September 13, 2012
The Five Forces Analysis on Gaming Industry
Every man in the business uses five forces in order to progress in company’s industry. The five forces are customers, entrants, substitutes, supplies, and the nature of rivalries. These elements not only show the state of company but also why some of them are so successful then the others. In this analysis we will see how these five forces relate to the video game industry, how strong each force is, and answer the question of whether it is an attractive industry for Sony to be in, in 2008.
The most recent new entrants into the gaming industry in the past five years have been Microsoft and Sony, Microsoft known for their most popular computing programs and Sony known for basic platform gaming, and high quality electronics. But even companies as Microsoft and Sony, who have been successful in others industries, must go through tough times and solve unpredictable problems outside the company but even in the ‘heart’ of company. The barriers that were hit when entering the gaming industry are internal policies of company marketing changes and economics scale. Now there are three big companies in gaming industry and no space left for the others, because of Microsoft and Sony, the most advanced gaming experience out there, enter the market and become almost unbeatable opponent. Whereas Nintendo went towards more user friendly for all ages, in which has now lead them to dominate the video game industry based on sales and income.
One of the biggest forces in gaming industry would be the bargaining power of buyers, or customers. Their power, determine the terms and conditions of sale, and the idea in which a company’s research and development company should start investigating. As decades past in the gaming industry, we saw a change in terms of what the customers wanted. Which then lead companies like Sega, Sony, and Microsoft develop faster and more realistic games which lead to side...