Executive Summary nintendo
Executive Summary
During the PlayStation 2 era, Sony had a complete domination of the market at 89 million consoles sold vs. Xbox and GameCube’s roughly 20 million each. Recently, Sony production delay set it back in its war vs. Microsoft’s, and to win the future Sony needs to reclaim its total domination within the hardcore, 16-25 year old computer savvy, gaming market. The Wii is carving its name outside the target market of Sony, and it isn’t cost effective attack both the hardcore gaming market and casual gaming market because they want different things. To be successful in the future, Sony needs to turn its attention to Microsoft and focus on what it is already successful at.
Analysis
Video game industry in 2008 The video game industry has grown substantially since 1995. (See exhibit 1) and the prospects of growth look great going forward. Three main players dominate the current market: Microsoft, PlayStation 3, and Nintendo. Furthermore, based on porter’s five forces, the threat of new entry is low. (Exhibit 2) Nintendo is outselling Sony 2 to 1 by going after customers currently out of the video game market share. This threat shouldn’t be as much of a concern as an opportunity; the two companies are competing in different realms. (Exhibit 3)
Nintendo’s introduction to the 16 bit game system Nintendo delayed its introduction of the 16-bit system because it didn’t want to cannibalize its current sales. This is the result of a disadvantage market leaders in a rapid growth market have. Nintendo product line was successful and there was still a ton of profitably left in their current product line. If they released a new product too early they wouldn’t have had enough time to dilute the RnD cost of their previous line and their new product would steal the market share. Sega took advantage of this weakness and made its way into the market.
Sega’s Judo Strategy In order to jump into the market, Sega needed to allocate its resources to
During the PlayStation 2 era, Sony had a complete domination of the market at 89 million consoles sold vs. Xbox and GameCube’s roughly 20 million each. Recently, Sony production delay set it back in its war vs. Microsoft’s, and to win the future Sony needs to reclaim its total domination within the hardcore, 16-25 year old computer savvy, gaming market. The Wii is carving its name outside the target market of Sony, and it isn’t cost effective attack both the hardcore gaming market and casual gaming market because they want different things. To be successful in the future, Sony needs to turn its attention to Microsoft and focus on what it is already successful at.
Analysis
Video game industry in 2008 The video game industry has grown substantially since 1995. (See exhibit 1) and the prospects of growth look great going forward. Three main players dominate the current market: Microsoft, PlayStation 3, and Nintendo. Furthermore, based on porter’s five forces, the threat of new entry is low. (Exhibit 2) Nintendo is outselling Sony 2 to 1 by going after customers currently out of the video game market share. This threat shouldn’t be as much of a concern as an opportunity; the two companies are competing in different realms. (Exhibit 3)
Nintendo’s introduction to the 16 bit game system Nintendo delayed its introduction of the 16-bit system because it didn’t want to cannibalize its current sales. This is the result of a disadvantage market leaders in a rapid growth market have. Nintendo product line was successful and there was still a ton of profitably left in their current product line. If they released a new product too early they wouldn’t have had enough time to dilute the RnD cost of their previous line and their new product would steal the market share. Sega took advantage of this weakness and made its way into the market.
Sega’s Judo Strategy In order to jump into the market, Sega needed to allocate its resources to