GAME CONSOLES STRATEGIC ANALYSIS

Whenever you started doing business one of the most important things to consider
is your strategy. On how you can provide value and get ahead of your competition. In Sun
Tzu book “the art of war” he clearly stated that to win a war is it all about deception, you
must have a plan, and you create alliances and build yourself up. One of the most growing
industry nowadays is the Gaming Consoles Industry. It shows a significant rise since
the start of the Covid-19 pandemic. According to transperfect.com gaming blog “The
gaming industry outperformed both movies and sport combined last year biggest
moneymaker in entertainment. In fact, on a global scale, the gaming industry was valued
at $162.32 billion in 2020. Based on the current growth rate, it’s expected to reach a value
of almost $300 billion over the next five years. Currently there are 2.8 billion gamers
around the world right now. It is expected to show an increase in the following years to
come.

Having a little background in the current scenario in the gaming industry nowadays,
we must now go through the strategic tools and have a deeper look into gaming top giant’s
Microsoft and Sony in how they strategize their value as a business to their consumer
amidst the Covid-19 pandemic. The Strategic tools that we will see on both the top giants
are its SWOT ANALYSIS, Porter’s Value Chain, The Strategy Canvas, Business Model
Canvas, PESTEL, & Porter’s 5 Forces. These are the tools that I believe we can use to
further identify how these two company able to dominate and further grow the Game
Console Industry.

Microsoft’s Xbox and Sony’s Playstation SWOT Analysis

Playstation SWOT Analysis
Strength
 Exclusive Games – A huge advantage of Playstation is the list of exclusive
games that are only available in their platform. God of War and Uncharted are
one of the many exclusives of Playstation that makes a user buy their console.
There are 143.7 Million Gamers who have played these games alone.
 Targeted by Game developers – Due to its popularity, Playstation is targeted
by big Game Developers such as Ubisoft and Electronic arts. The reason
behind this is because Playstation is the market leader in smooth gameplay.
 Playstation Move Technology – This technology enable Playstation to
pioneer in Virtual Reality Gaming or VR Gaming where Xbox and Nintendo are
behind.
 4k Resolution – They are the first to bring 4k graphics into the console
systems. Xbox is trying to catch up with the impending release of the Xbox X.
 Monthly Plan for Online Services – They provide one of the cheapest value
for their online services.
 Playstation Covid-19 measures – Offers their exclusive games for free and
give donations to Covid-19 support institutions.
 Weaknesses
 Price of Games – Their price of games is much more higher compared to Xbox
and PC games. In fact some users left their consoles to play on a much cheaper
platform, Personal Computer Gaming Setups.
 PC is ahead in technology – In terms of cost and specs, Pc has the
advantage. Most gamers want a budget friendly gaming peripheral.
Opportunities
 Virtual Reality – The virtual reality is a complete setup of gaming world and
social platform for everyone. It was introduced by Oculus Rift from the house
of Facebook.
 Rise in Gaming across the world – Since 2018, it was expected to have a
growth rate of 6.8% in the population of gamers every year.
 More exclusive titles and Subscription movie and games – Exclusive
games helped Playstation to maintain its status in the market by providing new
and more exclusive games and subscription based video platforms such as
Netflix or Amazon Prime. They can maintain their status.
Threats
 Dropping Sales of Consoles – Since 2010, there are significant drop in
Console gaming as new interest rise up such as Mobile gaming.
 Maturing Market - The markets are maturing with most players having one
version or another of Xbox, PlayStation or Nintendo. This is especially true of
the developed markets where the disposable income is high.
 PC Gaming is still strong – PC gaming is preferred by most of the gamers
out there because of its technological and price advantage against consoles.
 Mobile Gaming – Day by day people are becoming lazier, and because of this
people prefer Mobile Gaming than buying a console as they can carry it
whenever they go. An indirect competitor and legit threat to their throne.

Xbox SWOT Analysis

Strength
 2nd Highest market share – Xbox is behind Sony’s Playstation in terms of
console market share. Some thinks that Xbox I better than Playstation though.
 Exclusive games are brilliant – Xbox exclusive games such as Gears of War
and Halo has the most brilliant gameplay ever. Because of the popularity of
these games, people wants to buy Xbox just to play these games.
 Deep Pockets – As Xbox came from the house of Microsoft, it is safe to say
that they can go toe to toe with Playstation for a long time.
 Larger Controller – Xbox controller provides the most comfortable feeling for
most of its users.
 Competitive Pricing – Xbox has consistently sold its console at competitive
pricing. It is priced below the Playstation but above Nintendo.
 Xbox Covid-19 measures – Offers their rewards to its players for them to give
donations to Covid-19 support institutions.
 Weaknesses
 Always behind Playstation Sales – For whatever reason, since time in
memorial, they can’t beat Playstation. They cannot just get over the hump.
 Nintendo Catching Up – Nintendo is a direct competitor of Xbox because of
the Kinect and Wii gaming style. Many of the left over customer of Xbox is taken
over by Nintendo.
 Price of Games is high – Both for Xbox and Playstation, the price of games
is high as compared to desktop/online.
 Frequent Upgrades means loss of customer – Because of frequent
upgrades in hardware, there is a decline in sales of their product.
Opportunities
 Virtual Reality - The number 1 opportunity for Xbox is virtual reality where
Oculus rift from Facebook is coming up fast. Although the controllers of Oculus
rift were initially from Microsoft, Oculus soon started manufacturing its own
controllers which were unique. Virtual reality is the future of gaming and social
interactions and Microsoft needs to catch up soon via the Xbox.
 Online Gaming – Online gaming is catching up in a big way. Even small
developers developed genius games. Xbox should capitalize on this.
 Exclusive Games – The reason why Playstation is ahead of Xbox is because
of games exclusivity. They must improve the quality and amount of their
exclusive games.
 Lowering Price of Games – A strategy which can help Xbox is to lower the
price of its games. It’s a great consideration point for its customer.
 Subscription Services – They can launch a steam like gaming service to
cover some loss in sales and push more game development for their console.
Threats
 Dropping Console Sales – One of the first threat to Xbox is the drop of console
sale. The overall console sale really dropped and besides that Xbox Sale is
50% of Playstation sale.
 Mature Markets - The markets are maturing with people already having an
Xbox or a PlayStation and only repeat customers purchasing the console.
 Constant Competition and Desktop Gaming is cheaper – The market right
now is very dynamic, it is really a continuous development and innovation. Xbox
right now cannot get over Playstation and Nintendo is just right behind them.
Desktop Gaming on the other hand is still a thing now. Many Console users are
starting to switch up to Desktop Gaming.

Summary
We could clearly see from the SWOT Analysis of the two biggest gaming console
company that in order for them to continue to thrive in the market, they focused into the
value they can provide to their customers, they are also consistent in what they are known
about and continue to explore new markets. As of now, Playstation leads the console
gaming who offers balance hardware capacity, exclusive games and game rewards that
makes most of the gamers come back for them. Playstation become really a household
name.
 Microsoft’s Xbox and Sony’s Playstation Porter’s Value Chain Analysis

Value Chain Model

Sony’s Playstation Porter’s Value Chain Model

Inbound Logistics (Primary Activities)
- Involves in receiving, storing & distributing inputs to products/service.
- Warehouse Delivery and Materials Handling.
Operations (Primary Activities)
- Focuses on transforming inputs into final products or services.
- Manufacturing, Product Assembly, & Customer Experience.
- Sony Supply Chain stretches across the entire globe. The Group has its own
electronics manufacturing facilities in Japan, China, South Korea, Singapore,
Thailand, Malaysia, The UK, Mexico, and Brazil. Also, 44% of the suppliers’
manufacturing facilities are located in Japan, while 6% are in the US, 3% are in
Europe, 25% are in China, and the remaining 22% are in the Asia-Pacific region.

Outbound Logistics (Primary Activities)

- Concerned with the collection, storing, distributing of products/services to
customers.
- Retailers and 3rd Party Outlets.

*GameStop, Walmart, Toy R n’ Us, Data Blitz, etc.*

Marketing and Sales (Primary Activities)
- PR, Market Research, Positioning / Branding Strategy, Promotion Strategy (trade
in deals), Managing Relationships (Corporate Partnership).

Service (Primary Activities)

- The Sony Pledge of Quality declares that: “Sony employees will always respect
their customer’s viewpoints in striving to deliver product quality and customer
service that exceed their expectations.”

Warranty
Product Quality and Quality Management

Firm Infrastructure (Supportive Activities)

- Brand, corporate reputation, brand equity, green partner program, & product
quality management.

Human Resource (Supportive Activities)

- Internal Communication, training.

Technology Development (Supportive Activities)

- Software, Research & Development, product diversity CRM, database

Procurement (Supportive Activities)

- Green partners, external suppliers, relationships.
\
Microsoft XBOX Porter’s Value Chain Model
Inbound Logistics (Primary Activities)
- Contracts with different suppliers internationally, the company has complicated
supply-chain operations that is highly maintained without disruptions.
- It includes economies of scale, presence of strategic relationships with suppliers
and in-depth knowledge of supply-chain management practices.

Operations (Primary Activities)

- Microsoft Corporation business is divided into three operating segments: 1.
Productivity and Business Processes (Products and services related to
productivity, communication and information services). 2. Intelligent Cloud
(Operating segment includes public, private and hybrid service products and cloud
services like SQL Server, Windows Server, Visual Studio, System Center, and
related CAL’s and Azure, as well as, Enterprise Services, such as Support
Services and Microsoft Consulting Services). 3. More Personal Computing
(Consists of Products and Services geared towards harmonizing the interests of
end users, developers, and IT professionals across screens of all sizes.)

Outbound Logistics (Primary Activities)

- Microsoft Distribution channel is divided into four: 1. Original Equipment
Manufacturers (Serve as vital distribution channel for Microsoft in pre-installing
the Microsoft software into new devices, OEMs include Acer, ASUS, Dell, Fujitsu,
Lenovo, Samsung, Toshiba and many more). 2. Distributors and Resellers
(Include retail outlets such as Walmart, Dixons, as well as, license solution
partners, web agencies and developers, etc.). 3. Online Sales (Provides Online
Content Services to customers through XBOX live). 4. Microsoft Stores (Cater
customers from over 116 stores worldwide).
Marketing and Sales (Primary Activities)
- Effectively engaged in Viral Marketing Strategy and use of licensing sales method
to decrease the cost of sales to a considerable extent.

Service (Primary Activities)

- Microsoft attempts to maintain the highest level of customer services pre-
purchase, during the purchase and after the purchase. Provides great Customer
service and technical support. Also aims to protect their customer in terms of online
security of their data and accounts.

Firm Infrastructure (Secondary Activities)

- Focused on activities such as quality management, legal matters handling,
accounting, financing, planning and strategic management.
- Great on Overhead Costs that strengthen the competitive positioning of the
company in the market.

Human Resource Management (Secondary Activities)

- Focused on employee motivation, commitment and skills of its workforce.
- Achieve high cost minimization objectives by great analyzation in its hiring and
training costs compared with their relative return.

Technology Development
- Focused on Automation Software, technology-supported customer service
(Chatbot), product design research and data analytics.

Procurement
- Focused on how cost efficiency can be achieved, differentiation basis can be set
or process can be optimized.

Summary
We could clearly see from the Porter’s Value Chain Analysis of the two biggest
gaming console company that in order for them to continue to thrive in the market, they
focus and develop in strengthening their Primary Activities of their company. Also
focusing in improving the value they adding to their services through their secondary
activities. I learned a lot in exploring this tool. I realized that by using this tool, I could have
a deeper look in how the organization I am studying thrive and continue to gain
competitive advantage in their market. It really helps also the organization to further
cement their current SWOT Analysis based on their value chain.
Microsoft’s Xbox, Nintendo Wii, and Sony’s Playstation Strategy Canvas

- A Strategy Canvas is simply a way of visualizing how your competitors attracts

customers, the value they provide to them. This will help you a lot in differentiating
your product/service on your competitors enabling you to determine your
competitive advantage.
- Here is a Strategic Canvas of Nintendo Wii one of the competitors of the two of the
most considered gaming platforms provider Sony and Microsoft.

- In the table above we can clearly see that Sony’s Playstation provide more value
to the customers by dominating the essential factors such as great specification of
the hardware, additional amenities using the Playstation, Customer Support and
the Marketing reach of the product itself. Nowadays, Playstation leads all the
console followed by XBOX then Nintendo.
 Microsoft’s Xbox and Sony’s Playstation Business Model Canvas

- Business Model Canvas provides a wider perspective on the overall structure of a

certain business, its process, product, and revenue stream and target audience.
- It also show the Value Proposition of a certain organization further helping it to
cement its value among its audience and the people around their organization.

Sony’s Business Model Canvas

Microsoft’s Business Model Canvas

 Microsoft’s Xbox and Sony’s Playstation PESTEL Analysis

- PESTEL Analysis provides the firm or the organization two main things: A
comprehensive check on the external factors affecting the organization. And the
opportunities and threats of the organization.
- It clearly help in the overall function of the organization as well in the planning for
the future/planning to avoid the decline stage of the organization.

Playstation PESTEL Analysis

Political Factors
- Playstation has a strong global presence that benefits from political unfaltering
quality in larger piece of the best markets. This include the minimization of political
blocks in the remote or full scale condition, thus demonstrating open entryways for
business improvement. Sony also gets extended authoritative assistance for data
security. Governments nowadays are extending their undertaking for data security
which helps Sony in terms of their online exercises. As an addition Government
also show support in bolstering online business. Sony was able to maximize this
and continue to grow further their market seeing India as their next blossoming
market.

Economic Factors
- Playstation & Sony’s business is driven globally by several economic factors.
There has been an interesting data somewhere in the range of 2007 and 2012.
There has been a business development at just about 33 to 35 for each CAGR
(Compound Annual Growth Rate) driven by the PS2. In the initial 2 hours of the
PS4 dispatch back in 2013, 3s! Was sold. Playstation sales have been multiplied
by ecommerce brands like Amazon, Flipkart, etc.

Social Factors
- More young gamers are understanding that games are increasingly becoming vivid
enabling for profound gaming encounters. Going ahead, the improvement in
graphics and fluidity of games will be the inducing flavor for the populace. For e.g.
crash bandicoot, a Playstation exclusive is a standout of the console. Its versatility
and price become a main factor of its success.

Technological Factors:
- Playstation have a great niche appeal in its market. Despite the emergence of
android phones and other gaming platforms, its technology, and cost make it still
a front runner compare to other devices. Also the mass base (players) has
expanded in the last few years at a speed that PlayStation alone would never had
done.
Environmental Factors
- Chlorine and bromine based fire retardants are not utilized in Playstation support
packaging as some brominated fire retardants in squander materials which convey
a danger of discharging unsafe substances into the earth if inappropriately burned
there is a guarantee to diminish vitality utilization diminishing force utilization.
Hence wiping out the outflows of green-house gases. Playstation has united with
United Nations to battle environmental change and this organization with UN is
assuming a significant job for the improvement of the planet.

Legal Factors:
- The improving patent protection highlights authoritative and intergovernmental
attempts to guarantee licenses. This outside factor presents open entryways for
Sony to build up its business while envisioning insignificant challenges in
guaranteeing its selective information and plans. On the other hand, the growing
rules on e-waste are a hazard similar to the additional undertakings and cost of
lessening the characteristic impact of the association's buyer devices and gaming
things. Regardless, Sony has opportunities to fortify its picture by proactively
improving its things to restrict environmental impact. In association, the extending
thing rule undermines the association by requiring additional utilization for
consistence. Telecom laws material are to social gaming and there can be laws
influencing the gaming business.

XBOX PESTEL Analysis

Political Factors
- Xbox is launched in different various countries across the world and so is subject
to various political conditions prevailing in this areas. Various political factors such
as the US-China trade war in recent times have affected the sale of the product in
those regions. Microsoft to have an upper hand in policies related to gaming
consoles, sometimes bends in favor of the political parties or candidates. A recent
example was when Xbox played a political ad on the consoles for limited days in
limited regions, supporting a particular candidate. This received some negative
feedback from the users and the company decided to let go the ads. The gaming
industry does not face much wrath in the political world. Thus, the company & Xbox
may face changes in political parties causing the cost of the product to increase or
decrease, but overall the product, its process, and manufacturing do not get much
affected, except in places where it is manufactured. In its operating units, all the
political pressures need to face and overcome to keep making and selling the
product. Thus, diplomatic relations are very important in those regions.
Economic Factors
- The changing trends among the youth have somewhat changed these dynamics.
With more people getting involved in playing video games, more value is
associated with the product. The youth is willing to expend the money of these
luxury products and also on future upgrades. Xbox also has the opportunity to sell
various specific add-ons for video games, thus expanding its market and
profitability. The sale of the product depends on disposable income. Higher the
disposable income among the population better will be the sale. It also depends
on the market rate of the various competitive products and services available in
the market. The company also faces loss due to fluctuating rates of the currencies.
If the fluctuations are high, then the profitability also gets affected. Various other
changes in the monetary policies, such as GST or duties, will increase or decrease
the cost of Xbox, thus affecting the sales directly.

Social Factors
- The youth today is very dynamic. This is the reason why trends are changing at an
exponential rate. If Xbox wants to stay in business, it needs to update its products
to keep creating value for the money the customer is willing to pay. The company
needs to keep a tab on what its competitors are doing to gain an advantage over
the existing products, to stay ahead of the market. Various social and cultural
factors also play a part in the sales of the products. This needs to be kept in mind
when marketing in countries that are very stringent with its rules and regulations.
The sale of Xbox games that may be prohibited in these countries will further attract
lawsuits, which needs to be avoided. Demographics using the games need to be
considered. According to various data, approximately 51% of women are involved
in casual gaming and people over the age of 35 are major players compared to
young people. Another data suggests that people play games more with their
family and friends, thus the games must be designed accordingly. Focusing on all
these points is of utmost importance to the company, to stay profitable and ahead
in its game.

Technological Factors
- The gaming industry is expanding at an exponential rate and technological
changes will have a profound effect on the sales of the products. There is a high
pressure created by other players like the PlayStation. With high amounts of
money invested by Microsoft in continuous research and development of Xbox, the
company seems to have an upper hand so far. The company has quickly utilized
cloud-based technology and saved huge amounts of money in the past few years.
It has tried to stay ahead of the game with the launch of a motion-sensing game
that will keep the entertainment and health of the player, both in focus. By providing
hands-free games and eradicating even the wireless controller the company can
achieve a major feat. The use of AI and virtual reality that the company should
focus on.
Environmental Factors
- Microsoft and Xbox believes in accelerating global progress to a more
sustainable future. The company has undertaken certain, goals that it wishes to
accomplish. One of them is to reduce their carbon emissions by 75% by 2030.
The company is doing so through carbon neutrality and the use of various
renewable energy sources. Microsoft is on its way to meet the goals set by the
Paris climate agreement by 2030. The various cloud-based programs used have
reduced the resource consumption by 20% along with a reduction in the
electricity bill, which was again a benefit to the company. With all major
developed and developing countries around the world, supporting the cause of a
sustainable future, the company has various opportunities, to work and support
these initiatives, taken up by the different countries.
- The company has also been working towards preserving the forest areas on the
Mount Rainier, along with saving the orangutans in Indonesia. Xbox and the
parent company has established the largest solar park in Virginia, USA, that
generates enough electricity to power up about 100 million led lights. With these
strategies in place, the company has been utilizing its resources appropriately to
identify new areas of development and create a more sustainable environment.

Legal Factors
- Xbox has managed to capture a significant area of the market and has further
plans of expanding its reach. To do so, Xbox needs to stay updated with all the
international patents and copyrights existing in the region it is willing to enter.
Since gaming is a segment where any small part of the game is similar to others
may also classify as infringement, the company needs to be careful about all its
products. Since the company has a large number of employees working, there is
a high chance of data leak or software leak that may affect the company on a
massive scale. Antitrust and various lawsuits and violations are what the
company may face if it fails to comply with the legal requirements associated with
its operations and products. Xbox also needs to follow the various labor laws and
act accordingly. The company also needs to take care of the various anti-bribery
laws that are in place in various countries of its operations. In case any of these
are violated, the costs associated with compliance will be huge. The removal of
any sort of contamination in the system and any changes to the operations
mandated by new or amended laws may be significant.
 Microsoft’s Xbox and Sony’s Playstation Porter’s 5 Forces

- Porter’s 5 Forces is used to determine the competitive forces and opposition of the
organization or the firm. A much more comprehensive check on the threats and
opportunities present to a firm.
- It also helps the firm to discover it profitability and its profit potential itself.

Playstation and XBOX Porter’s 5 Forces

Threat of New Entrants
- In terms of Cost advantage, Consoles has the upper hand making the new entrants
suffer from high production cost making them a much weaker force. Product
Differentiation is also strong within the industry, where industry sell differentiated
products rather than a standardized product. Strong emphasis on advertising and
customer service also puts the larger industry away from the new entrants. The
cost of Capital and Research & Development, Government policies in favor of
larger industries further cement the advantage of Sony to the new entrants in the
market.
- Playstation and XBOX can take advantage of this and focus on innovation of its
products. Spend more on advertising further cementing its strong brand
identification.

Bargaining Power of Suppliers

- The number of suppliers in the industry in which Consoles operates is a lot
compared to the buyers. This means that the suppliers have less control over
pieces and this makes the bargaining power of suppliers a weak force.
- The product that these suppliers provide are fairly standardized, less differentiated
and have low switching costs. Thus making it easy for Consoles to switch
suppliers, making the power of suppliers a much weaker force.
- Suppliers do not provide credible threat for forward integration into the industry in
which Consoles operates also the profits of the industry and the industry are
closely tied meaning they need to provide a more reasonable pricing making their
bargaining power a much weaker force.
- Playstation and XBOX can take advantage of this by purchasing raw materials at
low costs, can have multiple suppliers to make them compete for them and also
develop relationship to these suppliers to further dominate the market.

Bargaining Power of Buyers

- The number of suppliers in the industry in which Consoles operates is a lot more
than the number of firms producing the products. This means that the buyers have
a few firms to choose from, and therefore, do not have much control over prices.
This makes the bargaining power of buyers a weaker force within the industry.
- The product differentiation within the industry is high, which means that the buyers
are not able to find alternative firms producing a particular product. This difficulty
in switching makes the bargaining power of buyers a weaker force within the
industry.
- The income of the buyers within the industry is low. This means that there is
pressure to purchase at low prices, making the buyers more price sensitive. This
makes the buying power of buyers a weaker force within the industry.
- The quality of the products is important to the buyers, and these buyers make
frequent purchases. This means that the buyers in the industry are less price
sensitive. This makes the bargaining power of buyers a weaker force within the
industry.
- There is no significant threat to the buyers to integrate backwards. This makes the
bargaining threat of buyers a weaker force within the industry.
- Playstation and XBOX can take advantage of this and focus on innovation and
differentiation to attract more buyers. Focus their marketing efforts in building
brand loyalty and attract more large number of buyers.

Threat of Substitute Products or Services

- There are very few substitutes available for the products that are produced in the
industry in which consoles operates. The very few substitutes that are available
are also produced by low profit earning industries. This means that there is no
ceiling on the maximum profit that firms can earn in the industry in which consoles
operates. All of these factors make the threat of substitute products a weaker force
within the industry.
- The very few substitutes available are of high quality but are way more expensive.
Comparatively, firms producing within the industry in which consoles operates sell
at a lower price than substitutes, with adequate quality. This means that buyers
are less likely to switch to substitute products. This means that the threat of
substitute products is weak within the industry.
- Playstation and XBOX can focus in providing what the buyer wants, offer their
products in a lower cost with much more greater quality.

Rivalry among Existing Firms (Playstation)

- The number of competitors in the industry in which Playstation operates are very
few. Most of these are also large in size. This means that firms in the industry will
not make moves without being unnoticed. This makes the rivalry among existing
firms a weaker force within the industry.
- The very few competitors have a large market share. This means that these will
engage in competitive actions to gain position and become market leaders. This
makes the rivalry among existing firms a stronger force within the industry.
- The industry in which Playstation is growing every year and is expected to continue
to do this for a few years ahead. A positive Industry growth means that competitors
are less likely to engage in completive actions because they do not need to capture
market share from each other. This makes the rivalry among existing firms a
weaker force within the industry.
- The fixed costs are high within the industry in which Playstation operates. This
makes the companies within the industry to push to full capacity. This also means
these companies to reduce their prices when demand slackens. This makes the
rivalry among existing firms a stronger force within the industry.
 - The products produced within the industry in which Playstation operates are highly
differentiated. As a result, it is difficult for competing firms to win the customers of
each other because of each of their products in unique. This makes the rivalry
among existing firms a weaker force within the industry.
- The production of products within the industry requires an increase in capacity by
large increments. This makes the industry prone to disruptions in the supply-
demand balance, often leading to overproduction. Overproduction means that
companies have to cut down prices to ensure that its products sell. This makes the
rivalry among existing firms a stronger force within the industry.
- The exit barriers within the industry are particularly high due to high investment
required in capital and assets to operate. The exit barriers are also high due to
government regulations and restrictions. This makes firms within the industry
reluctant to leave the business, and these continue to produce even at low profits.
This makes the rivalry among existing firms a stronger force within the industry.
- The strategies of the firms within the industry are diverse, which means they are
unique to each other in terms of strategy. This results in them running head-on into
each other regarding strategy. This makes the rivalry among existing firms a strong
force within the industry.
- Playstation needs to focus in differentiating its products on its competition to make
their customer stay in seeking their unique products. They can also focus in
winning new demographic of customers to expand their market. Have a deeper
understanding on the supply-demand of their product, to avoid over production.

Rivalry among Existing Firms (XBOX)

- The number of competitors in the industry in which Xbox operates are very few.
Most of these are also large in size. This means that firms in the industry will not
make moves without being unnoticed. This makes the rivalry among existing firms
a weaker force within the industry.
- The very few competitors have a large market share. This means that these will
engage in competitive actions to gain position and become market leaders. This
makes the rivalry among existing firms a stronger force within the industry.
- The industry in which Xbox is growing every year and is expected to continue to
do this for a few years ahead. A positive Industry growth means that competitors
are less likely to engage in completive actions because they do not need to capture
market share from each other. This makes the rivalry among existing firms a
weaker force within the industry.
- The fixed costs are high within the industry in which Xbox operates. This makes
the companies within the industry to push to full capacity. This also means these
companies to reduce their prices when demand slackens. This makes the rivalry
among existing firms a stronger force within the industry.
- The products produced within the industry in which Xbox operates are highly
differentiated. As a result, it is difficult for competing firms to win the customers of
each other because of each of their products in unique. This makes the rivalry
among existing firms a weaker force within the industry.
- The production of products within the industry requires an increase in capacity by
large increments. This makes the industry prone to disruptions in the supply-
 demand balance, often leading to overproduction. Overproduction means that
companies have to cut down prices to ensure that its products sell. This makes the
rivalry among existing firms a stronger force within the industry.
- The exit barriers within the industry are particularly high due to high investment
required in capital and assets to operate. The exit barriers are also high due to
government regulations and restrictions. This makes firms within the industry
reluctant to leave the business, and these continue to produce even at low profits.
This makes the rivalry among existing firms a stronger force within the industry.
- The strategies of the firms within the industry are diverse, which means they are
unique to each other in terms of strategy. This results in them running head-on into
each other regarding strategy. This makes the rivalry among existing firms a strong
force within the industry.

CONCLUSION/TAKEAWAYS
- Through researching on the strategic tools used by the successful companies in
the gaming industry, I have learned two things that we must consider as a
businessman or business person in terms of brand building and stabilizing our idea
into the industry itself. First we must have the birds-eye view of the business. We
must use tools like the SWOT Analysis, Strategy Canvas and Business Model
Canvas to have the overall view in terms of the product advantage in terms of its
competitor, the opportunities it presents, the production process, the value it
shares to customers and how can it continue to dominate the process. Second
thing we must consider is the specifics in our business which tools like the Porter’s
Value Chain, PESTEL Analysis, and Porter’s 5 Forces can provide in the business.
Focusing on external threats and opportunities. The advantage in the industry
compared to the key partners and rivals in the industries as well on how they
integrate the value they want to provide into the Primary activities of the
organization. It has been a great journey learning from these tools and I hope I can
apply this in my business idea/business venture I want to go into to further help me
to achieve success in it. Strategy is a must, like in the book of Sun Tzu, the art of
war. “If you know the enemy and know yourself, you need not fear the result of the
hundred battles”. Idea is not enough, there are other factors too. We must be
prepared, the tools we must utilize must come from A to Z. It’s not only a money’s
battle or a physical battle but also a mental and spiritual battle and the one who
stays standing at the end wins.
Sources:
-https://strategiccoffee.chriscfox.com/2009/06/essential-strategy-analysis-tools.html
-https://suntzusaid.com/
-https://www.cnbc.com/2020/11/20/microsoft-sony-nintendo-how-video-game-console-
industry-is-changing.html
-https://www.transperfect.com/blog/global-gaming-industry-growth-in-
2021#:~:text=The%20gaming%20industry%20outperformed%20both,over%20the%20n
ext%20five%20years.
-https://newzoo.com/insights/articles/newzoos-games-trends-to-watch-in-2021/
-https://www.marketing91.com/swot-analysis-of-xbox/
-https://www.marketing91.com/swot-analysis-playstation/
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1.png
https://issuu.com/benfaucherfolie/docs/michael_20and_20dee_20value_20chain_8426f
105192468
https://strategiccoffee.chriscfox.com/2013/03/how-to-use-porters-value-chain-
analysis.html
https://www.sony.com/en/SonyInfo/csr/library/reports/sis4ug000000jyws-
att/CSR2017E_PDF_all_e.pdf
https://research-methodology.net/microsoft-value-chain-analysis-2-2/
https://www.essay48.com/value-chain-analysis/13772-Xbox-Value-Chain-Analysis
https://strategiccoffee.chriscfox.com/2012/10/how-to-use-strategy-canvas.html
https://image.slidesharecdn.com/sdd-bmc-session-120906102821-phpapp01/95/slide-
25-1024.jpg
https://0901.static.prezi.com/preview/v2/6jn47dqbtwu2nribqpy4w643z36jc3sachvcdoaiz
ecfr3dnitcq_3_0.png
https://www.garyfox.co/wp-content/uploads/2020/06/Microsoft-Business-Model-Canvas-
1024x673.png
https://strategiccoffee.chriscfox.com/2015/05/how-to-use-business-model-canvas.html
https://www.essay48.com/term-paper/13749-Playstation-Porter-Five-Forces
https://www.essay48.com/term-paper/13772-Xbox-Porter-Five-Forces
https://strategiccoffee.chriscfox.com/2010/04/porters-5-forces-analysis.html