Responding to Wii

9358 WordsJul 9, 201638 Pages
9-709-448 REV: JANUARY 4, 2010 ANDREI HAGIU HANNA HAŁABURDA Responding to the Wii? Kazuo Hirai, chief executive of Sony Computer Entertainment Inc. (SCEI), had just gotten off a conference call with journalists. It was late August 2008, and the reporters were inquiring about Afrika, a new safari videogame for Sony’s PlayStation 3 (PS3) console that allowed players to watch wild animals and take virtual pictures. Hirai could not help feeling frustrated. Most of the conversation—like many others with Sony outsiders in the past month—had revolved around two questions: Was Afrika Sony’s answer to the casual games that were partly responsible for the runaway success of rival Nintendo’s Wii videogame console? And more generally,…show more content…
This document is authorized for use only in Principles of Strategic Management July 2016 by Dr Paul Spee, University of Queensland Business School from June 2016 to August 2016. 709-448 Responding to the Wii? Market Birth, Collapse, and Rebirthb The videogame industry got off to an uncertain start in 1972, when television maker Magnavox introduced Odyssey, the first home videogame console. Priced at $100 (the equivalent of $516 in 2008 dollars),c Odyssey needed a television screen to project its very limited action. The system came with 12 games, including versions of tennis and ping pong, each on a printed circuit board.5 However, partly due to some uninspired marketing and distribution decisions, Odyssey’s appeal proved limited. Magnavox sold more than 100,000 game systems by year-end, but sales quickly declined and Odyssey was pulled from the market.6 Enter Atari Around the same time, a young entrepreneur named Nolan Bushnell was developing arcade games with the use of then-new microprocessor technology.7 In 1972, the company he started, Atari, launched its first hit game—an arcade version of ping pong.8 In Pong, two players batted a ball of light back and forth between on-screen paddles. The game instructions were simple: “Avoid missing ball for high score.”9 Pong was an immediate success: 8,500 arcade consoles were sold in the first year.10 Bushnell
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