Unlike in other electronic industries such as PC, Camera, Smartphone etc only 3 majors companies lead the gaming console market: Microsoft XBox, Sony Playstation and Nintendo Wii. This industry has become more profitable year over year, but remain a really competitive business where companies have to be extremely responsive and innovative to survive. We have seen over the last decade one of the major actor of the industry, Sega, become the perfect example of a market leader which wasn't enough efficient in its business model and which has not been able to stay in the competition. Sega bankruptcy is also due to the arrival of Microsoft with the XBox in 2001. The PC worldwide leader had enough power and resource to enter in the gaming console market and become quickly a major leader. They take the opportunity to compete with already known companies like Nintendo and Sony.
Microsoft new entrance was really successful and the gaming industry is now an important part of Microsoft revenues. Regarding this last 15 years, we see that this market is really volatile and each of these 3 main actors must have different strategies in order to keep their market share. In this paper, we will provide a global industry analysis through PESTEL and Porter model. We will next analyze the value chain of the 3 companies and compare their strategy to see what is the key of success.
[...] Also unlike its competitors, Sony designed a box for PS3 that's even larger than its predecessors. Both Nintendo and Microsoft made their latest offerings smaller than previous systems to appeal to the contemporary aesthetic. We have seen recently the Playstation becoming smaller and change color to satisfy a broader audience who care about design. ▪ Inbound logistics, operations & outbound logistics: Page 16 sur 23 Slightly more than 50% of the electronics' segment's (batteries, memory sticks, semiconductors . ) total annual production took place in Japan. [...]
[...] This industry is quite similar to the luxury industry, which don't feel the effect of the economic crisis. Following the launch of the new Wii Microsoft and Sony will launch soon their new next gen console (Xbox 720 and Playstation and we will certainly observe the same enthusiasm of the public and the gamers. Page 21 sur 23 Page 22 sur 23 REFERENCES MarketLine Industry Profile "Global Games Console", Reference Code: 0199-0974, January 2012 "Xbox vs. PlayStation: Playing Hard to Get." Ryan, Oliver & Varchaver, Nicholas Fortune; 2/6/2006, Vol Issue p26-26, 1/2p Color Photograph "Wii Xbox 720 And PlayStation Will Next-Gen Consoles Live Up To Their Predecessors? [...]
[...] Value Chain ▪ Infrastructure: Sony Corporate has over hundred companies worldwide. With the PlayStation launch, Sony has developed a wide games range. Thanks to its skills and effectiveness, Sony was able to increase the support for both developers and retailers. ▪ Human resource management: Sony Corporation takes advantages from joints ventures and acquisitions to enhance its skills and competencies. ▪ Technology Development: Page 15 sur 23 Originally slated to launch spring 2006, the PlayStation 3 release was delayed until November because its two most exciting pieces of technology weren't ready (Cell processor chip and the Blue-ray drive). [...]
[...] Value Chain ▪ Infrastructure: Microsoft is an American multinational computer technology corporation that develops, manufactures, licenses, and supports a wide range of software products for computing devices. The company takes advantages of huge assets and knows how, brand recognition and awareness but also leadership on home computer. ▪ Human resource management: Microsoft use human resources for competitive advantage, basing their success on having the very best people in the industry and inspiring them to be the best. It is this that leads to Microsoft's unique recruitment practices. [...]
[...] The company is really secret about its human resource policy. ▪ Technology Development: Even if Nintendo has lost significant market share since the 90's, the company has survived through a strategy of cost advantage by using cartridges whereas competitors were using CD. Since, technology is the main source of investment and especially R&D which led the company to the top level. Indeed, wireless motionsensitive remote controllers, built-in Wi-Fi capability, and a host of other features have made the Wii the best-selling latest generation console system in the world. [...]
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