Case 11 - Video Game Consoles Industry Discussion

1530 Words Nov 2nd, 2011 7 Pages
Case 11 - Competition in Video Game Consoles: The State of the Battle for Supremacy in 2008


1. What are the strategy-shaping business and economic characteristics of the console segment of the video game industry? What is the industry like?

The video game industry is the economic sector involved with the development, marketing and sale of video games. It encompasses dozens of job disciplines and employs thousands of people worldwide. It includes video game consoles, game software, handheld devices, mobile games and online games. Console is the largest segment in the industry, but online, mobile and broadband are some of the fastest growing segments. In recent years, the video gaming industry has been growing
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The following are the driving forces that govern the video game industry that have been behind the change and evolution of the industry over time-

- Technological Change: Technology in the industry is constantly changing, producing successive generations of increasingly powerful systems, typically at lower costs.

- Product Innovation: The software development side of the industry is increasingly becoming a business of risky bets on individual software titles that are hoped to be significant hits. The large number of developers has resulted in a continuous production of highly innovative products.

- Changes in the personal computer industry: As a significant substitute for consoles, the lower cost and increasing performance of home computers can eventually threaten the industry.

- Changes in the industry’s consumers: Although video game hardware has largely appealed to adolescent males, changes may occur, which cause the demographics of the industry’s customers to expand to young adults and women in general.

- Changes in the mobile industry: Mobile devices are changing the landscape of many industries e.g. music, camera, GPS, games etc. and is rapidly becoming one-device fits-all. As technology advances, this will have significant impact on handheld gaming consoles.

4. What does your strategic group map of the video game industry (all segments) look like? Which strategic groups do you think are in the best
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