Case Analysis Competition in Video Game Consoles: The State of the Battle for Supremacy in 2008

Wildan Sulistyo Utomo (B090081015) Biztel-8

History of Video Game System      The Development began 1947 The Odyssey video game system introduced in 1972 to US consumers By 1983 consumers tired of simple arcade type game Nintendo introduced NES system in 1985 which sold about 61.9 Million by 1991 Nintendo launch Game Boy which sold nearly 120 million by 2001 .

Overview of The Global Market for Video Game Consoles(1)    In 2008. about 300 million people worldwide played video games on console systems.handheld devices. PCs. and mobile phone Video game enthusiast spent 6 or more hours per week The average American was said to spend 75 hours anually playing video games in 2003 .

9 Billion in 2005 to $5.Overview of The Global Market for Video Game Consoles(2)    The Increase of consumer playing video games because of improved capabilites of game console The lauch of Next-Gen video game consoles.8 Billion by 2010 The growth in video game sales had larger share of US consumers than the motion picture industry .offered unparalled computing power & HD graphics expected global market to increase from $3.

Overview of The Global Market for Video Game Consoles(3)     Technological leadership in computing power and graphics rendering didn¶t guarantee success in the industry A survey by NPD Group found that appealing game titles was the most important feature in choosing a game system Makers of video game consoles also required to collaborate with microprocessor and graphics accelerator products Competition in the industry also mandated that game manufacturers establish relationship with value chain allies .

and digital music player .Changes in Competitive Landscape    Technological console capabilities play important role in future generation of game system Online Gaming users percentage keep increase as the integration of connectivity and broadband access into the video game consoles Mobile Gaming was a fast-developing market segment because advancing technology made it possible to incorporate all features of gaming system into cellular handsets.

‡ High barrier to entry/exit POWER OF SUPPLIER ‡Technology Manufacturer and assembler ‡ Software Developer COMPETITIVE RIVALRY (refer to market structure ) ‡ Gameplay value and user experience ‡ Diferentiated Feature.Industrial Structure (Video Game Console) Patented Hardware & Software Manufacture Regulation & Royalties Entertainment Software Rating Board . Titles and Products THREAT OF SUBSTITUTE ‡ Mobile Gaming ‡ Handheld System THREAT OF TECHNOLOGY: Convergence Technology POWER OF BUYER ‡ Users keep increase ‡ Relatively high switching / upgrade cost .Video Game Rating Council THREAT OF NEW ENTRANCE ‡ Technology & Innovation Intensive ‡ Heavy Investment.

Producers of Video Game Console (Microsoft)      Enter Video Game Industry in 2001 Establish Entertainment and Devices Division Create Xbox Live to let users play online games Use viral marketing campaign stategy Get Early Launch Benefit from Xbox 360 console .

Producers of Video Game Console (Sony)      Launch the first and success gaming console in 1995 In 2001 introduce PlayStation Portable handheld system Launch PS3 in holiday shopping because several production problem Need huge investment for developers to benefit new console capabilities Create Playstation Network for multiplayer online games with introduction on video delivery services .

Producers of Video Game Console (Nintendo)       Founded in 1889 as playing card manufacturer Focussed on earning profits from sale of game consoles & software sales Create several lineup handheld game system Introduced Nintendo Wii with unique type of controller system Has relative low development cost as benefit of low-tech approach Create Wii Connect24 online gaming site .

Going into 2008 Holiday Retail Season    Nintendo Wii had proven to be the early winner by July 2008 Sony & Microsoft had lowered the price to compete against Wii The biggest threat for Nintendo Wii is inability to meet market demand .

Recommendation  Nintendo   Enhance Online game playability and features Defend the position by provide more games both for console & handheld device R&D to explore different type & experience of contoller (to compete with Nintendo) Although has the Entertainment & Device division game developer still need to enhance collaboration with other game makers to provide more games for costumers cost effective process innovation problem free product innovation convince costumer by creating cutting edge graphics enchancement based game that attract them Improve marketing strategy  Microsoft    Sony     .

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