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3 Do Networking

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  • 1. 3DO in 32-bit Video Games Sarah Gay MBAM 619 - March 21, 2009 Saturday, March 21, 2009
  • 2. The Video Game Industry Transition from 8- bit systems to 16- bit systems Something better than the 16-bit systems? CD-ROM formats Saturday, March 21, 2009
  • 3. Technology Original games were 8-bit 16-bit and 64-bit was quickly becoming the new standard Moving from cartridge-based games to CD-ROM-based games. Allowed for better creativity in software development. Switch from focusing on hardware only to focus on software development Licensing was a big new idea Licensed out hardware technology for free Saturday, March 21, 2009
  • 4. Moving from cartridge games... ...to CD-ROM based Games. Saturday, March 21, 2009
  • 5. Key Players 3DO: Started by Trip Hawkins from EA Sega: World’s leading manufacturer of arcade games Nintendo: Maker of the popular Nintendo Entertainment System Sony: Master of audio CD and CD-ROM harware technology Philips: Major European consumer-electronics conglomerate Atari: Created the original Atari system that founded the home video game business in the late 1970’s http://www.thegameconsole.com/videogames80.htm Saturday, March 21, 2009
  • 6. Key Player Movements 3DO: Shifting the games towards a CD-ROM-based game Also played CD’s and Kodak’s Photo CD Marketed as an “interactive multiplayer”, not a video game console Sega: Entering new markets - virtual reality theme parks. Introduced a CD-ROM add-on to the popular Sega Genesis & Genesis Super 32X add-on cartridge Creating the “Sega Channel”: games to your TV Collaboration with Hitachi and Microsoft for a 32- bit CD-ROM machine (Saturn). http://www.videogamecritic.net/3doinfo.htm Saturday, March 21, 2009
  • 7. Key Player Movements Nintendo: Introduction of Super FX chip (enhances game cartridges) Collaboration with Silicon Graphics to create a 64- bit home gaming system Unveiling of Super Game Boy Allows Game Boy titles to be played on Super NES Reintroduced Donkey Kong - revitalizing the consumers’ love for the original games Saturday, March 21, 2009
  • 8. Key Player Movements Sony: Announced plans to create a 32-bit CD-ROM machine Strictly a gaming machine, not compatible with CD’s Philips: Introduced the CD-I $1,000 gaming unit initially Price decreases couldn’t help the sales - began to license the technology Atari: Introduced a 64-bit system manufactured by IBM Available with a CD-ROM add-on Saturday, March 21, 2009
  • 9. PRICE$ 3DO:$700 to $500 Sega Saturn: $450 Nintendo Project Reality: under $250 Sony Play Station: $500 Philips CD-I: $1,000 to $499 to $299 Atari Jaguar: $249 Saturday, March 21, 2009
  • 10. Trends in the Video Game Industry Lower Priced consoles Larger number of games per console More colors in the graphics Higher quality of graphics Consoles only play games Multiple ports for controllers Games with four to eight players http://en.wikipedia.org/wiki/Video_games Saturday, March 21, 2009
  • 11. Value Chain for the Video Game Industry Inbound logistics : Hardware created by manufacturers who obtained licenses from 3DO. Software was designed by Operations: Third party developers Outbound Logistics: Manufacturing was all done by third parties. 3DO mainly operated through granting licenses. Marketing & Sales: Announcements to the gaming world about the new 32-bit gaming console. Services: Continued networking with other manufacturers and developers for licensing. http://en.wikipedia.org/wiki/3do Saturday, March 21, 2009
  • 12. 3DO License Hardware Software Manufacturer Developers Distributor Retail Store Consumer Saturday, March 21, 2009
  • 13. Consumers: The Gamers Most were young, with limited budgets Already owned a console Purchasing another expensive console was not their first priority Loyal to brands Nostalgic Wanted to play games with others: multiplayer games were becoming popular Saturday, March 21, 2009
  • 14. Demand Side Increasing Returns The more people that use them, the more valuable they are. Need to connect people. Personal computers were beginning to take their place in homes. High switching costs make it hard to increase your user base. Saturday, March 21, 2009
  • 15. Why 3DO failed People want consoles that play games, not CD’s or Photo CD’s Brand loyalty - gamers already had acquired tastes Design flaws One controller port 5 buttons, not 6 on the controller (most games needed 6) Cost of switching is high - easier to buy an add-on for your current console ( $200 for an add-on vs. $700 for a new console) http://www.videogamecritic.net/3doinfo.htm Saturday, March 21, 2009
  • 16. What Could Have Saved 3DO? Something to stand apart from the current gaming consoles. Price Point Exceptional Games Superior console design Interaction with personal computers. Create a connection between gamers. Multiplayer games Lower the cost of switching - console prices (want to break the existing network advantage). http://en.wikipedia.org/wiki/North_American_video_game_crash_of_1983 http://www.jackmwilson.com/eBusiness/eBusinessBook/Strategies.htm Saturday, March 21, 2009