3 Do

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3 Do

  1. 1. 3DO Power Play: 3DO in 32-bit Video Games By: Christina Connolly
  2. 2. competitive analysis 1994 Nintendo Sega 3DO Market Share 45% 45% 7% Retail Price $250 $400 $700 Net Sales $4.7B $4B $21M Virtual Reality First CD-ROM Special Offerings Super FX Chip Theme Parks system
  3. 3. competitive 800 700 layout 600 500 Retail Price 400 300 200 100 0 Nintendo Sega 3DO 0.0300 0.0700 5.0 Ninten Sega 0.4500 4.5 3DO Others 4.0 0.4500 3.5 3.0 Net Sales 2.5 2.0 1.5 1.0 0.5 0 Nintendo Sega 3DO
  4. 4. product lifecycle • 1994 video game industry • CD Rom systems
  5. 5. impact of profitability Threat/Power Gaming Industry Competitive Intensity High Low Bargaining power of Suppliers Bargaining power of Customers Threat of New Entrants Threat from Substitutes Profit
  6. 6. perceptual map Popularity (market share) High Retail Price Low High Low
  7. 7. value chain 3DO Console Game Manufacturers Developers Distribution Retail Gamer
  8. 8. the situation 3DO is a laggard entrant into the video game industry. While they are attempting to be first to market with premiere technology, their competitors are using the same technology as an upgrade, undercutting 3DO in cost and capitalizing on their popularity
  9. 9. product and dilemmas  Launching an expensive product in a capitalized market while larger players are offering comparable upgrades at a fraction of the cost  Disjointed production system  Single port console  5 button controller
  10. 10. consumer and dilemmas  Young demographic with minimal disposable income  Loyalty to larger market players  Demand Side Increasing Returns  Popularity of a console hold great value within each social network
  11. 11. technology and dilemmas  Introducer of CD-ROM consoles  First time video consoles can be used for more than just games  Pictures  Videos  Licensing of manufacturing and game development  Required no accountability of quality  Laggard to market, leading to decreased efficiency and high retail cost  Lack of accountability led to sub-par game publishing  Inferior graphics  Generic Soundtracks
  12. 12. partnering and dilemmas  Retail  Panasonic  Manufacturing  Matsushita  AT&T  Sanyo  Toshiba  GoldStar  Samsung  300 Software Developers  Widespread licensing led to a competition among the partners and a lack of accountability for quality of the product
  13. 13. business model “that is missing one part” Trip Hawkins’ initial goal: Console Concept Required Technology Hawkins: (Dave Needle) “my goal is to be out to Game market first” Development (independent Gamer developers)
  14. 14. business model issues • no contract of mutual expectations Game Development • no quality requirements (independent developers) • no time pressure Console Concept • missing a piece, and no formal agreements to fill it Required Technology (Dave Needle) • entering an already competitive market Hawkins: “my • requires the consumer to be the test market goal is to be out • limits market research to market first” • increases likelihood of error • may decrease quality of product • The gamer is paying premium costs for minimal Gamer consideration
  15. 15. suggestions  Adapt to market trends  Multi-player console  6 button controller  Maintain control over product  Licensing standards  Focus on efficiency (as opposed to speed)  A product is only useful if consumers will use it  Decreased retail price  Marketing  Capitalize on consumer identity to produce brand loyalty
  16. 16. Sources  quot;Essays.cc - Nintendo.quot; Free Essays, Cliff Notes & Term Paper Database. 21 Mar. 2009 <http://www.essays.cc/free_essays/b2/iev101.shtml>.  quot;Game Genre Lifecycle: Part I.quot; Lost Garden. 21 Mar. 2009 <http:// lostgarden.com/2005/05/game-genre-lifecycle-part-i.html>.  quot;Power Play (C): 3DO in 32-bit Video Games.quot; Harvard Business School (1995): 1-9.  quot;The Video Game Critic's 3DO Console Review Page.quot; Video Game Reviews by the Video Game Critic. 21 Mar. 2009 <http://www.videogamecritic.net/ 3doinfo.htm>.

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