Home Video Game Industry
Home Video Game Industry
From JIAN QU
To Dr. Scott Kiker
Date 6/23/2013
1. Why the rapid growth of Atari? Why the 1982-85 collapse? How did Nintendo rebuild the industry? What was its strategy? The reason of rapid growth is the Atari’s products are highly differentiation. Atari is the first company enters the market, although some companies enter the market later, but Atari already build the reputation of highest technology support and the popular games provider to the customers. In the production competition, the Atari is the cost leader because they enter the market first, they could provide more high quality product with low cost. I think the home video game was accepted by the people who live in the 1970s and the demand of home video game increase rapidly at that time.
There are some reasons leads the collapse of 1982-85. First, I think the substitute threat is the most vital reason. The Famicom seemed the product to replace Atari’s product. Second, a large number of independent companies were produce hundreds of games for Atari 2600. The quality of the games cannot maintain at the same level of the Atari’s product used be. And the excess capacity of cartridge leads the price decrease speedily. Third, new technologies strike, personal computer computers take the place. Finally, the company fails to expect the demand of that period of time what cause them over stock, and they do not obtain the license of Donkey Kong. With the rival in the same market, Atari also do not well.
Nintendo use both cost leader and differentiation strategy. In order to keep costs down, Nintendo refused to use 16-bit processor. Nintendo approached the engineer of chips keep in 2,000-yen. At meantime, the chips, memory and the games are better performance than other companies. Nintendo provide cheapest, faster version of the console to the market, then strength on the software product such as games. The licensing program makes it possible strict control the
From JIAN QU
To Dr. Scott Kiker
Date 6/23/2013
1. Why the rapid growth of Atari? Why the 1982-85 collapse? How did Nintendo rebuild the industry? What was its strategy? The reason of rapid growth is the Atari’s products are highly differentiation. Atari is the first company enters the market, although some companies enter the market later, but Atari already build the reputation of highest technology support and the popular games provider to the customers. In the production competition, the Atari is the cost leader because they enter the market first, they could provide more high quality product with low cost. I think the home video game was accepted by the people who live in the 1970s and the demand of home video game increase rapidly at that time.
There are some reasons leads the collapse of 1982-85. First, I think the substitute threat is the most vital reason. The Famicom seemed the product to replace Atari’s product. Second, a large number of independent companies were produce hundreds of games for Atari 2600. The quality of the games cannot maintain at the same level of the Atari’s product used be. And the excess capacity of cartridge leads the price decrease speedily. Third, new technologies strike, personal computer computers take the place. Finally, the company fails to expect the demand of that period of time what cause them over stock, and they do not obtain the license of Donkey Kong. With the rival in the same market, Atari also do not well.
Nintendo use both cost leader and differentiation strategy. In order to keep costs down, Nintendo refused to use 16-bit processor. Nintendo approached the engineer of chips keep in 2,000-yen. At meantime, the chips, memory and the games are better performance than other companies. Nintendo provide cheapest, faster version of the console to the market, then strength on the software product such as games. The licensing program makes it possible strict control the