Analysis of Video Game Systems
The consumer video game systems offer an exciting opportunity to discuss and analyze the design of technology based on the strategy of each of the players within the industry. We will focus our analysis on the next generation of video consoles: Nintendo’s Wii, Microsoft’s Xbox 360 and Sony PlayStation 3 (PS3).
First, we will analyze the targeted customer and the proposition designed by each company to attract them. In this part, there is a description of each market target and how each company has taken advantage of each unique position in the industry.
In the second part, we will describe the technology developed to support each strategy. As well as the cost of the components associated with each strategic technology unit that aims to deliver a differentiated proposition and increase it’s value. A cost breakdown structure and the results in sales and revenue are studied in this section.
Finally, we provide some insights of the industry and study in detail how the current trends can be reversed or strengthened by reduction in costs and adapting the cutting edge-technology to a better customer experience.
The pace of the industry, where customer demands of a wider range of games is increasing and the threat of Sony’s leadership by a company like Nintendo, will definitively be interesting to follow as new technological features are unveiled to enhance customer experience. These features are the key to success within this sector.
The video game industry is valued in $USD 9.5 billion in 2007. The main players in the industry Sony, Microsoft and Nintendo are competing to grab the biggest market share. Each one of them has recently introduced new consoles aimed to set themselves apart from their competitors. This paper will analyze the technology of each of the consoles and how it has supported the innovation needed to make the breakthrough product in this highly competitive market.
Target Customers and Industry Proposition.
Microsoft introduced the new console (Xbox 360) one year before Sony, the industry leader, unleashed the PS3. Microsoft with the first mover advantage built a large customer base and has the largest library of games. The PS3 console has the best raw power and blue-ray capabilities. Nintendo, although with the less advanced console (Nintendo Wii), has successfully distinguished itself from their competitors with an innovative controller whith motion-sensor capabilities.
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...