The gaming console industry competition: Sony vs Microsoft vs Nintendo

Thèmes abordés

Sony, Microsoft, Nintendo

Résumé du document

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.

Extraits

[...] Legal factors: The gaming consoles market is regulated by government policies to protect consumers. For instance, government set up limit age for violent games and is really involved in health safety. Topics like copyrights, license and intellectual properties are part of the regulation, but not really a threat for the companies. III. Firm Analysis The Microsoft Xbox Background & Strategy Microsoft is one of the wealthiest and most successful companies in the world. It was founded in 1975 and is now one of the leaders of home computer market. [...]

[...] The Playstation console is available in many informatics shops but also online and on their own website. Services: Sony provides to customers high quality products but also a good networking and media playback features. Some products could also be connected via Bluetooth to share pictures or data. The Nintendo Wii Background & Strategy Nintendo is a multinational corporation created in 1889 in Japan to make deck cards. After several small niche businesses, the company implements in video game console market with the NES and create strong character as Mario and Zelda. [...]

[...] Regarding to the current situation, we can say that Sony and its Blue-ray disc has won the competition because the format was adopted by the movie industry too. Procurement: Like its competitors, Sony provides games and console at reasonable price by manufacture them in Asian countries in order to benefit from cheaper workers and raw materials. The PlayStation 3's design was aimed at the high-end market as well. Sony chose not to follow current design trends and adopt the color white for its consoles like its competitors. [...]

[...] Degree of Rivalry As we said previously, the market account for only 3 actors Microsoft with Xbox, Sony with Playstation and Nintendo with Wii. The competition is quite hard on prices particularly on retailer shops selling a lot of second hand machines and games. Almost half of the products sold are compatible with every platform, but gamers have their preferences and are often loyal to a brand. Page sur !23 ! Threat of New Entrants According to the MarketLine study is quite easy for a new retailer to enter in the market due to the low level of regulation and the growth of the market. [...]

[...] 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. [...]