Sdm - Industry Analysis - Video Games

INDUSTRY ANALYSIS

Michael E. Porter’s Five Forces Analysis:

The video game industry contains 3 big players – Microsoft, Sony and Nintendo. Competing for supremacy, these giants engage in and employ constant strategic maneuvers to out-do and out-innovate the other, to claim a bigger market share and buyer patronage. To analyze the factors influencing the rivalry in the industry, Porter’s Five Forces Model of Competition depicts the various competitive pressures in the market and allows systematic diagnosis and in-depth analysis of the same.

Rival Sellers:

The 3 rivals in the gaming industry continuously battle for market leverage. To propagate buyer demands in their favor, jockeying is more than often used.

Despite the introduction of video games in 1947, it was not until the 21st century that the video gaming industry saw a revolution. With the introduction of technologically advanced gaming consoles, and user-intriguing graphical interfaces, the concept of video gaming was changed forever. In 2000, Sony gave birth to a new gaming era with Microsoft and Nintendo following soon after.

Third Generation Gaming

Rivalry among Sellers:

In November 2005, Microsoft initiated the third generation gaming with the launch of the Xbox 360. Hitting the fast growing markets of North America initially, it enjoyed a ‘one-year first-mover’ lead with the last gaming revolution for either Sony or Nintendo coming in 2001 (with regards to gaming consoles, excluding handheld). Capitalizing on the previous success with Xbox, they introduced the Xbox 360 which, at the time, was the most technologically advanced gaming console to hit the shelves recording sales of more than 5 million units worldwide. Complete with ultimate HD graphics and easy-to-use interface, Microsoft built upon its competitive advantage of hitting the markets first. To further consolidate their position, the new Xbox 360, as with the previous Xbox, was paired with Xbox Live to enrich the 3rd generation...