Microsoft Xbox Entering the World of Video Game

Topics: Xbox 360, Video game console, Xbox Pages: 10 (3175 words) Published: February 11, 2007
Table Of Index

Microsoft: Entering the Gaming Industry3
Microsoft Xbox3
The Strategy4
The Result of the 1st Round5
The Next-Gen Gaming War Announced6
The Economies of scale – What it has Learned6
The Timing - Being the first on the market, an advantage?7
Securing the Production Chain8
Securing the Market – Microsoft Innovation Breaking Through9 Securing the Market – Product Segmentation10
Securing the Market – Japanese Game Developer11
Launching The XBOX 36013

People start hearing the words "video games" 1970s, but it actually it already began 30 years before. The idea originally came from the imaginations of scientists in research lab in the late 1940s. And now it has become and still one of addictive product in human history. In 1980s nearly 20% of U.S. homes had video game system, and more game licensers releasing new titles expanding the industry into billion dollar industry. Having a dark age period in 1982 – 1984, in 1985 – 1984 the industry revived and reaching an industry worth $2.3 billion with market share 77% owned by Nintendo. Considered as a profitable business the industry has a lot of big Players ATARI, Nintendo, SEGA, Sony and even Nokia who started in Cell phones trying to make way to the Gaming Industry and the late entrant Microsoft. In This Paper writer trying to open the Microsoft Xbox the late entrant whose trying to make way to defeat Sony (market Leader at that time) and have the biggest market share in the gaming Industry. Will it be success?

Microsoft: Entering the Gaming Industry
The meeting between Microsoft and Capcom, a Japanese video game publisher, was going poorly. One of the Japanese game developers at the table in Capcom's Tokyo headquarters said, "We know the philosophy of Nintendo. Game is toy. We know the philosophy of Sony. Game is entertainment. What is Microsoft's philosophy?" Kevin Bachus, who was then director of third-party relations for Microsoft's Xbox console, replied, "Game is art."

—Red Herring "The Game of War"
Microsoft Xbox
In 2001 Bill Gates the owner of the biggest Operating System corporation "Microsoft Corp" announces the birth of their ultimate gaming system. Wrapped in black case, with green jewel in the center of the console called "XBOX" offered claiming to be superior then its competitors Nintendo GameCube and Sony's Playstation2. Hitting No. 2 spot in the shelves in just 18 months.

In Order to penetrate the market which the mind set of its customer already mature and considering Sony's PlayStation2 is the No.1 Console delivering No.1 game titles is not easy. Microsoft facing an uncertain economy and strong competition, anticipated absorbing $2 billion in losses before attaining profitability. Microsoft has to develop a Good Marketing strategy and with support of the superior console quality. Delivering something new to the market.

The Strategy
Trying to penetrate the gaming industry Microsoft a company with endless financial capacity intends to give a full support for the success of its new born baby. The Xbox offers: 1.Technology Differentiation

Combining all the latest technology developed by various company Microsoft reduces its cost for R&D because they only buy the Personal Computer based hardwares from other vendors and manufacture it into a console, and call it Xbox. Microsoft target is creating a platform with 3x the performance of the PlayStation2 its No.1 Rival at the time. Offer a built in Hard Disk Drive, Ethernet broadband card, Dolby Digital Suround and Online Game and market. 2.Free Development Kits for Games Supplier

Offered SDK for free to game developers for free an easy to use programming system. Equality among big and small developers Microsoft gain respects from the developers. Positioning
Micosoft positioning in this project is being the competitor of the market leader and took the market share. Pricing

References: • Wall Street journal :
o New Xbox Aim For Microsoft: Profitability
o Getting Xbox 360 to Market
• : PlayStation 3 vs Xbox 360 vs Nintendo Wii
• Computer World Blog : More Sony PS3 woes : Microsoft Releases XBOX 360 developer kit for the masses.
• Tuck School of Business at Dartmouth-Glassmeyer/McNamee Center for Digital Strategies.
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