THE VIDEO GAME INDUSTRY                               Group No. 13 (C)                  BALAKI MELISSA – 870910-1227      ...
VIDEO GAME PRODUCTS AND CONSOLES timeline 1972                1982                     1992                            200...
THE IMPACT OF NEW GENERATION OF PRODUCTS IN THE COMPETITION  • New standards  forced competitors to follow to    maintain...
KEY SUCCESS FACTORS• High flexibility, responsive to changes in preferences• Ability for repositioning  enter new segment...
MAIN STRATEGIES (MID-1990S UNTIL TODAY)Generation     Sony                                     Microsoft                  ...
MAIN STRATEGIES (MID-1990S UNTIL TODAY)  Generation        Sony                                      Microsoft            ...
DYNAMIC CAPABILITIES - THE ABILITY TO ACHIEVE NEW FORMS OF                       COMPETITIVE ADVANTAGE                    ...
CONCLUSION• Dynamic capabilities are crucial to stay competitive in this  rapidly changing industry, which is strongly sha...
GAME OVER
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Vide Game Industry - Case Linköping University

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Vide Game Industry - Case Linköping University

  1. 1. THE VIDEO GAME INDUSTRY Group No. 13 (C) BALAKI MELISSA – 870910-1227 RIKARDSSON LINUS – 891230-2018 SCHMIEDT SOFIA – 901022-3049 SCHMITT ANNE – 861006 - 4142 SAAD ANTONIO – 801110-T394
  2. 2. VIDEO GAME PRODUCTS AND CONSOLES timeline 1972 1982 1992 2002 20121th and 2nd generations 3rd and 4th generations 7th generation 5th and 6th generations Nintendo and Sega •Competitors control the supply of games •Competitors software licensing for third-party developers. Magnavox and Wii, PS3 and XBOX 360 Playstation vs XBOX Atari •Games in high definition •Use of new •Players consoles that •Merged Entertainment System standards as CD-ROMs use microprocessor- •Online playing rather than cartridges based hardware as • Human Controller Interface •Bigger library of well as cartridges •Online capabilities games containing game code. •Nintendo’s renaissance •Online capabilities
  3. 3. THE IMPACT OF NEW GENERATION OF PRODUCTS IN THE COMPETITION • New standards  forced competitors to follow to maintain cost levels • Increasing competition between different types of hardware • Mobile devices influence the home console positioning (Ipad, Smartphones, etc.) • Console Makers have to redefine their strategies
  4. 4. KEY SUCCESS FACTORS• High flexibility, responsive to changes in preferences• Ability for repositioning  enter new segments• Invention capabilities• Control of the games to capture most value (Software sales > hardware sales)  develop own games, get exclusive rights and lock them to console• Setting standards (forces competition to adapt)• Producing user friendly consoles (both for game publishers and end-users – is it really the console or the games that matters?)
  5. 5. MAIN STRATEGIES (MID-1990S UNTIL TODAY)Generation Sony Microsoft Nintendo1995-1998 Setting a new standard & ”game- - Hadn’t entered yet Price competition (path based” dependency?)1) Sony - Launched Sony Playstation - Updated to its 64-bit)2) Nintendo (architectural innovation: CD-roms -Price competition ($1993) Sega instead of cartridges  decreased compared to $299 PS) fixed costs) - Retained cartridge system  New standard (higher mf-costs) - Launched with huge nr. of games,  Stuck into old ways of doing targeted niche markets (games things? Inflexibility to change important complements) - Global distribution, strong brand (due to nr of quality games, graphics)1999-2005 Differentiation Differentiation -Launched its Gamecube , not a Launched PS 2 (better graphics, Microsoft entered in 2001 success1) Sony outperformed the PC) as a with its Xbox:2) Microsoft multifunctional entertainment 1) Technological3) Nintendo device (DVD + internet connectivity) advance,better memory, DVD - Technically complexity led to less player new games 2)The game Halo a ”key strength” 3) Online capabilities allowed online interactive gaming and downloading of games
  6. 6. MAIN STRATEGIES (MID-1990S UNTIL TODAY) Generation Sony Microsoft Nintendo 2006-2011 Technology-based (path Repositioning Reverse positioning dependency) - Xbox 360 - Launched Wii (2006) less 1) Nintendo - Launched PS 3 (even more - Not only hard core gamers, advanced, No DV-player 2) Microsoft advanced , supported Blu-ray DVD ) more focused on the - Targeted new segments (older 3) Sony -High development and launch costs multiplicity of entertainment people) ($800 , sold it for $499) and online capabilities - Reshaped the way of playing -High tech led to higher costs and (Viewing TV-shows etc) (physical and exercise) complexity of developing games  - New hand control (Innovation) forced to cut royalty -Converted its ”weaknesses” Will stick to their approaches into strenghts (technological and update PS3 and Xbox and financial resources) Path dependency?2012?Shift in devices: will smartphones take over?  start developing advanced games for smartphones?The game console as a multifunctional home entertainment device?Software sales > hardware sales  games seem to be the market- Online distribution of games instead of packaged sold by retailers  use of the cloud and online interacting gamingthrough subscriptions? Microsoft ahead?-Focusing on self-developed games? (Games today cross-platform, console makerts less powerful)Not a winner-takes-it-all industry – how to capture most value? (focus on Software?)
  7. 7. DYNAMIC CAPABILITIES - THE ABILITY TO ACHIEVE NEW FORMS OF COMPETITIVE ADVANTAGE 1986-2012Nintendo: Sony: Microsoft:1986-1991 1995-1998-2005 1999-2005Monopoly likewise Understand the importance Using old strengths to enter of developing new and adapt to a new marketenvironment → controlling qualitative games with the → advanced technologicaldevelopment & marketing “right” format→ supporting skills & online capabilities;of new games developers financially & luck? → a “hit” game technologically, combined2006-2011 with old strengths (brand image, global distribution,Flexibility and ability to advanced technologicalreposition itself: targeting skills) → creatingnew segments, simplicity of competitiveness, interest forusage & technology; sensing new console & gamesmotion controller →innovation, new experienceof gaming
  8. 8. CONCLUSION• Dynamic capabilities are crucial to stay competitive in this rapidly changing industry, which is strongly shaped by technology developments and general market trends.• Future outlook to formulate successful strategies Inside-out & Outside-in view, compatibility to supplements (games), segmentation, flexibility to market trends, high control of the games to capture most value, creativity & invention capabilities, solid technology, all related to efficiency & effectiveness.
  9. 9. GAME OVER

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