Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

VIDEO GAME CONSOLE INDUSTRY

No description
by

Ziyu Xiong

on 25 March 2014

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of VIDEO GAME CONSOLE INDUSTRY

High requirements of technical supports
1. Increase game diversification

SONY
Threat of potential substitutes(high)
Social (S)
Legal (L)
TECHNOLOGY
popularity of online free games
eg. ipad launched in 2010
Threat
awareness of negative health implication

eg.
Obesity; Vision problem
-----
Threat
violence of game
:
negative impact on the culture of people, bringing aggression in children
threat
human-computer interfaces & family-orientated game
:
general-purpose devices .
(Opportunity)

innovative remote wand-like controller
eg.
Wii

graphic improvement, 3D scene
.
(Opportunity)
High switching cost
of changing supplier, because of complicated technology.
Main competitors in console industry
controlled
the
core technology
-
reduce
the power of suppliers.
BARGAINING POWER OF SUPPLIERS (moderate-high)
VIDEO GAME CONSOLE INDUSTRY
Comparison between individual companies
MBV-PESTEL
1994
New
game titles-- the result of courting top games developers
Massive
advertising
Powerful
brand reputation,

Global distribution capability
and content from its
movie division
1998 Lower fixed production
costs
Outline
-Background
-
RBV

Historical Analysis
Comparison between individual companies
-
MBV

PESTEL, EV forces
Porter's 5 forces,impacts
KSFs
-
International Analysis
-Strategic issues
Issue overview
Key Strategic issues (Matrix)
-Strategic Recommendation
-Strategy Evaluation
-Conclusion


Weakness
Strengths

1st and 2nd Generations
(1972-1985)
NINTENDO
2. Fierce competition from other kinds of game devices.

2001
Technological advances

Hit game
Halo


Microsoft’s
online capabilities--
2002
Online interactive gaming
of
Xbox Live
Key Strategic Issue
Microsoft
1. Lack of game diversification
MBV-
Porter's 5 FORCES

long-term issues
BARGAINING POWER OF BUYERS (low)
INTENSITY OF INDUSTRY COMPETITION (high)
Apple
-

ipad
was already being positioned as a game-playing device-
increase the competition


THREAT OF POTENTIAL ENTRANTS (low-moderate)
High cost of entering
, especially in R&D expanse and investment.
Strong market player
(Nintendo, Sony and Microsoft)
Customer loyalty-
Moderate-low
Well-known company
enter into the industry (e.g Apple),
threat of switching-
high.
So the threat of potential entrants will
increase from low to moderate.
Wii -- appeal among

casual
video game players
Easy-to-use

and more accessible
Broad demographic
-- older people
Innovative remote
wand-like

controller--new experience of exercise

3rd Generation
(1985-1990)
Short-term issues
Nintendo

Low
Urgency
4th Generation
(1991-1995)

High
Urgency
Speed and graphics
Lacked a hard drive, DVD player and Ethernet port
Sega VS Nintendo
Entering the market later than others
Less market share than others
5th Generation
(1995-1998)

Complexity and high developing costs
Imperfect security system
Technical advances
Online interactive gaming
Direct downloading of games
Bigger library of games
Combine with IBM & Toshiba
Sony
More accessible & easy to use
Broad demographic market
6th Generation
(1999-2005)

7th Generation
(2006-2012)
Economical (E)
Background of companies
Nintendo
1985 NES Introduced, US.
$1.5 billion
Sony
1988 Super Disc
1991 Sony Playstation,
Over 104 million units
Microsoft

2001 XBOX
2005 XBOX360
Sold over 12.7 milion units
Threats from other devices
Lack of game diversification and technical creation

Uncertainty of future market positioning (home entertainment)
Over focused on expanding customer groups, ignoring the requirments of hardcore gamers which is the primary market.
global recession:

In 2012 US video game sales decline by 12%, falling to 17.9 billion.
(Threat)
Unemployment rate
:
US: increase 3.8% (5.8% ~ 9.6%) (2008-2010); reduce 2.2% (2010-2012)
(opportunity)

Japan: fluctuate between 4.0%~4.4% (2008-2012)
(Threat)
Atari
Console: Atari 2600
only one game
By 1988, 80% of US video games industry; carefully management; tight control of game supply.
Strategic issue
:
restrict game releasing;
lack of diversity
Sega: creation,'Genesis' in 1988.
Nintendo:strength in Japan

Strategic issue
:
Nintendo: local market only,
no expansion.
1994 PlayStation
powerful resources, new game titles
Nintendo: fail to recapture markets

Strategic issue:

Nintendo: niche market only
few resources.


Sony: (MARKET LEADER)
stronger performance than PC
10 times graphics processing power
PS2: multifunctional entertainment device
strategic issue
:
technical complexity; supply of key components; availability of new games
Microsoft: (2001 entered the industry)
competitive landscape transformation
2001 Xbox: technological advances, online capabilities
2002 Xbox Live: online interactive gaming, direct downloading
strategic issue
:
weaker popularity than Sony; slow downloading speed
Recommendation

Recommendation

1. Increase diversification:

Sony & Microsoft
-- increase family games;
Nintendo
--increase action games & role playing games (technology of graphics, immense processing power and cinematic quality)
2. Differentiate with other devices-- enhance quality of the controller (e.g, hand feeling, sensitivity)
Acceptability
Feasibility
Suitability

Expand market share
Neglect requirement of hardcore game players

Recommended strategies
Advanced technical capabilities and machinery available
Experts from R&D dept. available
Customers: various choices available
shareholders: market share growth;
Suppliers: more business opportunities

(YES)

2.Differentiate with other devices
Customers: enrich interests and interaction
Suppliers: more orders e.g. materials.
Moderate potential risk - stakeholders might not accept
Possess unique selling points
Innovative developers available
Technology support from the third-party.
Nintendo
Sony
Microsoft
Country
Japan
Japan
USA
1983
1994
Year of entering the market
2001
Flagship products
Wii
PlayStation 3
Xbox 360
Strategy Issue Prioritization and Classification
Nintendo Wii (MARKET LEADER)
remote wand-like controller
broad demographic; accessible and easy to use
Strategic issue:
heavily focus on customers rather than technical capacity
Microsoft Xbox 360
emphasis on entertainment and online capabilities
Strategic issue:
ignoring upgrade of processing power and hardcore gamers interest
Sony PS3
the Blue-ray DVD drive and multicore cell processor
massive development and launch costs
Strategic issue:
complexity; few games fully exploited and fitted in

Strategy Evaluation - SAF
EV Forces
Development of Technology:


eg. brililant graphics and high speed
Emerging new internet capabilities
: online free games/mobile games
Government policy:
anti-gaming legislative
Changing societal concerns attitudes and lifestyle:
leisure time
Changes in buyer market served:
woman & older people
- by 2011 age group 18-44 played video (majority); age group 55-64: 26%
International Analysis
Thanks for listening :))
Any Questions?

Japan
Market

U.S.

Europe

1st

2nd
3rd
Conclusion

Nintendo
69%
Sony
24%
Microsoft
7%

(2011-2012)
Nintendo Wii
46%
Sony PS3
18%

Microsoft
35%

Sony PS2
47%
the least mature
Microsoft Xbox 360
5%
Strategic issues overview
MBV Analysis
(5 Forces)
:

Lack of differentiation from other devices

RBV Analysis:
(Historical analysis
)
Nintendo: (3rd) restricting game innovation
(4th) too much focus on domestic market
(7th) not enough exploitation of technology

Sony: (5th) only targeted on niche market
(7th) complex of console, few games fitted in

Microsoft: (7th) lack of upgrading original technology
(7th) ignore requirements of hardcore gamers.


(?)
(YES)
(?)
(YES)
(YES)
-
Key strategic issues:
Lack of game diversification due to limited technical creation
Facing with fierce competition from other kinds of game devices
-Recommendations
Increase
diversification
Differentiate with other devices

Bei Zhang
Ziyu Xiong
Xiaolu Chen
Minxiao Li
Yuyang Zhang
Bei Zhang
Ziyu Xiong
Xiaolu Chen
Minxiao Li
Anti-violent video game Law:

(Threat)

Ban on foreign video game console

eg, China
(threat)
EV
: Emerging new internet capabilities-online free games attract many people
-
increase
the competition.
Historical Analysis
EV
:
Emerging new internet capabilities, pc & mobile online game might attract customers to switch to computer and mobile phone, increase the threat of substitutes.
Political (P)
Taxation relief
- Corporate Tax decrease of 2 % from 40.69% to 38.01% in 2012 in Japan
(opportunity)
3 main companies dominate the industry (Nintendo, Sony and Microsoft);
-oligopoly.
Not very high switch cost, but
limited
choice of company, difficult to switch.
highly
protective
of the information of the products
-customers
difficult to access
the information about (sellers, their products and prices)


high threat of
computer, mobile phone,
because of its price, functions and performance
portable game devices (eg. NDS, PSP)
Low
switch cost
If a new development of the technology, customers will switch to the substitutes
.
Environment
Consuming Resource --non-renewal
(weakness)
Crude oil:

4 gallons of crude oil can make 1 pound of plastic

plastic
- not decompose
eg. downloading all
Call of DUTY
games instead of manufacturing =20,131 Cars off the road

EV:

Development of technology-
Expended customer group-

demand

of video game console- the power of suppliers.
Government established
anti-gaming policy
-
demand

of video game--
reduce
the power of suppliers
The threat of potential substitutes -
very high.
Demand of customers
Market positioning

--different interests on video games
Customers fascinated by
novelty
and variety
Brand reputation
and advanced technology--even expensive
High quality
of the products --Multiple functioning
Analysis of competition
Online games
threats
-- large number of substitutes
Maintaining optimum membership level is crucial--
loyalty
of the customers
Differentiation
can lead to significant price premiums customers
Lower
costs
KEY SUCCESSFUL FACTORS
(KSF)

Key strategic isssues:
Yuyang Zhang
yhbhbhbhbh
Yuyang Zhang, Bei Zhang
Nintendo Wii
5%
EV:

pc online game-attract customer to switch to pc;
increases
the threat of substitutes.
Full transcript