Case:The Xbox Launch In Korea

Submitted By:

Archit Acharya 1901070

Cindhu F 1901077
Maddamsetti Manideep 1901089
Neeladri Kachari 1901092
Preksha Nahata 1901096
Saurabh Kumar Dwivedi 1901108
TABLE OF CONTENT
01 The Xbox?
The Background

The Key-players?
02 Xbox vs Playstation 2 vs Nintendo

The Gaming Market In Korea?

03 Market Analysis

The Market Research By Microsoft?

04 Methodology

Type Of Gamers?
05 Hard Core vs Serious vs Casual

06 Analysis:
1.Did Microsoft investigate the Korean market correctly? What could have
been done differently?
2. Do the marketing research findings serve the purpose of
the XBox team?
3. Is there any other information that could have been obtained?
 The Xbox?
•Unveiled on Mar. 10, 2000 by Microsoft at the Game Developers’ Conference
•With Xbox, Microsoft is entering the electronic entertainment industry and will compete on both fronts-
Soft ware and Hardware
•It is a high performance, easy to use gaming platform that would be helpful to create better and faster games
•Launched in US market on Nov. 15, 2001
 The console gaming
Market

The console gaming market

•Generates more revenue than the Hollywood

•It generated $9.4 billion in USA and $20 billion worldwide in 2001
•Growth of the industry was found to be 20% in the first half of 2002
•It is expected that the console gaming industry will grow by 40% in USA by 2006
•The main players are console manufacturers, soft ware developers, ancillary equipment
providers
•Three biggest players are Sony, Microsoft and Nintendo in console manufacturing
 Nintendo’s Gametube

Kyoto based veteran company in the console

business, launched their first video console
back in 1980s.

The company recorded revenue of $4.1 billion

and net profit of $802 million in 2002

Nintendo GameCube was a pure gaming

console which means that you couldn’t
connect it with DVD.
Cheapest in its segment priced at $149
 Sony’s playstation 2

Japanese electronics manufacturer was the

Current leader in video game console market

The Company launched its playstation 2 in

Japan, North America and Europe in Oct.
2000

The Playstation 2 was the first of latest

generation of consoles.
It utilised the oldest technology but had
largest soft ware library using its third
party development support
 Microsoft’s Xbox

The newcomer in console gaming business but

built on Microsoft’s expertise in soft ware and
PC technology

It had high-performance, easy-to-use

platform which was better than
Playstation 2 and Nintendo Gamecube

Microsoft supported the Xbox with launch

of Xbox live, the online console gaming
service, to build its Xbox live net work
 The Korean Gaming Market

• Initially the Xbox team focussed on Japanese market only

• But later wanted to expand its market base in Asia thus decided to launch it in Korea on Dec. 23, 2002
• The PC gaming was very strong in Korea but console gaming was almost non-existent
• Korean market presented both risks and opportunities to Microsoft
• A lot of investment was required to market the console gaming business but the silver lining was that the Korean people love
video games
• The household penetration of home PCs was 65% in Korea as compared to 59% in US in 2002
• The size of the Korean gaming market was estimated to be $2.8 billion whereas US market size was $10 billion in 2002
• The console market created only 3.5% of total video gaming market in Korea
• Sony launched PS2 in Korea in late 2001 but had very little success because they thought Korea and Japan were similar market
• 60% of the household were connected to the broadband in Korea which made it one of the most connected country in the world
and thus online gaming dominated other gaming genres

8
 Marketing research by Microsoft

The unavailability of secondary market research report of Korean gaming market made it
compulsory for Microsoft to conduct its in-house market research to understand the
Korean Gaming Market

The market research was focussed on three main aspects of Korean Market:

1. What should be the Golden Portfolio: Which games should be part of Xbox lineup that
would best satisfy the Korean Gamers?

2. Determine the importance of localisation i.e. customisation of games according to the

home market by converting document and in-built dialogues in country’s language

3. Finding the right segment of Gamers

9
Methodology

The research was conducted during June 2002 and had

t wo main parts-
• Focus Groups: For qualitative study The report measured
• Phone Interviews: For quantitative study

•Demographics
•Game Behaviours
•Game Preferences
•Purchase Intent
•Purchasing Behaviour
•Purchasing Barriers
•Brand/Product Awareness
•Product Ownership
•Localisation Attitudes

10
QUALITATIVE STUDY: FOCUS GROUP
GROUPS AGE NUMBER OF PEOPLE TYPE OF GAMERS

• MIX OF HARD CORE AND HARD

CORE/SERIOUS GAMERS
8-10 • MIX OF PC AND CONSOLE GAMING

3 14-26

• MIX OF HARD CORE AND HARD

CORE/SERIOUS GAMERS
8-10 • MIX OF PC AND CONSOLE GAMING

1 14-26
QUANTITAVE STUDY: TELEPHONE INTERVIEWS
SAMPLE AGE

QUALIFICATIONS REQUIRED
83% 10-30
• MINIMUM GAME PLAY OF ONE HOUR/WEEK
• PRIMARY GAMERS IN HOUSEHOLD
• 150 HARD CORE GAMERS(15+ HOURS A WEEK)
• 100 SERIOS GAMERS(4-14 HOURS A WEEK)
• 100 CASUAL GAMERS(0-3 HOURS A WEEK)

17% 10-30
The Three segments of gamers

Predominantly lies in the age gap of 13-17. They are the early adopters and the trendsetters. Spend
Hard Core more than 15 hours per week playing games. Equally enthusiastic about playing at home and at Bang.
On average spends $190 yearly on games. Majority are interested in buying console.Many of them
34% own more than 20+ titles

Serious Predominantly in the age group of 13-24.Majority still in high school. Relies on Hard core gamers for
recommendations of games. Spend more than 12 hours per week playing games. Equally enthusiastic
about playing at home and at Bang. On average spends $123 yearly on games. Few are interested in
37% buying console. Many of them own more than 5+ title.

Casual Predominantly in the age group of 18-29. Majority in college. Relies on others for recommendations of
games. Spend more than 3 hours per week playing games. More enthusiastic about playing at home
than at Bang. On average spends $65 yearly on games. Majority are not interested in buying
29% console.Most of them own more 0 or at least 2 titles
 Research Analysis

Localization
Localisation was important
for the success of the
Korea vs Japan product, although localized
They assumed that people in-game content was not a
big barrier
in Korea will have negative
feelings towards Japanese
products however the
study proved the younger
generation didn’t care
about this
PC Preference
The most important
Less Awareness barrier to purchase was
Console awareness was poor preference towards
among the respondents also computer gaming
64% of the respondents were
not very interested or not at
all interested in buying
gaming consoles
 RESEARCH RECOMMENDATIONS

Target Hard Core Gamers

Because they are early adopters and spend most amount of
money on PC titles

Launch in fall of 2002

With a mix of both English and localised content

Mix of Games
With focus of Strategy, RPG and Action
Games
 Analysing Microsoft’S market research
Did Microsoft investigate the Korean market
correctly? What could have been done
differently?
In the hard core segment, the age group of
gamers was found to be 13-17 yrs that means
they are dependent on their parent’s money thus
parents view about gaming consoles should also
have been taken into consideration
Do the marketing research findings serve the
purpose of the XBox team?
Although, the research is not very thorough but
it gives some insight about the social and
business side of the Korean gaming market to
Microsoft to launch Xbox in Korea
Is there any other information that could have been
obtained?
What was the reason behind such a high % of
household with broadband and PCs? Is it only for
education purpose or gaming too?
In Exhibit 10, it talks about how much time did the
participant spend per visit or sitting to play games at
PC Bang/at home but it did ask how many times in a
week do they go to Bang or how many times do they
sit to play games at home?
Thank You!
Questions?