Game Console Industry 5 Forces Analysis

Topics: Video game console, Video game, PlayStation 3 Pages: 2 (602 words) Published: April 18, 2011
Rivalry Among Competitors
Game console companies are facing strong rivalry competitions. As the industry develops, every game console company tries to implement the latest graphic technology into their products, and those who fell to apply the new technology have seen a decline of the market share. In addition, many of the console companies are exploring new functions that are not just video games. Threat of New Entrants

The threat of new entrants is low. All the game console companies hold some patents on their products. They also have applied some cutting-edge technologies. For examples, the Wii uses motion sensors that wired on the controller to play, Sony PlayStation 3 has their Blu-Ray technology built in to play high definition videos, and the Xbox adapts Microsoft Web services to connect players in the world all together. To meet such technology standard, the potential new comers need to invest a lot of capital into their product design and development. The industry has been existed for several decades that some of the brands have shaped customers’ loyalty. Most of the existing game console companies also run other related business in electronics or game software that they have a pretty good relationship with up-stream suppliers. Threat of Substitutes

The threat of substitutes of game consoles is big. New technology has pulled some old console players into computer games and online games. It’s also seen a growth in mobile phone industry and MP3 player industry. More people tend to play games with portable electronic devices. The experience of playing games on those devices may not be comparably well, but they are more affordable and fit the fast living pace. Sony and Nintendo both have been aware of the portable game player substitutes that they have begun invest that industry while Microsoft itself was coming from the PC game industry. Besides, the travel and tourism industry has also expanded a lot compare to the early 80s when a lot of...
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