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Microsoft XBOX
Overview            Company‟s Vision            New Product development Strategy            Video Gaming Industry      ...
Company‟s Vision & Idea generation        Company‟s vision :     Sales of PC software would not last forever and Microsof...
Business Advantage         Microsoft dominates in its core market of operating systems (PC) and desktop application      ...
Video Gaming Industry.. ..Basic facts       The video gaming industry is characterized by a 5 year cycle: the games conso...
Strong Veterans Competitors             1995          2000                2006                    2002               2006P...
History of popular gaming consoles(roughly 5 years)  Sega                                           6 yrs.                ...
Microsoft‟s Research sources                Internet                Special Interest Magazines                One-to-on...
Valuing Customer Inputs                                         (Turn Customer inputs into  innovation) [Article]  Strengt...
Messaging                PlayStation and Nintendo             TO CONVINCE :             people, aged 18-34 to to use thei...
Strategy           Acquire/ Retain           (bungie in 2000             to get HALO           games flagship)
Exciting Innovation that reduced the Complexity [Article]            Created a console community            Access to Do...
Determining Key Success factors of Microsoft XboxLive! Platform                                                Marketing m...
How Microsoft implemented growth strategyin the games console arena       2002 : Diversification Strategy by offering a ...
Market Survey Results before the launch of Xbox 360                                                         Time Spent on ...
What Stage of Product Cycle XBOX was        2002 : Xbox‟s introduction stage was         stretched due to slow sales, no ...
Market in 2009                                           A“controller free gaming and entertainment                       ...
Kinect‟s Positioning  “Easy to use and instantly fun, Kinect…gets everyone off the couch. Want to join a friend in the fun...
Current Positioning on Perceptual MapPre launch   Xbox    Xbox live   Xbox 360   Xbox+Kinect
Product evolution                                                                      Xbox live                          ...
Current Standings                        2012 Best Video Game Console Comparisons and Review                              ...
Weaknesses of Microsoft Xbox    Xbox Live! service requires broadband-access, but majority of European/Asian households a...
Data Sources                http://www.video-games-survey.com/                http://forum.pcvsconsole.com/ •http://www....
Thank youGroup # 7Roll #s      Name12PT1-092    Veeresh Srivastava12PT1-093    Vikas Phalaswal12PT1-094    Vikram Dhawan12...
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Microsoft xbox live

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Transcript of "Microsoft xbox live"

  1. 1. Microsoft XBOX
  2. 2. Overview  Company‟s Vision  New Product development Strategy  Video Gaming Industry  Competitors & Key product launches  Market Study- An user survey and market size  Product life cycle and stage at which XBOX live is  How Microsoft is trying to implement a growth strategy in the games console arena (using the Ansoff matrix)  Key success factors of launching the Microsoft X box Live platform (Marketing mix 4-Ps framework)  Key weaknesses of Microsoft‟s XboxPre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  3. 3. Company‟s Vision & Idea generation  Company‟s vision : Sales of PC software would not last forever and Microsoft had to look ways of future growth. To get a competitive edge, they followed diversification strategy and changed the existing market  Idea Generation (thru R&D team) In 1998 four engineers from Microsofts DirectX team, Kevin Bachus, Seamus Blackley, Ted Hase and DirectX team leader Otto Berkes, disassembled some Dell laptop computers to construct a prototype Microsoft Windows-based video game console. The team hoped to create a console to compete with the Sonys upcoming PlayStation 2, which was luring game developers away from the Windows platform. The team approached Ed Fries, the leader of Microsofts game publishing business at the time, and pitched their "DirectX Box" console based on the DirectX graphics technology developed by Berkes team. Fries decided to support the teams idea of creating a Windows DirectX based console  Testing During development, the original DirectX box name was shortened to Xbox. Microsofts marketing department did not like the Xbox name, and suggested many alternatives. During focus testing, the Xbox name was left on the list of possible names to demonstrate how unpopular the Xbox name would be with consumers. However, consumer testing revealed that Xbox was preferred by far over the other suggested names and "Xbox" became the official name of the productPre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  4. 4. Business Advantage  Microsoft dominates in its core market of operating systems (PC) and desktop application software  Had monopoly power (almost) in pc era  High revenue and profits have been healthy and steady  50 billion in profits over 27 years  4.2 billion annually invested in R & D  Had Strong financial backing & long term vision which made them stay despite incurring losses in the beginning. They forced the key competitors, Sony & Nintendo to get into price war for survivalPre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  5. 5. Video Gaming Industry.. ..Basic facts  The video gaming industry is characterized by a 5 year cycle: the games console has roughly a 5 year life cycle before being replaced with new, improved technological hardware  Highly Competitive area: Presence of Industry Giants like Sony , Nintendo . Also, many giants have come and gone like Sega who retrenched from games console market due to Sega Dreamcast flop in 1999. (Now they are games developer only)  The console industry sells its products at prices that are below costs and makes money through the sales of games in the form of licensing fees Industry StructurePre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  6. 6. Strong Veterans Competitors 1995 2000 2006 2002 2006Pre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  7. 7. History of popular gaming consoles(roughly 5 years) Sega 6 yrs. 4 yrs. Sega Mega Drive Sega Saturn Sega Dreamcast (1989) (1995) (1999)Nintendo 6 yrs. 4 yrs. 4 yrs. 7 yrs. Nintendo Entertainment Game boy Nintendo 64 Nintendo Gamecube Nintendo w ii Service(1985) (1989) (1996) (2002) (2006) Sony 5 yrs. 4 yrs. Sony PlayStation Sony PlayStation2 Sony PlayStation3Pre launch (1995) Xbox Xbox live (2000) Xbox 360 (2006) Xbox+Kinect
  8. 8. Microsoft‟s Research sources  Internet  Special Interest Magazines  One-to-one Interviews  Internet Forums  2 Focus Groups  Natural Habitat Interviews (LAN Findings : People Play video games for entertainment. a Good video game lets you immerse yourself in the experiencePre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  9. 9. Valuing Customer Inputs (Turn Customer inputs into innovation) [Article] Strength : Xbox‟s strength was best hardware, best online gaming, system link & Halo products Insight :  it is not important how good a system is in numbers and specs but what it can do for the game experience. Strategy  The new campaign – created by brand agency Landor – – stresses Games No brand ads but game ads with a brand messages (Halo2 became a killer app of Microsoft’s Xbox) New Slogan:  IT‟S GOOD TO PLAY TOGETHER Why is it good to play together? IT IS MORE FUN!Pre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  10. 10. Messaging  PlayStation and Nintendo TO CONVINCE : people, aged 18-34 to to use their console system instead of not playing games because they give you a break from everyday life  XBox TRIES TO CONVINCE: people, aged 18-34 to use their console system instead of not playing games because you should play more to have more fun.Pre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  11. 11. Strategy Acquire/ Retain (bungie in 2000 to get HALO games flagship)
  12. 12. Exciting Innovation that reduced the Complexity [Article]  Created a console community  Access to Downloadable Games  Big, Fat, Delicious Downloadable Content  Hard Drive Storage  Firmware Updates  Birth of the Media Center  Love of Local Multiplayer  Hello, High-Def  It Made Microsoft a Player  Avoided feature fatigue [Article]  Secured profits by not extending product lines [Article] Data SourcePre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  13. 13. Determining Key Success factors of Microsoft XboxLive! Platform Marketing mix 4-Ps framework Product Price  Superior technology (broadband-ready) Hard disk for data safety  Exclusive games from developers  Variability–community character(subscribers find friends at  Gamers only pay costs of starter kit for the Xbox Live! Service online chat, download games, additional levels, weapons and (€52 in UK and that Price covers 1 year online characters,...) subscription, Headset, and Xbox communicator. )  Safety aspect(disable downloading content)  With special emulator programs Xbox enables to play  After 1 year automatic renewing subscription with credit card. PlayStation games. (quick and easy)  Enable DVD and all other video and audio files as well as web live streaming.  With Linux software, mouse, keyboard and USB ports it´s gives computer‟s experience. Promotion Place/Distribution  First broadband-ready gaming console  Xbox Live! service provides a powerful word-of-mouth marketing  Microsoft distributes its software products over the Xbox Live! for Microsoft because players interact with each other and platform exclusively for gamers to download fast, easy and safe recommend games to play.Pre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  14. 14. How Microsoft implemented growth strategyin the games console arena  2002 : Diversification Strategy by offering a  2006 onwards : Xbox became obsolete and replaced by new product (XBOX) for a new market Xbox360 and that is extreme upgrading of Xbox. It can be seen as product replacement at Product development strategy. -> New technology, new features(Xbox Live! & Kinect changed the game). Kinect allowed to integrate technology to what MS had, giving episodic interactive TV and building connections with organizations such as Sesame Street and National Geographic. Its created a whole new level of two-way TV integration thats given us a brand new growth spurt at this point in the lifecycle. Products Products Existing New Existing New Existing Existing Market Product Market Product Product Expansion Development Expansion Development Development Market Market Market Entry into new Market Entry into new New New Development Market Development Market (Diversification) (Diversification)Pre launch Xbox Xbox live Xbox 360 Xbox+Kinect Ansoff Matrix
  15. 15. Market Survey Results before the launch of Xbox 360 Time Spent on playing video Online games Time Spent on playing video games Top Gaming consoles in use Console hardware sales ( in million $) %age owningPre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  16. 16. What Stage of Product Cycle XBOX was  2002 : Xbox‟s introduction stage was stretched due to slow sales, no profit and dragging growth. Sony´s PS2 is two years in sale ahead and located at growth phase due to fast sales Nintendo´s GameCube behind PS2 but close to Xbox sales rate in introduction phase  2006 : Xbox360 selling was increased with Kinect launch. Referred to introduction phase Sony´s PS2 is located at maturity phase due to tremendous sales Nintendo´s GameCube way behind Xbox and Xbox 360 sales rate but in growth phase Xbox sales were declining with no profit scored. However, Xbox Live! is in growth phase captured 35m + subscribers for the service (billion $ revenue for Microsoft) XboxPre launch Xbox live Xbox 360 Xbox+Kinect
  17. 17. Market in 2009 A“controller free gaming and entertainment experience”-Xbox360addonPre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  18. 18. Kinect‟s Positioning “Easy to use and instantly fun, Kinect…gets everyone off the couch. Want to join a friend in the fun? Simply jump in.”Pre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  19. 19. Current Positioning on Perceptual MapPre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  20. 20. Product evolution Xbox live Xbox+Kinect (2002 ) (2010) • A sixth generation gaming console •Xbox live service was shut down for a •Microsoft acquired bungie just before major upgrade. Xbox‟s launch •Adding a basic service „Xbox live free‟ •Flagship of Halo 2 which provided a •Online Multiplayer Gaming Service with added features • Launched a motion sensing(full body) readymade fan base which is known as •Voice chat , video chat •Digitized avatars were introduced input device that enables a controller „killer app‟ •Friend list upto 100 users • Available at low prices ($299 initially & free interactive gaming & entertainment $279 in Aug 2007) experience • Windows live messenger integration •In partnership with Netfix , Bill Gates •8 million units were sold in first 60 days •In may 2009,it had 20 million subscribers announced ‘New Xbox live that claimed Guinness books of world base experience’ to raise the levels of records. •A bundle of gaming console, Halo games and 1 year free subscription was service sold to consumers Xbox Xbox360 (2002) (2005)Pre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  21. 21. Current Standings 2012 Best Video Game Console Comparisons and Review Data Source Microsoft‟s entertainment division, which includes the Xbox, posted a 45 percent sales gain to $8.91 billion in the fiscal year that ended in June 2011. The Xbox 360 outsold Nintendo Co. (7974)‟s Wii and Sony Corp. (6758)‟s PlayStation 3 in 2011, and also sold better than any other TV- connected devices, including DVD players and home-theater systemsPre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  22. 22. Weaknesses of Microsoft Xbox  Xbox Live! service requires broadband-access, but majority of European/Asian households are not yet broadband-ready.  Initially (2001), Microsoft focused more on Japan market that was already hitting lows because of boom in cellphone industry that delayed the launces in Europe.  Microsoft launched XBOX an year after Sony‟s playstation2 & lost a golden opportunity to beat the competiation. By the time the competition arrived, Sony launched a number of improved titles including Gran Turismo 3  Microsoft could not retain the talent and its key founder left the company early.  Lack of broadband-access will not enable future revenues streams as Microsoft expects  Subscription of Xbox Live! requires gamers to provide credit card details which primarily adults can afford. Some (children,…) can not afford a credit card.  In Europe, €60 per annum or €6 per month for use of Xbox Live! Platform is little expensive. Moreover, subscription is automatically renewed and credit card user is automatically charged without permission that leads to user‟s distressPre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  23. 23. Data Sources  http://www.video-games-survey.com/  http://forum.pcvsconsole.com/ •http://www.xbox.com  http://www.wikipedia.com  Principles & Practice of Marketing by David JobberPre launch Xbox Xbox live Xbox 360 Xbox+Kinect
  24. 24. Thank youGroup # 7Roll #s Name12PT1-092 Veeresh Srivastava12PT1-093 Vikas Phalaswal12PT1-094 Vikram Dhawan12PT1-095 Vineet Sachdeva12PT1-096 Vipul KumarA09PT2-098 Amit Makhija
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