The document discusses the gaming industry in India and provides an analysis of key factors. It covers the mobile, console, and PC/online gaming segments. Mobile gaming is growing rapidly due to increasing smartphone and internet usage. Console gaming is more established but remains niche due to high costs. PC/online gaming is also growing significantly. The industry faces some challenges around infrastructure, pricing, and regional access but has strong long term growth potential. Microsoft is a major player in the industry with its Xbox console.

1. Group No 8
•
• Gaming Rajan - 60
Strategy •
•
Rishi - 64
Rohit - 65
industry in
Management
• Saurabh – 74
• Vaibhav - 90
India • Vikram - 94
• Vineet - 95
• Microsoft a key • Amit - 98
player

2. Overview
External Internal
Audit Audit

3. Overview
External environment
 Economic
Industry
 Social
 Demographic External
 Global
Competitor
 Technological Audit
 Political
Porter’s five forces model
 Threats of New entrants
 Bargaining power of
suppliers
 Bargaining power of buyers
 Rivalry of competing firms
 Threats of substitutes
Complementors

4. Economy overview- Key Indicators
GDP GDP
Lending Balance of
rate trade
Consumer Personal
spending disposable
income
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

5. Economy overview- Key Indicators
GDP Foreign
exchange
reserves
Household Business
savings confidence
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

6. Industry analysis – Gaming industry in India
The gaming industry is still at an emergent stage in India, but it promises immense
growth potential.
Major driving factors that is propelling this industry are
- High percentage of young population
- Steadily rising disposable incomes
- Rise in wireless usage
- significant rise in penetration of personal computers, mobile phones
- And a proliferation of game developers
Annual Growth Rate (CAGR) of 32.1 percent in the next five years
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

7. Industry analysis – Gaming industry in India
The gaming industry in India can be categorized into three segments –
1. Mobile gaming,
2. Console gaming
3. PC & online gaming
Demo- Techno- Porter’s
Economic Social Global Political
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8. Industry analysis – Gaming industry in India
Mobile Gaming- Current stats
The Indian mobile gaming industry, valued at USD 32.5 million, accounts for a little over 5 percent of the gross
mobile value-added service revenues in 2009.
Meanwhile, the growth rate of the telecom industry in India continued to gather momentum with over 500
million subscribers in 2009.
A steady rise in the number of wireless
subscribers along with increasing usage of data
enabled handsets is providing a strong base for
the gaming industry.
The Indian mobile gaming industry is projected to
witness a CAGR of 50.7 percent and the market is
expected to reach USD 574 million in 2016
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

9. Industry analysis – Gaming industry in India
Mobile Gaming – Future outlook & challenges
Although the mobile gaming industry is poised for a
high growth rate in the coming years, the industry is
facing some challenges
• lack of brand awareness
• spectrum shortage
• leading to congestion in the existing
infrastructure
• disagreement about revenue sharing between
telecom operators and game publishers.
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

10. Economic analysis – Gaming industry in India
Console Gaming- Current stats
Console gaming contributes the largest share of gaming revenues both globally as well as in India.
(62 percent of the market share of the total gaming revenues in 2009 )
Console gaming in India dates back to 2002 when portable
play stations and play station 2 (PS 2) were introduced in the
country. The launch of Microsoft’s XBOX in 2006 was a clear
indication that global game developers were considering
India as a significant potential market.
Demo- Techno- Porter’s
Economic Social Global Political
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11. Economic analysis – Gaming industry in India
Console Gaming – Future outlook & challenges
Prices for console games rose by 40 percent as
compared to the grey market.
This is primarily a result of
- Imposition of indirect taxes
- High customs duties
Therefore, not surprisingly, console gaming has
been restricted to the more affluent urban
population.
On the other hand , Mobile gaming is cheaper and
has the capability of evolving faster than console
gaming. With a strong telecom subscriber base and
increased penetration, mobile gaming is forecasted
to be a tough competitor for the console gaming
market in India.
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

12. Economic analysis – Gaming industry in India
PC/Online Gaming- Current stats
A rise in the usage of social networking and proper marketing of
online gaming have increased the level of user conversion to result 30
percent growth in the online gaming segment.
The size of the PC/online gaming segment in India reached USD 21.68
million in 2009, 17 percent higher than that of 2008 with a whopping
CAGR (estimated) of 37.8 percent during 2009-2014, to touch USD 110
million in 2014.
A single-player, single-session game comprises the leading category of
online games played in India that creates considerable amount of
interest to engage gamer for longer periods.
Indian gaming companies are also capitalizing on the growing trend by
introducing various gaming options in social networking portals.
Online games relating advertisement support have been one of the
major sources of revenue for online gaming enterprises in India.
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

13. Economic analysis – Gaming industry in India
PC/Online Gaming – Future outlook & challenges
Advertisement supported games provide the opportunity for corporates to create brand promotion campaigns that cater to their target
group. Multiple-player, single-session games provide the opportunity for two or more players to play against each other at the same
time. Games relating to sports and action animations typically fall under the category of multiplayer, single-session games.
Some Indian gaming companies like Zapak.com and Game on India have launched a chain of gaming cafes across metro cities and even
organized gaming tournaments in order to provide a thrilling gaming experience for experienced gamers. Thus gaming interest among the
young population in India is quite high and several gaming companies are looking to tap such huge market opportunity.
Demo- Techno- Porter’s
Economic Social Global Political
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14.  Gender emancipation
In India, traditional gender biasness is taken over by liberalization and overall culture is changing from
male dominance to competitive era.
Men and women are being employed in the same roles within a company against the earlier demarcation as
to what was a ‘woman’s job’ and what was not
Demo- Techno- Porter’s
Economic Social Global Political
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15.  Diversity
Indian has huge diversity primarily based on the 4 identities:
1. Language: People speaking different languages find it difficult to communicate effectively when
working in a group
2. Religion: Animosity or ill-feeling could stem from religious differences
3. Caste: Caste divides could make its presence felt even in the most open and diverse of workplaces
4. Ethnicity: Misunderstandings can arise among employees because of perceived ethnic stereotypes.
The holidays that one would declare could also be a cause of dissatisfaction among the employees of a
particular organization as different festivals are celebrated with varying pomp and show round the
country.
Demo- Techno- Porter’s
Economic Social Global Political
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16.  Ecology
Gamers constitute 41.2% of the total Active Internet users in India, a whopping 89% increase from the 2007, as per a
report by IAMAI.
Typical Indian Gamer A typical India gamer is a Male from the Top 8 metros, has an average age of 26 years and belongs
to the affluent SEC A
76% of total audience
is less than 35 years
of age
Demo- Techno- Porter’s
Economic Social Global Political
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17.  Ecology
Roughly 80% of gamers still come from the Top 8 metros. The top 4 metros especially
account for 59% of these gamers which indicates that availability of games and reach to
target audience is still limited.
All India
internet users
Demo- Techno- Porter’s
Economic Social Global Political
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18.  Ecology
Demo- Techno- Porter’s
Economic Social Global Political
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19.  Attitudes about quality
Gaming Genres played by Indian Gamers
Racing, Sports games and Shooting games
make up the Top 3 Genres for Gaming in
India on both Online and Console platforms.
Games such as road rash and NFS are the
most popular racing games.
• 5% enjoy role playing games
• 27% enjoy games that allow
customization
• 31% enjoy games to break monotony of
routine
• 80% of active gamers like gaming for its
socializing aspect.
• Single player games dominate the market with 80% of the active Internet using gamers playing such
games
• MMOGs form 27% of all gamers currently, up significantly from last year?s 19%, which does shows the
popularity of the MMOGs now.
• Multi Player Single Session Games constitute 63% of the Indian market.
• Road Rash and NFS (Need for Speed) are still the most popular games
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

20. Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

21. 2009
Demo- Techno- Porter’s
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22. Demo- Techno- Porter’s
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23. Demo- Techno- Porter’s
Economic Social Global Political
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24. • Tighter connection than ever between games and movies
• High profile brains coming from the movie industry to experiment
• Games now generates its own franchise
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

25. Video Games becoming an advertising channel
Burger king advergames
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

26. GAMING IS PROGRESSIVELY MOVING FROM
THE BEDROOM TO THE LIVING ROOM
Sega Mega Drive
(1989)
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

27. Product evolution
Sega 6 yrs. 4 yrs.
Sega Mega Drive Sega Saturn Sega
(1989) (1995) Dreamcast
(1999)
6 4
4 7
yrs. yrs. yrs.
yrs.
Nintendo
Nintendo Game boy Nintendo 64 Nintendo
Entertainment (1989) (1996) Gamecube
Service(1985) (2002)
Sony 5 yrs. 4 yrs.
Product life cycle is 5 years
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

28. Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

29. • 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 Structure
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

30. Components of service provides- suppliers
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

31. Dominance of veterans
1995 2000 2006
2002 2006
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

32. Rivalry amongst firms is medium, as :
Threats of New entrants as low, as :
- The industry grows slowly as they are - Industry is characterized by huge
three establishes players, that
economies of scale
compete among each other and every - capital requirements are very high
one of them try to outsell the others - increasing costs of games development
and become the market leader
and consoles manufacturing
- The rivalry is enhanced by the low - Also costly for the customers to switch to a
level of product differentiation and
new producer
the high fix costs of the manufacturing Th
of the consoles g re
at
on ms of
A m F ir Ne
lry ting w
Threats of substitutes is high, R iva pe En
tra
as : C om Five Forces nt
s Bargaining power of suppliers is medium,
as :
- biggest threat comes from
liers
computer games as As a result of the stage of
- Main reason is the crucial
importance, which their input has for
Supp
almost every family has these five forces in
the final product
Subs
one computer in urban gaming industry, the
- Costs for the input are high relatively
er of
areas industry is considered to
Thre Product
t
itute
- computer games are a show a relatively high to the total purchase
Po w
a t of
cheaper level of profitability
- Concentration of the suppliers is
relative low as as there are many
g
- Mobile phone penetration
ainin
posing a big challenge video games publisher but just three
producers of consoles
Barg
However, the lack of
s
-
multiplayer function Bargaining Power of Buyers
impairs their performance
- Moreover, gaming comes
up as a group/family Bargaining power of buyers is low, as :
activity - High cost if they want to switch to one of the substitutes
- Buyers don’t have much bargaining power
Demo- Techno- Porter’s
Economic Social Global Political
graphic logical model

33. Overview
External Audit Internal Audit
External environment
 Economic
Microsoft – Xbox
Industry
 Social
 Demographic
 Global
Competitor
• Company’s Strategy
 Technological
• New Product Development Strategy
 Political
• Market Study
Porter’s five forces model • Product life cycle
 Threats of New entrants
• Growth Strategy
 Bargaining power of
• Marketing Mix
suppliers • Challenges
 Bargaining power of buyers
 Rivalry of competing firms
 Threats of substitutes
Complementors

34. 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 Microsoft's 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
Sony's upcoming PlayStation 2, which was luring game developers away from the Windows platform.
The team approached Ed Fries, the leader of Microsoft's 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 team's idea of creating a Windows DirectX based console
• Testing
During development, the original DirectX box name was shortened to Xbox. Microsoft's 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 product
Demo- Techno- Porter’s
Strategy Social Global Political
graphic logical model

35. Competitive 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 survival

36. 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 experience

37. Valuing Customer Inputs
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!

38. 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.

39. Strategy
Acquire/ Retain
(bungie in 2000 to
get HALO games (in P
e flagship) 20 r cu rice
y th 0 5 re d w a
rsif ket ch for lo r
e a s e sse
ive ar
D m p p lli s
ric ng till
e) at

40. 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 fatigueSecured profits by not
extending product lines

41. Determining Key Success factors of Microsoft Xbox Live!
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 online chat,
 Gamers only pay costs of starter kit for the Xbox Live! Service (€52 in UK and
download games, additional levels, weapons and characters,...)
that Price covers 1 year online subscription, Headset, and Xbox communicator. )
 Safety aspect(disable downloading content)
 With special emulator programs Xbox enables to play PlayStation games.
 After 1 year automatic renewing subscription with credit card. (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
 Microsoft distributes its software products over the Xbox Live! platform
 Xbox Live! service provides a powerful word-of-mouth marketing for Microsoft exclusively for gamers to download fast, easy and safe
because players interact with each other and recommend games to play.

42. How Microsoft implemented growth strategy in the games
console arena
• 2002 : Diversification Strategy by offering a new  2006 onwards : Xbox became obsolete and replaced by Xbox360 and
product (XBOX) for a new market 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. It's created a
whole new level of two-way TV integration that's given us a brand new
growth spurt at this point in the lifecycle.
Products Products
Existing New
Existing New
Existing New
Existing New
Market Product Market Product
Product
Expansion Development Expansion Development
Development
Market
Market
Market Entry into new Market Entry into new
Development Market Development Market
(Diversification) (Diversification)
Ansoff Matrix

43. 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)

44. 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

45. Current Positioning on Perceptual Map

46. Product evolution
Xbox live Xbox+Kinect
• A sixth generation gaming console
• Microsoft acquired bungie just before (2002 )
• Online Multiplayer Gaming Service
• Voice chat , video chat
• Xbox live service was shut down for
a major upgrade. (2010)
• Launched a motion sensing(full body)
input device that enables a controller
Xbox’s launch free interactive gaming & entertainment
• Friend list upto 100 users • Adding a basic service ‘Xbox live experience
• Flagship of Halo 2 which provided a • Windows live messenger integration free’ with added features
readymade fan base which is known as • 8 million units were sold in first 60 days
‘killer app’ • In may 2009,it had 20 million subscribers • Digitized avatars were introduced that claimed Guinness books of world
base • Available at low prices ($299 records.
• A bundle of gaming console, Halo games initially & $279 in Aug 2007)
and 1 year free subscription was sold to
consumers • In partnership with Netfix , Bill
Gates announced ‘New Xbox
Xbox Xbox360
live experience’ to raise the
levels of service
(2002) (2005)

47. 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 systems

48. 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 distress

49. Observations & our recommendations
The Indian gaming industry is currently is at a nascent stage, with a marginal share of a mere 1 percent of the
global gaming industry and an 8 percent share of the outsourcing industry.
However, the gaming industry in India has proved its capability in terms of delivering quality products and has the
potential for acquiring a large domestic as well as overseas market.
- A considerable amount of increase in the number of overseas expansion of Indian companies,
- Introduction of new technologies in the gaming circuit and
- Investments from private equity funds have been major reasons for the growth of the Indian gaming industry.
The industry suffers from :
- lack of adequately skilled labor and
- the supply of talent needs to be ensured in order to further develop the gaming industry in the country.
- Tax incentives,
- government aid
- and a lowering of the import duty rate would go a long way in adding competitiveness to the industry.
The gaming segment in India is experiencing a radical shift from the use of pcs to mobiles. The success of the XBOX
360 and play stations have given the necessary impetus to the Indian gaming industry, which was passing through
a lull. With the increase in the penetration of value-added services, a further shift from pc gaming to mobile
gaming is anticipated. The key players in the gaming market are focusing on expanding the total consumer base of
the industry with offerings that may even reach out to a new customer base - such as housewives.