Sony’s Future Focus in the Video Game Industry
The video game industry has gone through six generations of consoles, and the seventh is now underway with new consoles from Nintendo, Sony, and Microsoft. Atari led the first generation of the video game industry. They were able to create the first home video game Pong in 1972, and they were the first to develop the interchangeable cartridge and the joystick. The creation of the interchangeable cartridges allowed for third party independent video game developers to enter the market. Atari failed to develop a system that controlled who could develop games for Atari consoles, so the company eventually failed when low quality games created by independent developers flooded the market and caused prices to plunge.
Nintendo was able to become the leader of the video game industry in the next generation by entering licensing agreements with third-party game developers and by instituting a “Seal of Quality” policy where no game could be published without Nintendo’s approval. Nintendo’s success with developing popular in-house games like Super Mario Brothers also contributed to their success in the second generation. However, Nintendo let Sega enter into market and take over as the next leader in the industry when Nintendo mistakenly delayed the release of their 16-bit console to avoid cannibalizing sales of the 8-bit console. Sega took advantage of Nintendo’s mistake by offering lower prices for their new console and games.
Sony took control from Sega as the leader in the video game industry from 1988-2005 by targeting more mature audiences for their video games and being the first to install DVD-playing capability and Internet connectivity in the consoles. However, Nintendo was able to take over the lead in the most recent generation from “forward looking” Microsoft and Sony by being able to attract demand from younger and older audiences. This has caused Sony to reevaluate their strategy for...
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