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Essay on Week 5 “Case Analysis: Video Game Console Industry in 2012”

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Week 5 “Case Analysis: Video Game Console Industry in 2012”
Grantham University BA490
Business Policy and Strategy

Case Analysis: Video Game Console Industry in 2012 Page 1
Executive Summary 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
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That would be 15% lower than 2011. Meanwhile, two of the biggest movements in games—the rise of social and mobile gaming—were pioneered not by the establishment but by outsiders like Apple, Facebook, and Zynga. (WARREN, J. (2012). Based on research, timing is critical for a new entry into the video game console industry. A console start-up must wait for current console giants: Microsoft and Sony gaming consoles to age to the point where interest drops. This drop in interest can be an “opening” a start-up needs to jump-in prior to Microsoft and Sony releasing new consoles. So, the statement of the problem would be when to enter the video game console industry.
Causes of the Problem 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
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