Sony Ps4 Strategic Management

Threat from New Entrants There are currently no new threats from new entrants in this market. Company G’s technology, testing and production process that is very efficient for profitability cannot be easily replicated.

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.

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)

In December of 2007 the merger of Activision and Blizzard was announced. Blizzard Entertainment, one of four divisions of Vivendi games, was the key ingredient for synergy between the two firms. First, an introduction to the video game software industry is pertinent. This will be followed by some discussion regarding the major trends and major players in the industry. Second, some insight will be provided on the merging companies, Activision and Blizzard. Third, the potential value of the merger will be explored, along with some analysis of the partnership. Lastly, I will give my personal views of the merger itself.

3.1.10. Management and Leadership ................................................................................. 8 Context Analysis ............................................................................................................ 8 Competitors and Industry Analysis .............................................................................. 11 Key Competitors ................................................................................................... 13 Market segmentation and target market group ..................................................... 16 Customer Analysis ....................................................................................................... 14 Collaborators ................................................................................................................ 17

According our case, there are several rivals in this industry, such as Electronic Art, Activision Inc, THQ, Take Two Interactive Software Ink, Midway Game Inc. Moreover, as we know, some companies which produce game-playing device, like Sony, Microsoft, Nintendo, also create their own game with in-house staff, in this industry

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.

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

Access to new technologies - Most of the domestic players in this industry remain updated to the current trends with their own technology or obtain them through Acquisitions / Joint Ventures / Mergers with the global players.

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

The bargaining power of suppliers for this industry is Low to Medium. Nintendo, Sony, and Microsoft respectively, are the world’s largest players in the video game industry (Euromonitor, 2014). With their sizes, these companies create bidding wars between suppliers for their business lowering the power that suppliers hold. The ability for suppliers to bargain simply on technology is weak, however the price is another matter. For example, the Xbox One costs $471 with a retail price of $499, giving it little room for profit

|the industry and its challenges it is important to understand its various phases of growth so far. |

Back in 2002, Sony geared themselves toward a vertical strategy as reported by Rob Weisenthal, VP and CFO of Sony Corp. of America, “Under the USA umbrella, we undertook a number of vertical initiatives for each operating division. These have already produced significant operational streamlining and financial performance improvements.” As discussed in his release, Weisenthal talked about Sony Pictures Entertainment and their strategy to restructure television operations, where core programming competencies were focused on. Film and television digitalization efforts have been expanded and have engineered a significant reduction in their corporate overhead. In addition, he mentionted that Sony Music has made long

The possibility that there will be a new entrant into the game -console industry is

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