Nintendo's Wii Strategy

Nintendo’s strategy for pricing of consoles and games was to lock-in the network effects consoles offered by pricing them at- or below- cost and reaping profits by pricing video games at significant margin. Nintendo took these actions because it knew that if consumers used the NES/ Famicom console, they would be a captive audience for its higher-margin video games which were necessarily more perishable from a consumer taste perspective. This affected the value created by

However, GameStop is still at a disadvantage, because there are such a large number of competitors in the industry. Buyer’s bargaining power are high, since there is no brand loyalty in the industry. Customers are very well aware of the market price of a product and will look for the best deals they can find. Suppliers have high bargaining power since suppliers can choose to integrate forward and sell their products themselves. The success of the retail gaming industry is very dependent on the availability of supplier’s goods. Additionally, since there are low barriers of entrance, substitute products and new entrants often appear in the market. Since most competitors in the industry do not have a strong presence, the expected retaliation towards new entrants is low. An increasing popularity of smartphone games and social media games such as Farmville on Facebook, allows customers to play against friends. Although these social media games do not offer the same experience as a video game, the fact that virtually no switching cost is associated with switching to a competitor’s game and since they are so cheap compared to video game disk and consoles, can easily drive customers from video gaming to online gaming. (Exhibit 2)

Video games are an ever-growing franchise that is constantly undergoing change. Ever since the dawn of video games, new consoles, games, developers, and teams have come together, fallen apart, triumphed, and failed. What is it that has allowed some to thrive where others failed? Several different factors have changed and influenced the world of gaming, including the history that is continuously being written, the people who have built the games behind the scenes, and, of course, the actual video games themselves. Numerous video games have been more successful than others, but identifying what components set the successful apart from the unsuccessful is something definitely worth observing.

• Every company produce video game for different consoles, consoles are developed new generations fast, game developer should compete to gain license for new generation console.

The lifestyle of a hardcore gamer is to be antisocial around human beings, but through the connectivity of the Internet to be social and build friendships and relationships through video games. Xbox has created a live chat while playing video games to verbally speak to the gamers or instantly chat. The social class gamer is divided by the income category that they fall on. Upper and middle class have the ability to spend money on new consoles in the gaming industry, while the lower class does not have the funds to invest in all of the new consoles that are released. The most important key point of the demographic component is the behavior of a gamer. It is important to have a strategic target plan for any new consoles; however, behavior gamers are the marketing targets to any new innovation. Behavior gamers are the most loyal consumers and it has a significant amount of the profitability to the company. As a result, the three different components makes up the target market and is very crucial to be strategic with the plan and know the potential

Taxation rises may affect the price of games meaning less people may but their games

To attempt counteract this cyclical slowdown, EB games have introduced an ever-growing variety of accessories with games to increase the revenue raising capacity of their respective consoles, as well as maintaining the loyalty and attention of a fickle gaming public. Some types of games have been released, with specialty controllers to great success, mitigating the expected lull in sales in the lead-up to new consoles. Recently however, the competition has become slightly skewed. Nintendo’s newfound dominance of the market is causing some headaches for Sony and Microsoft.

In the author Kate Grey she proposes the question ”Nintendo Switch: can the new console succeed where Wii U failed?”. In this question she expresses that the switch could improve what the Wii U failed at. “The graphical capability on the Switch finally matching Sony and Microsoft’s consoles?” (Gray). This poses the questions That proves that Switch can have graphics machine Microsoft and Sony graphics.

The video game industry is the economic sector involved with the development, marketing and sale of video and computer games. It includes video game consoles, game software, handheld devices, mobile games and online games. The video gaming industry has been growing exponentially in recent years with Sony, Microsoft and Nintendo competing for the higher profits in the market. This essay will analyze each of the five forces acting on the industry: threat of new entrants, threat of substitute products or services, bargaining power of buyers, bargaining power of suppliers, and the competitive rivalry among existing firms. Then it will be determined if the video game industry is still an

Intensity of Rivalry Among Competitors: In the video game industry, this is a very strong force. For years in the industry no one company could hold the most popular console for more than one consecutive generation. The rivalry among competitors is very strong. Each holds its own powerful brand identity, and Sony, Microsoft, and Nintendo all want to be leaders in the industry. They each may have their different approaches

Both Sony and Microsoft focused their efforts on hard-core gamers and offering processing power and cutting-edge features to attract them. On the other hand, Nintendo has been trying to attract new customers that traditionally are non-gamers. The

EPOC will gain more profit if it is console-enabled only, when compared with PC-enabled only. The retail sales console game is almost five times more than PC game as we can see from Exhibit 8 in this case. The retail sales of console software game is 6.6 billions of dollars, but PC is only 0.9 billions of dollars in 2007. Moreover, from this exhibit, we can see that the number of PC software game retail sale is decreasing year by year, from 1 billions of dollars to 0.7 billions of dollars in 4 years. Most of consumer purchases a

* Quality of graphics and the power of processors has lost its importance Wii more successful than PS3 despite its underpowered processor and comparatively basic graphics

Finally new online companies are creating new games that do not need a console so they can be played easily, anytime and anywhere. This factor affects our sales dramatically because our product might be seen as old fashion.

The main obstacle facing a start-up video game console company from entering the industry is saturation of the market from the larger video game console makers or the “big three” Nintendo, Microsoft, and Sony. The big three tend to release new game consoles around the same time frame and compete head to head for sales. During the time frame it is impossible for a new entry to jump into the fray. 2010 was a banner year for video console sales Sony’s PS3 sold 14 million units followed by Microsoft’s Xbox 360 13 million and surprisingly Nintendo’s Wii led the big three selling 17 million units. After the 2010 release of all three consoles sales started to decline for each company. Nintendo took the largest sales loss at 72% in 2013 only 747,000 were sold compared