Situation Analysis For Microsoft Xbox

After the acquisition of EB Games, GameStop rose as the leading video game retailer in its industry. In an effort to sustain their position, GameStop will have to tackle several technological and sociocultural issues that have arisen from its competitive environment. The strategic objective we wish to accomplish in this analysis is to formulate a viable strategy that will continue GameStop’s growth in the industry to remain as the go to video gaming store for the video gaming enthusiast.

In order for Microsoft to become the leader in the console industry, it is critical to know the kind of consumers that are going to be targeted. According to the Fundamental Marketing article by Isaiah King, the target market for Microsoft Xbox users focuses on three main components: demographic, psychographic, and behavioral (Fundamental Marketing 1). The demographic of Xbox users range from age, generation, and gender. The hardcore gamers age group range from 16 to 30 years old. However, generation plays a huge role in the demographics of the console. Students of 18 years and younger are aimed highly more than older people, as they are leaders of the digital innovation. This variable of the demographic is important, as this age group will be the future industry in new products.

The five forces that drive industry competition, a model established by Michael Porter, are; threat of substitution, threat of new entrants, bargaining power of suppliers, bargaining power of buyers, and intensity of rivalry. The video game industry must deal with all five of these forces. The analysis of the strength of these five forces within the video game industry will help to draw a conclusion as to whether or not it is an attractive industry for Sony to be in.

The role of technology is vital in this industry as it focuses on technological efforts for competitive advantage. Every new development uses new technology. Though there are restricted innovations in the gaming industry, the speed of technological transfer is very high. Nintendo’s role from playing cards to toys to video games and then with each console introduced, included many technological changes. Technological up gradation increased hardware costs and discouraged innovation. The online capability of Nintendo Wii was a major change in the technology of the video game industry though they were not able to do as well as their competitors (Sony, Microsoft).

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.

Suppliers are also working on advances for and are selling their products to competitors as well. Without the suppliers the video game industry would struggle. On the other hand the individual companies do have some ability to develop their and manufacture their own products and technologies. Because of this the bargaining power of suppliers plays a moderate role in the industry.

The network effects in the video game industry are derived from the console system that is sold to consumers. If a company is able to increase penetration in this arena, though at-cost/ below-cost pricing or pull created through the development of desirable content, it can potentially lock in the added value of the video games sold for the system. Which is to say, the console locks-in the network effects in the industry and the games serve to reap the profits. The video games, however, may present something of a challenge in that they can be somewhat easily replicated by competitors. Nintendo used an encrypted chip system to reduce this possibility.

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

In terms of the product itself, Xbox One has many features that it can use to its advantage in distinguishing itself from other gaming systems, as well aiding its ability to attract many customers. For example, the Xbox has many apps such as Netflix, Google, and ESPN, which the console owner can use whenever they want (even during the middle of a gaming session). Cable and Satellite television services can even be connected through the Xbox in order to enhance the consumers’ experiences and to create an all in one system. Additionally, the Xbox brand is known for many of the great games only offered with the Xbox experience, making it a more alluring choice.

Section 1: A Synopsis and interpretation of the Supply chain changes made between Xbox and Xbox 360 by Anand Kangala

Microsoft is trying to establish the Xbox One as the video game console leader in the Video Game Industry. The Xbox One is a third generation video game console for Microsoft. The video game industry continues to have steady growth. However,

The XBOX is now a 6th generation video game console that is manufactured by Microsoft. The machine itself was released in November of 2001, just in time for the 2001 Holiday Season in the United States, then subsequently worldwide. The decision to manufacture and release the system was Microsoft's first plunge into the gaming console market and designed to compete with the Sony PlayStation 2, Nintendo's GameCUbe, and Sega's Dreamcast. By November of 2002, Microsoft launched the Xbox Live service that allowed players to play interactive games online (Gamer's Catch, 2006). Looking at the evolution of the system, however, we now know that the Xbox began to be discontinued in late 2005 (in Japan) and then in early 2007 in North America. The last game was released in August 2007, and even support for out-of-warranty consoles was discontinued in 2009, with all new faulty consoles replaced with Xbox 360. Xbox Live support was discontinued in April 2010 (Whitten, 2010).

Overall, the market response to these three consoles has been surprising. Nintendo Wii, has outsold its rivals and more surprisingly, Sony’s PS2 has outsold PS3. This has let Microsoft and Sony with the enormous challenge of competing with a rival possessing two key advantages: a lower cost console and a product with a sound response in the market.

• 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 video game console industry is a very competitive segment. This segment requires a keen eye on product development as well as strategic product marketing and a rather large logistics arm to ensure rapid distribution to targeted areas. Video game industry in the US, which is hugely driven by retail sales of software and hardware, registered revenues of USD ~ million in CY'2012. Even so with the advent of new video game players in the industry, the revenues decreased by 11.7% compared to