* Not very attractive; home video game market ended in 1983 because of the saturation of low quality games developed by third party game developers for the Atari System. The games were uninspiring or unattractive. * Domino effect: software houses collapsed because they had to reduce the price of their games, making the market price for games even lower for other software houses that soon collapsed due to profitability issues. * Caused Atari to sell their consoles ten times lower, 40:4. * Nintendo when entering the market had to sell the consoles at below cost, $249 ($557) * Positioning to the 6 forces:
* Approach for designing in-house games was to focus resources on developing one or two hits games per year, rather than a large number of lesser successes. * Authentication Chip “Seal of Quality”: this made sure the quality for the games were up to standards and a great way for them to monitor and collect on royalties that 3rd party software companies made, which were their compliments. * Nintendo took the strategy of developing some complimentary products inhouse, which were the games, while outsourced most of it to 3rd parties. * They also set restrictions on how many games could be developed by 3rd party , no more than 5 games per year.
2. How attractive is the videogame console industry in June 2011? - mobile game sales were increasing to up and over 15% while handheld software game sales were decreasing by 19%. The entrants of new substitutes decreased the attractiveness of the video gaming industry. - Microsoft and Playstations during 2010 developed better motion sensor products than wii, which was their core competitive offering for their systems, they didn’t have graphics to go with it.
- they also offered other bundled technology, such...