU (3.8 GHz) and an RDNA 2 GPU rated at 12.15 TFLOPs, paired with 16 GB GDDR6 RAM. In raw graphics performance, it has a slight edge over the PlayStation 5. The companion Series S model, while less powerful (4 TFLOPs GPU), is targeted at 1080p/1440p gaming. Microsoft has also differentiated its hardware through backward compatibility and ecosystem integration, areas of notable strength. The Xbox Series X/S can play a vast library of older games natively, spanning four generations of consoles. In addition, the Xbox hardware ecosystem is tightly integrated with Windows PCs. Another forward-looking advantage is Microsoft’s embrace of cloud gaming. With Xbox Cloud Gaming (xCloud), players can stream their Xbox games from the cloud, which extends the reach of the hardware beyond the physical console.

Figure 6: Xbox consoles

Note: Adapted from Maicrosoft Xbox website, 2025.(https://www.xbox.com/en-US/consoles).

3.4. Competitive summary

In conclusion, in terms of intellectual properties, Nintendo is known for its exclusive IPs like Mario, Pokémon, and Animal Crossing, which provide a unique value proposition for its user base. Sony's strength lies in cross-media collaborations, such as tie-ins with HBO productions like The Last of Us. Meanwhile, Microsoft's focus on third-party IPs includes popular franchises. These variations reflect the strategic positioning of each brand in attracting diverse consumer segments. Another core element, hardware performance, is crucial for determining the quality of the gaming experience. Nintendo's innovative hardware, exemplified by the hybrid design of the Switch with detachable Joy-Con controllers and long battery life, has redefined gaming accessibility and social play. Nintendo prioritizes portability with its hybrid designs supporting 720p/1080p resolutions, appealing to gamers who value mobility. Sony is famous for its PS5, which is equipped with an ultra-fast SSD. Other advanced hardware includes an adaptive DualSense controller and immersive 3D audio technology. Similarly, Microsoft's Xbox Series X architecture emphasizes high performance, utilizing Direct Storage technology for faster load times, catering to hardcore gamers. Competitor analysis shows that different brands have different advantages in terms of IP and hardware, therefore, it is necessary to study factors such as IP and hardware for consumers' choices and find out whether customers are sensitive to these elements.

4. Methodology

4.1. Participants

This study adopted a random sampling method and collected respondents through the dimension of competitor analysis. It is feasible to distribute questionnaires via the internet when conducting conjoint analysis. This survey was accessible from 9 March 2025 to 15 March 2025. There were a total of about 111 combined attributes about Nintendo preference.

4.2. Conjoint design

Table 1 presents the attributes of gaming consoles. This study considered six attributes: IP Type (exclusive IP, cross-media IP, User-generated content, Family-friendly IPs), Hardware Performance (mid-range performance, probability-first, portable + TV Model, Hybrid design + TV Model), Third-Party Support (limited, indie-focused, indie games + classic remasters), Storage Expansion (internal storage only, 64GB internal + cartridge expansion), Backward Compatibility (Switch only, no support for older games), and Price ($199 to $349 for Nintendo). A total of 6 attributes were considered in this study.

Table 1: Attributes of Nintendo

The first attribute, IP Type, refers to the intellectual properties associated with Nintendo console's brand. Nintendo is renowned for its exclusive IPs like Mario and Pokémon (Level 1), Zelda and Animal Crossing (Level 2), and Animal Crossing and Kirby (Level 4). Additionally, cross-media IPs include Super Mario Bros. movie tie-ins (Level 3). User-generated content thrives in communities such as the Mario Maker Community (Level 5). Family-friendly IPs, like Super Smash Bros., play a significant role (Level 6).

Second, Hardware Performance is crucial for determining the gaming experience quality. Nintendo emphasizes portability through mid-range performance, offering portable-first designs (Level 3) and hybrid designs complemented by long battery life (Level 4). The portability-first approach (Level 2) is crucial, alongside hybrid designs that offer TV Mode (Level 5) and motion controls (Level 6).

Third, Third-Party Support significantly influences consumers' console choice. While Nintendo provides limited third-party support, it focuses on indie games (Level 2). There is a strong emphasis on indie-focused offerings (Level 3), along with classic remasters (Level 4).

Fourth, Storage Expansion options are an essential consideration for consumers planning to build extensive game libraries. Options range from internal storage only (64GB supports SD card) (Level 2) to internal storage of 32GB relying on cartridges (Level 3), and 64GB internal with cartridge expansion (Level 4).

Fifth, Backward Compatibility can play a pivotal role in purchasing decisions, especially for existing fans of a brand's previous consoles. Nintendo provides backward compatibility exclusively with Switch games, but some of its machines so not support for older games. Support is primarily available for Switch games only (Level 2).

Lastly, Price is a critical factor affecting consumers' purchasing decisions. Nintendo offers an affordable price range between $199 and $349, appealing to budget-conscious consumers seeking versatile gaming experiences.

4.3. Hypothesis

Hypothesis 1 Price Reduction is Positively Associated with Increased Consumer Preference for Nintendo Consoles.

When prices are reduced, gaming consoles become more accessible to a broader audience. This change can potentially increase consumer demand and preference[11]. Economic theories suggest that as the price of a product falls, it becomes more attractive to consumers. This is true especially for those who are price-sensitive or working within a fixed budget[12]. In fact, empirical studies echo this idea. For example, Nagle and Müller highlight how strategic pricing can significantly boost market penetration and consumer loyalty in competitive markets[12]. So, by lowering console prices, Nintendo could enhance its appeal among cost-conscious consumers. As a result, this strategy may boost sales and market share[13].

Hypothesis 2 Exclusive IP Type Enhances Brand Loyalty Among Nintendo's Consumer Base.

Exclusive intellectual properties (IP) are important for building consumer loyalty by offering unique experiences not found on other platforms. This approach fits with marketing ideas that show the need for differentiation to keep customers engaged and maintain brand equity[14]. When brands use exclusive content well, they can create strong emotional connections with consumers, which leads to higher retention rates[15]. So, when interactive features include different IPs, consumers form deeper relationships with brands[16]. For example, Nintendo's focus on exclusive IPs like Mario and Pokémon boosts its brand loyalty, strengthening consumer affinity[17].

Hypothesis 3 Hardware Performance Plays a Minimal Role in Consumer Decision-Making for Nintendo Consoles.

While hardware performance is critical for some gaming segments, Nintendo's focus on innovative gameplay often supersedes raw technical specifications. This observation is consistent with theories that say consumer satisfaction is not only about hardware specs but also about the overall gaming experience[11]. Norman argues that user-centric design and innovation contribute more to consumer satisfaction than technical prowess alone[18]. So, despite less emphasis on hardware performance, Nintendo can keep strong consumer interest through innovation and design[17].

Hypothesis 4 Limited Third-Party Support Negatively Impacts Nintendo’s Market Competitiveness.

Exclusive titles are strong, but limited third-party support can limit a console's game library. This may reduce its appeal to a wider audience. This idea is connected to industry analyses that show diverse game offerings are key to attracting different consumer segments[19]. Consoles with many third-party titles often capture larger market shares because they satisfy a wide range of gaming preferences[11]. So, increasing third-party support could boost Nintendo's competitiveness by expanding its game portfolio[20].

Hypothesis 5 Enhanced Storage Expansion Options Increase Nintendo Console Appeal to Hardcore Gamers.

Gamers with extensive libraries need proper storage solutions, so expandable storage is a key feature for consoles targeting serious players. Wang says that offering flexible storage options can boost user experience and satisfaction, especially for those who spend heavily on digital game purchases[16]. Rogers notes that inadequate storage can limit users, preventing them from buying more content[21]. So, by providing better storage expansion options, Nintendo could attract this segment of the gaming community[21].

Hypothesis 6 Backward Compatibility Positively Influences Consumer Purchase Decisions for Nintendo Consoles.

Backward compatibility lets consumers access their existing game libraries on new consoles. It adds significant value and reduces transition costs. This idea is backed by consumer behavior theories. These theories highlight convenience and perceived value as key factors in purchase decisions[22]. Kotler and Keller say that backward compatibility not only boosts consumer satisfaction but also builds brand loyalty by preserving past investments[22]. So, enhancing backward compatibility could positively influence consumer decisions. It allows seamless transitions between console generations[22].

4.4. Statical analysis and results

The conjoint analysis, employing an orthogonal design, was conducted using Excel to assess consumer preferences across multiple Nintendo gaming console attributes. A total of 111 stimuli were generated by Excel, evaluated using the regression analysis.

Table 2 ANOVA table indicates that the model is statistically significant (F(6, 653) = 12.475449, p < 0.05), demonstrating that at least one of the predictors is significantly related to consumer preferences.

Table 2: ANOVA

Table 3 presents the coefficients derived from the regression analysis:

A regression analysis is conducted to determine the relationship between the independent and dependent variables. The model was specified as follows:

\( Consumer preference= {β_{0}}+ {β_{1}}*price+{β_{2}}*IP Type+{β_{3}}*Hardware Performance+{β_{4}}*Storage Expansion+{β_{5}}*Backwoard Compatibility+ε \)

The intercept value is 2.0330582, significant at p < 0.0001, which represents the baseline level of preference when all other attributes are at zero.

Price: The coefficient for price is -0.003615, significant at p < 0.05, suggesting that as the price increases, consumer preference decreases. It is aligned with our hypothesis 1.

IP Type (A1): The coefficient is 0.0301557, indicating a positive relationship, though it is not statistically significant (p = 0.311924), so this rejects our hypothesis 2.

Hardware Performance (A2): With a coefficient of 0.0130777, this attribute shows a positive but insignificant effect on consumer preference (p = 0.386701), so it is aligned with our hypothesis 3.

Third-party Support (A3): Exhibits a negative coefficient of -0.183496, significant at p < 0.05, implying that more third-party support negatively affects preference, thus supporting our hypothesis 4.

Storage Expansion (A4): This factor has a negative coefficient of -0.0407083, insignificant at p > 0.05, indicating that increased storage options reduce preference. However, it rejects hypothesis 5.

Backward Compatibility (A5): Displays a negative coefficient of -0.243762, significant at p = 0.0020031, showing that backward compatibility decreases consumer preference, but it is not aligned with our hypothesis 6.

Table 3: Correlation

From the regression analysis conducted to determine the relationship between the independent and dependent variables above, the model was finally specified as follows:

\( Consumer preference=2.033-0.003*price-0.183*Third party Support-0.244*Backwoard Compatibility \)

The findings from our conjoint analysis provide several key insights that are particularly relevant for decision-making by Nintendo. In summary, the results indicate that among the various attributes considered, price has the most significant impact on consumer preferences, whereas other factors such as third-party support (A3), and backward compatibility (A5) exhibit notable negative effects on consumer preference, and the factors such as IP type, hardware performance and storage expansion, which are the seemingly important ones, are not relevant to the consumer preference.

According to the results shown in Table 4, the analysis of consumer preferences for Nintendo consoles highlights several key insights that can guide strategic decision-making. Price emerges as the most influential factor (p = 5.475E-09 < 0.05), underscoring the importance of competitive pricing strategies to enhance market appeal. The hypothesis that reduced prices increase consumer preference is strongly supported by both empirical data and theoretical frameworks. Offering cost-effective options without compromising the essential features might appeal to a broader consumer base, especially those who weigh price heavily in their purchasing decisions.

Exclusive IP types do not have significant influences on consumer purchase decisions for Nintendo Consoles because of the insignificant coefficient (p = 0.312). This may be because Nintendo is known for its exclusive IPs like Mario, Pokémon, and Animal Crossing, which provide a unique value proposition for their user base, while Sony's strength lies in cross-media collaborations, such as tie-ins with HBO productions like "The Last of Us." which are more favored by the teenagers nowadays.

Hardware performance (p = 0.381 > 0.05) and enhanced storage options (p = 0.122 > 0.05) appear to have a minimal impact on consumer choices, indicating that innovation and user experience are more critical drivers of satisfaction than technical specifications alone. This indicates that while these factors might be important for brand identity and positioning, they are not the primary drivers of consumer decision-making within the current market context. It may be beneficial for Nintendo to consider these findings and reallocate resources towards enhancing attributes with higher consumer sensitivity.

Conversely, the limited third-party support (p = 0.001 < 0.05) is a challenge to Nintendo’s market competitiveness, as indicated by the negative coefficient of -0.183. This may be because of Nintendo’ main competitor in the relevant market. While Nintendo focuses on its exclusive indie game offerings, Sony emerges as the more favored brand based on our conjoint analysis questionnaire results. Sony benefits from comprehensive third-party support, including Japanese game exclusives. Therefore, it is suggested that Nintendo expand this aspect. By making improvements inspired by Sony's approach but applying them to Nintendo’s own games, Nintendo could attract a broader audience with a more diverse game library.

Finally, backward compatibility (p = 0.002 < 0.05) proves to be a positive influence on purchase decisions, although the current one may have negative impact (coefficients = -0.244) on the Nintendo’s current market, but making improvements on this part can give much positive return to Nintendo. Nintendo provides backward compatibility exclusively with Switch games. However, Sony supports PS4 games and some PS3 titles through cloud gaming, allowing consumers to transition seamlessly between console generations and maintain access to their existing game libraries.

5. Brand strategy

With the analysis of user preferences on these supports(A3), expansion of storage (A4),and backward competibility(A5), a targeted marketing strategy opts for Nitendo. Using brand strategy had made, it focused on the weaknesses of the areas at matches while keeping in mind the strengths of Nitendo's IP management, emotional connection, and innovative gameplay. Furthermore, the strategy incorporates innovations that aligns with Nitendo's brand identity as a petition. Brand strategy is a systematic plan formulated by enterprises to create a unique brand image, establish brand awareness and loyalty, and achieve long-term competitive advantages in the market. It centers around target users and is based on an in-depth analysis of the market environment, competitors, and the enterprise's own strengths.

In the case of Nintendo, by deeply exploring user preferences, it customizes game content using classic intellectual properties (IPs), builds interactive communities, and strengthens emotional connections. In terms of expanding product storage space, it combines technological upgrades with interesting designs and launches special packages. By leveraging promotion, technical optimization, and value-added services, it gives full play to the advantage of backward compatibility.

Nintendo comprehensively plans its brand development path, enhances brand value, meets user needs, and consolidates its leading position in the gaming market.

5.1. IP management

One of the biggest gaps in support of Nintendo in its competition with Sony and Microsoft lies in third-party support to build IP. However, it should be noted that Nintendo's strength is in its exclusive IPs, which have long been the source of consumer loyalty. In order to fill this hole, Nintendo might select to reconstruct its connections to outsider engineers, particularly from the independent gaming area[2]. Nintendo can, therefore, grow its game library by focusing on indie games according to its brand values centered around creativity and its trademark of family-friendly content. To attract people who are not devoted to gaming in general, Nintendo should also consider venturing into deals with other developers to have third-party exclusive games for its platform.

5.2. Brand emotional connection

Nintendo attaches great importance to establishing a deep emotional connection with players. By building an official game community, it encourages players to share their gaming experiences and creative gameplay ideas, thereby enhancing the interaction among players as well as between players and the brand. Therefore, due to the low significance of storage expansion to casual gamers and the fact that Nintendo's games tend to be smaller, high-end storage is not in line with Nintendo's affordability focus. Also, although Nintendo can make better use of players' additional storage needs and easier, more economical storage solutions, they can improve the user experience[6]. Moreover, Nintendo could make bundled packs with microscopic SD cards available at a reduced cost or bring in a better-designed cloud storage system for game saves download so that the storage factor doesn't defile the gaming experience.

Nintendo regularly organizes community activities, such as game - creation competitions, which enable players to participate in game content creation and enhance their sense of belonging. In terms of promotion and publicity, Nintendo is adept at leveraging nostalgic elements. By looking back on the development experiences of classic games and demonstrating old-game play on new consoles, Nintendo evokes emotional resonance among players, thus establishing a long-term emotional bond between players and the brand.

Nintendo has been able to monetize its older titles via remasters and deluxe editions, and despite the lack of backward compatibility, Nintendo has not been hindered in its sale of the hardware [5]. However, to stay on course, Nintendo should reconsider this strategy by enabling backward compatibility for digital titles so players can keep playing their older titles on newer consoles. Moreover, unlike Microsoft does with Game Pass, Nintendo can consider a subscription model for classic games from its old consoles. It would provide consumers with a wider variety of content in one bundle, enabling them to access it without purchasing games.

5.3. Innovative gameplay

Furthermore, Nintendo can adopt some other innovations to distinguish and attract more consumers in the market and solve the gaps found in third-party support, storage expansion, and backward compatibility.

Cloud Gaming allows consumers to stream high-performance games on the Cloud without needing high-priced hardware upgrades. So, with cloud gaming, Nintendo can utilize its affordable console strategy with access to more graphically demanding titles and increase its third-party support[23]. This would also enable Nintendo to extend its reach to markets where people might be unable to afford high-end console options.

6. Discussion

6.1. Limitations in questionnaire design and implications for conjoint analysis

A key limitation of this study arises from a design flaw in the questionnaire, particularly regarding the operationalization of variables A1 and A2 in the context of conjoint analysis. A1 was intended to quantify the influence of Nintendo’s intellectual property (IP) on consumer demand, while A2 aimed to assess consumer preferences for different Nintendo hardware configurations. However, due to an oversight in survey construction, both variables were formulated using subjective or non-quantifiable measures, making the collected data unsuitable for conjoint analysis, which relies on systematically varying product attributes to derive consumer preference structures. As a result, the dataset lacks the consistency and objectivity necessary for robust statistical analysis and valid part-worth estimation.

This limitation has had a notable impact on our hypothesis, which posited a strong positive correlation between Nintendo’s IP strength and consumer demand. The inability to incorporate A1 and A2 into the conjoint analysis model led to inconsistencies in the results, ultimately deviating from our initial expectations. Specifically, without a standardized approach to defining the levels and attributes associated with Nintendo’s IP and hardware preferences, the study was unable to accurately estimate their relative importance or interaction effects.

To mitigate this issue in future research, it is imperative to refine the questionnaire design by ensuring that all key variables are properly operationalized within the conjoint framework. This includes defining clear and quantifiable attribute levels for Nintendo’s IP—such as brand strength indicators, licensing breadth, or perceived exclusivity—and establishing structured variations for hardware configurations based on distinct and measurable product features. Implementing these refinements will enable more precise estimation of consumer preferences, improve the reliability of statistical modeling, and enhance the validity of findings in subsequent studies[24,25].

6.2. The impact of price on consumer preferences

The results of the regression analysis demonstrate that price exerts a statistically significant negative effect on consumer preferences. Specifically, as price increases, consumer preference scores exhibit a significant decline. The p-value further substantiates the robustness of this relationship, suggesting that the observed effect is highly unlikely to be attributable to random variation. The negative coefficient (-0.003615) indicates that each unit increase in price corresponds to an approximate 0.0036-unit decrease in consumer preference scores. While the magnitude of this effect appears relatively small, it holds substantial significance in the context of consumer decision-making, wherein price sensitivity plays a pivotal role. This finding is consistent with classical economic theories of demand, reinforcing the principle that higher prices diminish consumer willingness to purchase[26,27].

6.3. The impact of third-party support, storage expansion, and backward compatibility on consumer preference

After conducting a conjoint analysis, we found that third-party support, storage expansion, and backward compatibility are negatively correlated with consumers' willingness to choose a Nintendo console. This means enhancing these features on a Nintendo console actually won’t increase consumer interest. The possible explanations for this phenomenon are about Nintendo’s product strategy, brand positioning, and its unique user base. The following analysis examines Nintendo’s current situation about the factors and the comparison among Nintendo, Sony and Microsoft.

6.3.1. Third-party support

Nintendo’s game ecosystem is centered around first-party IPs such as The Legend of Zelda, Super Mario, and Pokémon, which own a lot of strong brand appeal[28]. Because its third-party game support is really weak, the third-party games, like GTA V and Cyberpunk 2077, perform poorly on Nintendo platforms or are unavailable[29]. Due to hardware limitations, many third-party games rely on cloud streaming (Resident Evil 7, Assassin’s Creed Odyssey), which can provide a suboptimal experience.

The reason why it is negatively correlated is that Nintendo users primarily buy consoles for first-party games, so the demand for third-party games is lower than for PlayStation or Xbox users. If Nintendo increase third-party support, it might necessitate more powerful hardware, leading to higher costs and potentially higher prices, which could deter sectional consumers.

Table 4: Third-party support comparison

Obviously, Nintendo lags behind Sony and Microsoft in terms of third-party support. Sony and Microsoft’s powerful hardware offer a friendly developing environment. This allows third-party game developers to fully unleash their creativity to produce high-quality games. They actively collaborate with third-party game developers to attract more games to their consoles. This partnership allows players to experience a diverse range of games on their platforms.

6.3.2. Storage expansion

Switch has limited internal storage (32GB for the base model, 64GB for the OLED version), requiring additional storage for larger game libraries. Its storage expansion is limited to microSD cards, which are slower than high-performance SSDs. But the microSD is relatively inexpensive and has thousands of choice. Because its affordable and accessible, Nintendo choosed it as their strategic design facing the limitation.

Actually, storage expansion has little impact on most Nintendo’s game experience because Nintendo games are generally small in size. Zelda: Tears of the Kingdom is only 16GB, compared to the data of AAA titles that exceeds 100GB. Most consumers accept microSD as a better solution, who reduced the need for more advanced and expensive expansion options[30]. Therefore, if Nintendo introduced high-end storage expansion, it might increase hardware complexity and costs, making the console less attractive.

Table 5: Storage expansion comparison

In terms of storage expansion, Nintendo, Sony, and Microsoft have significantly different strategies, mainly in compatibility, price, and user freedom. Nintendo’s storage expansion option is the most affordable but also the slowest in terms of speed. Regarding user freedom, Nintendo and Sony have an advantage as they provide a wide range of options. While, Microsoft lacks market competitiveness.

6.3.3. Backward compatibility

Switch is not backward compatible with Wii U or 3DS games and users must rely on digital versions or remastered editions. It prefers to release remastered or deluxe editions, like The Legend of Zelda: Ocarina of Time, Super Mario 3D All-Stars, rather than enable full backward compatibility[31].

Nintendo players are used to repurchasing older games rather than relying on backward compatibility. For example, Mario Kart 8 Deluxe sold exceptionally well on Switch, despite the Wii U version already existing. Usually, remastered or deluxe editions provide better experiences, so consumers are more willing to buy them instead of using older versions. If backward compatibility were enhanced, it may reduce new game sales[32] which would hurt Nintendo’s business model.

Table 6: Backward compatibility comparison

In terms of backward compatibility, Microsoft offers the strongest support. The Xbox Series X|S is compatible with Xbox One, Xbox 360, and select original Xbox games. Additionally, it enhances older games through technologies such as FPS Boost and Auto HDR, which allows players to use their old discs or digital versions without repurchasing them[33]. In comparison, Sony’s backward compatibility is primarily focused on the PS4. The PS5 can run most PS4 games and supports upgrades for some titles. However, for PS3, PS2, and PS1 games, players must rely on the PlayStation Plus subscription service, as physical game support is limited. While, Nintendo offers almost no backward compatibility for physical games.

7. Conclusion

This study has explored the profound impact of Nintendo’s exclusive intellectual properties (IPs) on its branding strategies, highlighting how the company leverages its unique franchises to maintain a competitive edge in the gaming industry. The findings indicate that Nintendo’s focus on emotional engagement, innovative hardware, and strategic market positioning allows it to differentiate itself from competitors such as Sony and Microsoft, despite facing challenges in raw hardware performance and third-party support.

One of the key takeaways is that the attributes considered to promote consumer preference, namely IP and hardware, were not actually found to have a strong correlation to consumer preference in this study. On the contrary, the study surprisingly identifies limitations in Nintendo’s market approach. Regression analysis results reveal that third-party support negatively impacts consumer preferences (p < 0.001), suggesting that a limited game library may restrict market competitiveness. Similarly, backward compatibility and storage expansion exhibit statistically significant negative coefficients, indicating areas where Nintendo’s current strategy may hinder broader adoption. These findings underscore the importance of expanding third-party partnerships and enhancing hardware capabilities to cater to evolving consumer expectations.

Additionally, according to our survey results, Nintendo's most primary competitor is Sony. In fact, a significant number of respondents indicated that they were drawn to Sony's offerings, ultimately choosing to purchase its products. This outcome leads to further consideration, as Sony's competitive advantage appears to stem from key factors our survey includes.

Firstly, as hypothesis 4 mentions, a crucial advantage that Sony holds over Nintendo is its strong third-party support. While Nintendo has historically struggled with third-party partnerships, relying heavily on its first-party titles to drive sales, Sony has cultivated deep collaborations with numerous third-party developers and publishers. This robust third-party ecosystem further strengthens Sony's market position, ensuring that its console is the preferred choice for a wider array of gamers seeking both first-party and third-party experiences.

Secondly, according to hypothesis 6, Sony's approach to backward compatibility represents another distinct competitive advantage. Unlike Nintendo, which has frequently opted to remaster or re-release older titles rather than provide direct backward compatibility, Sony has integrated backward compatibility into its ecosystem, allowing players to access a vast library of previous-generation games through subscription services such as PlayStation Plus.

Meanwhile, although the survey results do not show a clear correlation, it’s often believed that IP and hardware are also important attributes that determine consumer preferences. Sony prioritizes mature, narrative-driven IPs that evolve over time, alongside hardware advancements that continually push the boundaries of gaming experiences. In this way, Sony has made the games they produce faster in pace and denser in excitement, aligning them more closely with people’s expectations of games in today’s fast-paced society: quick to get started, highly playable, and deeply immersive.

From a strategic perspective, the study suggests that Nintendo should select to reconstruct its connections to outsider engineers, particularly from the independent gaming area to attract a wider player base. Additionally, although high-end storage is not in line with Nintendo's affordability focus, Nintendo could still make bundled packs with microscopic SD cards available at a reduced cost or bring in a better-designed cloud storage system for game saves download to improve user experience. Furthermore, despite the fact that Nintendo has not been hindered in its sale of the hardware as a consequence of its lack of backward compatibility, Nintendo should still reconsider this strategy by enabling backward compatibility for digital titles to enable players to keep playing their older titles on newer consoles. Last but not least, to distinguish and attract more consumers in the market, Nintendo could also employ new strategies like cloud-gaming toextend its reach to markets where people might be unable to afford high-end console options.