Nintendo’s Technological Adaptation and Sustainable Competitive Advantage: The Switch Changed the Future of the Game Industry and Nintendo’s Strategy

This study examines how Nintendo responded to technological change and restructured its competitive position in the home video game market through the lens of Dynamic Capabilities (DC) theory. Focusing on three major developments—the success of the Wii, the failure of the Wii U, and the return to growth with the Nintendo Switch—it analyzes how the company applied DC by recognizing market trends, acting on new technological opportunities, and adapting its internal organization. Building on the theoretical work of (Teece et al. 1997) and (Eisenhardt and Martin 2000), the study shows that experimentation, learning from past setbacks, and organizational adjustment are key to maintaining long-term resilience. The development of the Switch illustrates how Nintendo applied lessons from earlier challenges to better align hardware and software development and unify its platform strategy. Conversely, the Wii U case shows the limitations of DC, where misalignments in sensing, seizing, and transforming led to commercial failure. The study also situates Nintendo’s strategic transformation within broader shifts in the global video game industry, including the rise of mobile gaming and the globalization of supply chains. By including both positive and negative outcomes, this research broadens the relevance of DC theory in content-driven, high-tech sectors and contributes to ongoing discussions on how firms adapt and renew themselves in fast-changing markets.