INTRODUCTION

Video game console

A video game console is an interactive entertainment computer or electronic

device that manipulates the video display signal of a display device (a television,
monitor, etc.) to display a game. The term video game console is used to
distinguish a machine designed for consumers to buy and use solely for playing
video games from a personal computer, which has many other functions, or
arcade games, which are designed for businesses that buy and then charge
others to play.

The "video" in "video game console" traditionally refers to a raster display device.
[1]
However, with the popular use of the term "video game" the term now implies
all display types and formats. The term "console" is used in the user manuals of
several early video game systems. Its use, however, is not synonymous with
"video game system" or the same as its modern usage. It refers to a specific part
of the video game system. The Atari 2600, NES, and other consoles from those
decades were called "video game systems" at the time.

The first company to use the term "console" to officially refer to its video game
system was Fairchild with the Video Entertainment System (VES) in 1976.

Elements of a Video Game Console

Controllers: Video controllers allow the user to input information and interact
with onscreen objects.

Power supply: a power supply converts 100-240 volt AC utility power into direct
current (DC) at the voltages needed by the electronics.

Console/Core Unit: The core unit in a video game console is the hub where the
television, video game controllers, and game program connect. It usually
contains a CPU, RAM, and an audiovisual coprocessor.

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Game Media: Most video game consoles have their programs stored on external
media.

The video game industry (formally referred to as interactive

entertainment) is the economic sector involved with the development, marketing
and sale of video and computer games. It encompasses dozens of job disciplines
and employs thousands of people worldwide.

Overview

Once a niche market and considered by some as a curiosity in the mid-1970s,

the computer and video game industry took in about USD$7.1 billion in the US in
2005 (ESA annual report). However, contrary to popular belief, the video game
industry is not "bigger than Hollywood"; while video game sales have exceeded
the film industry's annual box office[1], Hollywood generated $31 billion in total
1999 revenue.[2]

The modern computing world owes many modern computing innovations to the
game industry. The following computing elements owe their lineage and
development to the game industry:

• Sound cards: developed for addition of digital-quality sound to games.

Later improved for music and audiophiles.
• Graphics cards and 3D graphic accelerators: were developed for graphical
user interfaces (GUIs) and games. GUIs drove the need for high
resolution, games drove 3D acceleration. They also gave one the
opportunity to use SLI or CrossFire graphics cards, or two graphics cards
in one computer.
• CD ROM drives: were developed for mass distribution of media in general,
however games use is probably instrumental in driving their ever higher
speeds.
• Joysticks were developed mainly for playing games.

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 • Unix: developed, in part, so that the programmers could play a space
traveling game.[3][4]

In addition, many of the higher powered personal computers are purchased by

gamers who want the fastest equipment to power the latest cutting-edge games.
Modern games are among the most demanding of applications on PC resources,
so the latest hardware is often targeted at this sector likely to purchase and make
use of the latest features. Thus, the inertia of CPU development is due in part to
this industry whose applications demand faster processors than traditional
applications.

Disciplines

The game industry employs those experienced in other traditional businesses,

but some have experience tailored to the game industry. For example, many
recruiters target just game industry professionals. Some of the disciplines
specific to the game industry include:

• Game programmer
• Game designer
• Level designer
• Game producer
• Game artist
• Game tester

Most of these professionals are employed by video game developers or video

game publishers. However, many hobbyists also produce computer games and
sell them commercially.

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History

William Higinbotham, a scientist, created "Tennis For Two" in 1958. It was never
commercially released because it wasn't an actual video game. It was meant to
be an electrical experiment.

By the late 1970s, the computer game industry formed from a hobby culture,
when personal computers just began to become widely available. The industry
grew along with the advancement of computing technology, and often drove that
advancement. Today, the video game industry is a juggernaut of development;
profit still drives technological advancement which is then used by other industry
sectors. Though maturing, the video game industry is still very volatile, with third-
party video game developers quickly cropping up and, just as quickly, going out
of business.

In Asian countries, notably Japan and Hong Kong, the video game medium did
not reach major popularity on a mass scale until the arrival of the manga series
Game Center Arashi in the late 70s.[citation needed] The series helped the public
understand the possibility of the product and the entertainment value at the
cultural level.

Economics

The video game industry is currently facing financial strains[citation needed] as it

attempts to fairly compensate its talent, while continuing to turn a profit. The
result is that the game developer—the traditional source of new games—is
essentially dying out or is being incorporated into large publishers.[citation needed] The
game industry is currently experiencing a phase of consolidation and vertical
integration as a reaction to spiraling costs.[citation needed]This climate has also given
birth to vibrant indie game developers comprising tiny companies trying to use
the internet rather than traditional retail channels to reach an audience.

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Early on, development costs were minimal, and video games could be quite
profitable. Games developed by a single programmer, or by a small team of
programmers and artists, could sell hundreds of thousands of copies each. Many
of these games only took a few months to create, so developers could release
several titles each year. Thus, publishers could often be generous with benefits,
such as royalties on the games sold. Many early game publishers started from
this economic climate, such as Origin Systems, Sierra Entertainment, Activision
and Electronic Arts.

As computing and graphics power increased, so too did the size of development
teams, as larger staffs were needed to address the ever increasing graphical and
programming complexities. Now budgets can easily reach millions of dollars,
even if middleware and pre-built game engines are used. Most professional
games require one to three years to develop, further increasing the strain on
budgets.

Some developers are turning to alternative production and distribution methods,

such as online distribution, to reduce costs.

Practices

Video game industry practices are similar to those of other entertainment

industries (e.g. the music recording industry), but the video game industry in
particular has been accused of treating its development talent poorly. This
promotes independent development, as developers leave to form new
companies and projects. In some notable cases, these new companies grow
large and impersonal, having adopted the business practices of their forebearers,
and ultimately perpetuate the cycle.

However, unlike the music industry, where modern technology has allowed a fully
professional product to be created extremely inexpensively by an independent
musician, modern games require increasing amounts of manpower and

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equipment. This dynamic makes publishers, who fund the developers, much
more important than in the music industry.

Breakaways

A particularly famous case is the "original" independent developer Activision,

founded by former Atari developers. Activision grew to become the world's
second largest game publisher.[citation needed] In the mean time, many of the original
developers left to work on other projects. For example, founder Alan Miller left
Activision to start another video game development company, Accolade (now
Atari née Infogrames).

Activision was popular among developers for giving them credit in the packaging
and title screens for their games, while Atari disallowed this practice. As the
video game industry took off in the mid-80s, many developers faced the more
distressing problem of working with fly-by-night or unscrupulous publishers that
would either fold unexpectedly or run off with the game profits.

Economics

Economic problems remain today with regard to publisher-developer contracts

(see copyright: transfer of rights). Typically, developers receive around 20% of
royalties, and the rest goes to the publisher.[citation needed] Rather than dividing
royalties, many publishers buy the development studio outright. Some
developers begrudge the tendency for the studio's original management to leave
in the wake of a buyout, while the remaining employees try to finish the project
only to be shut down after a few years. These buyouts often result in a big push
to finish video game projects in time for the holiday purchasing season, and
transfer of creative control to the publisher.

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Creative control

Some people disapprove of publishers having creative control since they are
more apt to follow short-term market trends rather than invest in risky but
potentially lucrative ideas. On the other hand, publishers may know better than
developers what consumers want. The relationship between video game
developers and publishers parallels the relationship between recording artists
and record labels in many ways. But unlike the music industry, which has seen
flat or declining sales in the early 2000s, the video game industry continues to
grow while producing both low-quality, unoriginal games, and innovative and
popular titles such as the Grand Theft Auto series and The Sims series. Also,
personal computers have made the independent development of music almost
effortless, while the gap between an independent game developer and the
product of a fully financed one grows larger.

In the computer games industry, it is easier to create a startup, resulting in many

successful companies. The console games industry is a more closed one, and a
game developer must have up to three licenses from the console manufacturer:

1. A license to develop games for the console

2. The publisher must have a license to publish games for the console
3. A separate license for each game

In addition, the developer must usually buy development systems from the
console manufacturer in order to even develop a game for consideration, as well
as obtain concept approval for the game from the console developer. Therefore,
the developer normally has to have a publishing deal in place before starting
development on a game project, but in order to secure a publishing deal, the
developer must have a track record of console development, something which
few startups will have.

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Alternatives

An alternative method for publishing video games is to self-publish using the

shareware or open source model over the Internet. However, it remains to be
seen whether freely made and distributed games can survive in the era of multi-
million dollar productions.

Japanese video game industry practices

The Japanese video game industry is markedly different from the industry in the
US and Europe.

Generally, games occupy greater cultural attention in Japan than the U.S., and
its market share of total entertainment in Japan is higher than the U.S. Voice
acting was implemented in Japanese games several years before American
games.[citation needed] Japan has created some of the largest and most expensive
titles ever made, such as Final Fantasy and the Metal Gear Solid series of
games.

Arcades

Video game arcades are still relatively popular in Japan; for every arcade game
released in the US, nine are released in Japan.[citation needed] The history of the
Japanese arcade is very significant in the story of the decline of the American
arcade, and in the shape of game design in general. In particular, the arcade
scene in Japan has caused them to lag behind in the field of sound effects and
sound design, because this is less important in an arcade. For example, a
modern game like Tekken 4 still uses 16 kHz samples like the original arcade
release.

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Media

Consoles and arcade games are the main media for Japanese game design; PC
games are nowhere near as popular. This necessarily dictates that there are
fewer independently developed games coming from Japan, as it is far harder to
develop independently for a console than it is for a PC.

Development environment

The structure and culture of a Japanese game developer is far different from a
western one. Throughout the history of Japanese game design, many developers
have seen fit to remain mostly anonymous, even using pseudonyms to a large
degree in video game credits.

Also, the division in labor for video game development is far different. For
example, Japanese game design teams had a dedicated designer, (which they
called a "director") far earlier than American design teams adopted the practice.
Yet it was clear that even with this centralized design process level designers
and character designers were given a lot of leeway to work within their
boundaries as much as possible. For example, almost every level in Super Mario
Bros. 3 has new gameplay concepts within it.

Secondly Japanese game designers throughout history generally had far more
people working on a particular game then a comparable western design team.
For example, Mortal Kombat, an American title, was developed by four people: a
programmer, an artist, a musician, and a background artist. Street Fighter 2, a
comparable Japanese title, had almost one artist working on every character in
the game, plus two programmers, plus a musician with the result being a team of
twenty or more people.

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History of video game consoles (first generation)

Interactive television

Television engineer Ralph Baer conceived the idea of an interactive television

while building a television set from scratch for Loral in 1951 in the Bronx, New
York. He explored these ideas further in 1966 when he was the Chief Engineer
and manager of the Equipment Design Division at Sanders Associates. Baer
created a simple two-player video game that could be displayed on a standard
television set called Chase, where two dots chased each other around the
screen. After a demonstration to the company's director of R&D Herbert
Campman, some funding was allotted and the project was made "official". In
1967 Bill Harrison was brought on board, and a light gun was constructed from a
toy rifle that was aimed at a target moved by another player.

A simulation of Tennis for the Magnavox Odyssey, without overlay

Bill Rusch joined the project to speed up development and soon a third machine-
controlled dot was used to create a ping-pong game. With more funding
additional games were created, and Baer had the idea of selling the product to
Cable TV companies, who could transmit static images as game backgrounds. A
prototype was demonstrated in February 1968 to Teleprompter Vice President
Hubert Schlafly, who signed an agreement with Sanders. The Cable TV industry
was in a slump during the late 60's and early 70's and a lack of funding meant
other avenues had to be pursued. Development continued on the hardware and
games resulting in the final "Brown Box" prototype, which had two controllers, a

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light gun and sixteen switches on the console that selected the game to be
played. Baer approached various U.S. Television manufacturers and an
agreement was eventually signed with Magnavox in late 1969. Magnavox's main
alterations to the Brown Box were to use plug-in circuits to change the games,
and to remove the colour graphics capabilities in favour of color overlays in order
to reduce manufacturing costs. It was released in May 1972 as the Magnavox
Odyssey.

History of video game consoles (second generation)

Early 8-bit home consoles (1976-1983)

The earliest console, the Magnavox Odyssey, had used removeable cartridges
that were nothing but glorified jumpers to activate the games already wired in to
the console. This method was soon replaced during the move to PONG
consoles, where the logic for one or more games was hardcoded into microchips
using discrete logic, and no additional games could ever be added. By the mid-
1970's cartridges had returned with the move to CPU based consoles. With
games now consisting of microprocessor based code, these games were burned
onto ROM chips that were mounted inside plastic cartridge casings that could be
plugged into slots on the console. When the cartridges were plugged in, the
general-purpose microprocessors in the consoles read the cartridge memory and
ran whatever program was stored there. Rather than being confined to a small
selection of games included in the box, consumers could now amass libraries of
game cartridges.

The Fairchild VES was the world's first CPU based video game console,
introducing the cartridge based game code storage format. It was released by
Fairchild Semiconductor in August 1976. When Atari released their VCS the next
year, Fairchild quickly re-named it to the Fairchild Channel F.

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In 1977, Atari released its CPU based console called the Video Computer
System (VCS), later called Atari 2600. Nine games were designed and released
for the holiday season. It would quickly become by far the most popular of all the
early consoles.

In 1978 Magnavox released its CPU based console, the Odyssey 2, in the United
States and Canada. Philips Electronics released this same game console as the
Philips G7000 in many European countries. Although it never became as popular
as Atari, it managed to sell several million units through 1983.

In 1979, Activision was created by disgruntled former Atari programmers. It was

the first third-party developer of video games. Many new developers would follow
their lead in succeeding years.

The next major entry was Intellivision, introduced by Mattel in 1980. Though
chronologically coming long before the "16-bit era", the Intellivision had a unique
processor with instructions that were 10 bits wide (allowing more instruction
variety and potential speed), and registers 16 bits wide. The system rocketed to
popularity alongside the 2600.

Though not the first system to challenge Atari, it was the first to pose a serious
threat to Atari's dominance. A series of Intellivision TV ads featuring George
Plimpton mercilessly attacked the Atari VCS's lesser capabilities with side-by-
side game comparisons. Nevertheless, Atari held exclusive rights to most of the
popular arcade game conversions of the day, and used this key segment to
support their older hardware in the market. This game advantage and the
difference in price between the machines meant that each year Atari sold more
units than Intellivision, lengthening its lead despite inferior graphics. This need for
price parity has influenced every console war since.

Unique among home systems of the time was the Vectrex, the only one to
feature vector graphics and its own self contained display.

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1982 saw the introduction of the Colecovision, an even more powerful machine.
Its sales also took off, but the presence of three major consoles in the
marketplace and a glut of poor quality games began to overcrowd retail shelves
and erode consumers' interest in video games. Within a year this overcrowded
market would crash.

Video game crash of 1983

The video game crash of 1983 was the year long crash of the video game
industry and the bankruptcy of a number of companies producing home
computers and video game consoles in North America in late 1983 and early
1984. It brought an end to what is considered the second era of console video
gaming.

The crash was followed by a gap of two years, during which there was no
significant development for video game consoles. That gap ended with the
success of the Nintendo Entertainment System (NES) that was first introduced in
Japan in 1983 (as Famicom) and then in the United States in 1985 and would
break out in popularity in 1987.

This period is sometimes referred to as the video game crash of 1984, because
that was the year the full effects of the crash became obvious to consumers.
Hundreds of games were in development for 1983 release, most of which ended
up in bargain bins. But few games were developed in 1983 for release the
following year, resulting in a drought of new video games in 1984.

Preface & cause

The worldwide video game console crash of 1983 was caused by a combination
of factors, though with different factors in several markets:

• In Europe, the boom years of personal computing (1981–1985) were

trumpeted by very aggressive marketing of inexpensive home computers,

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 especially the Commodore 64, with the theme “Why buy your child a video
game and distract them from school when you can buy them a home
computer that will prepare them for college?”[1] Marketing research for both
sides tracked the change as millions of consumers shifted their intention
to buy choices from game consoles to low-end computers that retailed for
similar prices. At the same time, a strong culture of playing and writing
video games for these personal computers arose in Europe, making the
European crash more of a platform shift than a total collapse of the
industry.
• A similar marketing campaign occurred in the U.S. without the same
effect, where instead the personal computer industry grew because of the
crash and is not seen as directly causing it.
• A flood of consoles on the market giving consumers too many choices. At
the time of the U.S. crash, there was a plethora of consoles on the market:
Atari 2600, Atari 5200, Bally Astrocade, Colecovision, Coleco Gemini,
Emerson Arcadia 2001, Fairchild Channel F System II, Magnavox
Odyssey2, Mattel Intellivision (and its just released update with slew of
peripherals, Intellivision II), Sears Tele-Games systems (which included
2600 and Intellivision clones), Tandyvision, and Vectrex. Each one of
these had their own library of games, and many had (in some cases large)
3rd party libraries. Likewise, many of these same companies announced
yet another generation of consoles for 1984, such as the Odyssey3, and
Atari 7800.
• A flood of poor titles from hastily financed startups, combined with weak
high-profile Atari 2600 games based on the hit movie E.T. and the red-hot
arcade game Pac-Man.
• The news media sensationalized both the boom days of 1980 and the
problems of 1982–83. In particular, the story of Atari burying thousands of
E.T. cartridges in a New Mexico landfill shifted the outlook of the video
game market in the eyes of many media outlets.

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History of video game consoles (third generation)
In the history of video games, the 8-bit era was the third generation of video
game consoles, but the first after the video game crash of 1983 and considered
by some to be the first "modern" era of console gaming. It began in 1983 with the
release of the Famicom in Japan and lasted until 1987. Although the previous
generation of consoles had also used 8-bit processors, it was in this time that
home game systems were first labeled by their "bits". This came into fashion as
16-bit systems like the Mega Drive/Genesis were marketed to differentiate
between the generations of consoles. This generation in gaming was primarily
dominated by the Nintendo Entertainment System/Famicom.

Overview

During the era, the Famicom (short for family computer) became very popular in
Japan. The Famicom's American counterpart, the Nintendo Entertainment
System, highly dominated the gaming market in North America, thanks in part to
its restrictive licensing agreements with developers. Though the NES dominated
the market, the Sega Master System (which was popular in Brazil and Europe),
and the Atari 7800, were also major players during this era. The Sharp X68000
began its niche run in Japan with its first iteration in 1987.

The latter part of the third generation (argued by some as part of the 4th
generation) introduced the Game Boy, which single-handedly gelled and
proceeded to dominate the previously scattered handheld market for 15 years.
While the Game Boy product line has been incrementally updated every few
years, until the Game Boy Micro and Nintendo DS, and partially the Game Boy
Color, all Game Boy products were backwards compatible with the original
released in 1989.

The post-crash 8-bit era saw the first console role-playing video games, and was
the birth of the side-scroller. Editing and censorship of video games was often
used in localizing Japanese games to North America. It is the era when many

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famous video game series, and the characters starring in them, originated. Some
notable examples include Super Mario Bros., The Legend of Zelda, Dragon
Quest, Metroid, Mega Man, Metal Gear, Castlevania, Final Fantasy, Phantasy
Star, and Bomberman.

This generation is often mislabeled as the "First Generation" as it is the start of

video gaming as it is today (although the grouping of generations is arbitrary).

History of video game consoles (fourth generation)

In the history of video games, the 16-bit era was the fourth generation of video
game consoles. Starting in 1987 with the Japanese launch of the PC Engine, this
era was dominated by commercial rivalry between Nintendo and Sega with their
machines, the Super Nintendo Entertainment System and the Sega Mega Drive
— the latter known as the Sega Genesis in North America. The machines
introduced in this generation retained the majority market share until 1996.

The PC Engine, a collaboration between Hudson Soft and NEC, was launched in
Japan on October 30, 1987 and was followed by the Sega Mega Drive on
October 29, 1988. Both machines were launched in North America during August
1989 and the Mega Drive was launched in Europe on 30 November 1990.

As the market quickly transitioned to the newer hardware, Nintendo saw erosion
of the commanding market share they'd built up with the Nintendo Entertainment
System and responded with their own fourth generation machine, the Super
Nintendo Entertainment System on 21 November 1990. The machine reached
North America in August 1991 and Europe in April 1992.

Although initially popular in Japan, the PC Engine failed to maintain its initial
sales momentum or to make a strong impact in North America, where it became
unavailable by 1994. As a result the market was largely divided between Sega
and Nintendo, who acted as direct competitors.

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Worldwide sales standings
Console Units Sold Date
February 11,
Super Nintendo Entertainment System 49 million
2006
December 1,
Sega Mega Drive/Sega Genesis 29 million
2006
TurboGrafx-16 11 million N/A

History of video game consoles (fifth generation)

In the history of computer and video games, the 32-bit / 64-bit era was the fifth
generation of video game consoles. It featured both 32-bit and 64-bit consoles,
and the market was dominated by three consoles, the Sega Saturn (1994), the
Sony PlayStation (1994) and the Nintendo 64 (1996), with the PlayStation
eventually ending up the most successful and ending Nintendo's longstanding
domination over the market. This era began in 1996 and ended in 2002 .
Demographics in console sales varied overall, but these consoles defined the
System wars of this era (see section below). The 3DO and Atari Jaguar were
also part of this era, but their sales were poor and they failed to make a
significant impact on the market. This era also saw two updated versions of
Nintendo's Game Boy: Game Boy Color and Game Boy Light (Japan only).

Bit ratings for consoles largely fell by the wayside during this era, with the notable
exception of the Nintendo 64. The number of "bits" cited in console names
referred to the CPU word size and had been used by hardware marketers as a
"show of power"; however there was little to be gained from increasing the word
size much beyond 32 or 64 bits - performance depended on more varied factors,
such as processor clock speed, bandwidth, and memory size.

The 32-bit / 64-bit era also saw the rise of emulation. It was during this time that
not only were commonly available PCs powerful enough to emulate the 8 and
16bit systems of the previous 5 or more years, but the internet made it possible

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to store and download tape and rom images of older games, eventually leading
7th generation consoles (such as Xbox 360, Wii, PlayStation 3, and PlayStation
Portable) to make such older games available for purchase or download.

World wide sales figures

Console Units Sold Date
PlayStation 102.49 million March 31, 2005
Nintendo 64 32.93 million March 31, 2005
Sega Saturn 9.26 million December, 2004
3DO 1.2 million N/A
Atari Jaguar 250,000 N/A

History of video game consoles (sixth generation)

The sixth-generation era (sometimes referred to as the 128-bit era; see
"Number of bits" below) refers to the computer and video games, video game
consoles, and video game handhelds available at the turn of the 21st century.
Platforms of the sixth generation include Sega's Dreamcast, Sony's PlayStation
2, Nintendo GameCube, and Microsoft's Xbox. This era began on November 27,
1998 with the release of the Dreamcast, and it was joined by the PlayStation 2 in
March 2000. The Dreamcast was discontinued in March 2001 and that same
year saw the launch of the Nintendo GameCube in September and Xbox in
November.

Sony's PlayStation 2 achieved sales dominance, with nearly twice the sales of all
its competitors with over 100 million shipped, making the Playstation 2 the best
selling console in history. Microsoft's Xbox came in second with 24 million and
the Nintendo GameCube was third with 21 million. The Dreamcast, which arrived
prior to all of the others and was discontinued prematurely (1998-2001), came in
fourth with 10.6 million, representing 6.5% of the sixth generation sales.

The release of the Nintendo DS on November 21, 2004 is often considered the
start of the seventh generation. The sixth generation started to come to a close

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when the Xbox was succeeded by the Xbox 360 in late 2005. The GameCube
was discontinued when the Wii was released in late 2006. However, PlayStation
2 sales have continued to be strong as of Christmas 2006, due to the systems
popularity and high demand, as well as the high price point and critical reception
of the next generation PlayStation 3. Games are still being produced for the
PlayStation 2, Xbox, and Nintendo GameCube as of 2006, while Dreamcast
games was officially discontinued in 2001, there are still few games being
released even in 2007.

Worldwide sales standings

Console Units Sold Date
PlayStation 2 115.36 million shipped December 31, 2006
Xbox 24 million May 10, 2006
Nintendo GameCube 21.20 million September 30, 2006
Dreamcast 10.6 million August 7, 2006

History of video game consoles (seventh generation)

Seventh Generation
The seventh generation is the era in the history of computer and video games
that began on November 22, 2005 with the release of Microsoft's Xbox 360, and
continued a year later with the release of Nintendo's Wii on November 19, 2006
in North America and South America. Sony's PlayStation 3 was released on
November 11, 2006, in Japan and on November 17, 2006, in the United States,
Canada, Hong Kong and Taiwan, and will likely be the final entry into the seventh
generation of consoles. It is the smallest of all console wars with only 3 consoles.

Having only just formally begun, it is not yet possible to determine which, if any,
of the three major consoles will dominate this generation. The Xbox 360 by
Microsoft has gained an early lead in terms of market share, due in large part to
its launch which came a year before its rivals. Sales figures in North America and

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Europe have continued to be strong, despite the launch of the PlayStation 3 and
Wii. Like its predecessor, the Xbox 360 has struggled in Japan due to a lack of
RPGs and the poor reception of some Japanese developed games, such as
Ninety-Nine Nights and Every Party. However, the system's form factor has been
more generally appreciated and sales have increased in the region recently, due
to the release of the highly anticipated Blue Dragon.

It is more difficult to assess whether Sony's PlayStation franchise will be

successful in this generation. It has a comparatively higher price, the PlayStation
3 has been released roughly a year later than its direct competitor, the Xbox 360,
and reliance on very new technology such as the Cell microprocessor and Blu-
ray format have caused difficulties in manufacturing and, some envisage, in
value-engineering the console to make it cheaper in the future. Nonetheless,
despite many initial setbacks and delays, Sony demonstrated the capabilities of
the PlayStation 3 at Tokyo Game Show 2006, with 27 playable demos and
numerous titles ready for launch. It will ultimately be decided by whether or not
players feel that the games are worth the higher price of the console.

Nintendo entered this generation with a new business plan with its Wii console.
The plan is firstly to capture a new market of 'non-gamers' (and lapsed gamers)
through new game play experiences and new forms of interaction with games. If
the new market grows sufficiently large, Nintendo hopes that the new control
aspect will render current conventionally controlled consoles obsolete, leading to
Nintendo capturing a large portion of the existing market as well.

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 RESEARCH DESIGN

STATEMENT OF THE PROBLEM: Sony has launched the ‘PlayStation 3’

(PS3), in India, in the month of April in direct competition with Microsoft’s ‘Xbox

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360’. Will Microsoft be able to retain its market leadership or will Sony overtake
Microsoft to become the market leader in Bangalore.

OBJECTIVES:
• To gauge the customers perception of the two competing products
• To analyze the market strategies adopted by the two companies
• To analyze if the launch of Sony’s PlayStation 3 will affect the sales of
Microsoft’s Xbox 360

RESEARCH METHODOLOGY:

Hypothesis:

Ho – The launch of Sony PS3 will not affect the sales of Xbox360

Hi – The launch of Sony PS3 will affect the sales of Xbox360

Population:

• all those who have played on game consoles, in Bangalore

• all the Microsoft Xbox 360 dealers in Bangalore
• all the Sony exclusive dealers in Bangalore

Sample:

• Random sample of 30 individuals who have played on game consoles, in

Bangalore.
• Random sample of 20 Microsoft Xbox 360 dealers
• Sample of 10 Sony exclusive dealers

23
SCOPE OF THE STUDY:

• To understand the customers perception of these products and hence

understand the scope for these products in Bangalore.
• Could be of help to the competing companies, to see customers’
feedback and understand what they are doing right and what they are
doing wrong. The companies who would like to enter the market could
use this project to better understand the market potential and plan their
entry.

LIMITATIONS OF THE STUDY:

• Time constraints for the project – only one month

• Complete accuracy not possible due to errors in feedback
• Feedbacks might not be entirely truthful

24
PROFILES

25
Microsoft Corporation is an American multinational computer
technology corporation with global annual revenue of US$44.28 billion and
76,000 employees in 102 countries. It develops, manufactures, licenses, and
supports a wide range of software products for computing devices.[5][4][2]
Headquartered in Redmond, Washington, USA, its best selling products are the
Microsoft Windows operating system and the Microsoft Office suite of productivity
software. The company's name is sometimes abbreviated as MS or MSFT.

These products have all achieved near-ubiquity in the desktop computer market.
One commentator notes that Microsoft's original mission was "a computer on
every desk and in every home, running Microsoft software"—it is a goal near
fulfillment.[6] Microsoft possesses footholds in other markets, with assets such as
the MSNBC cable television network, the MSN Internet portal, and the Microsoft
Encarta multimedia encyclopedia. The company also markets both computer
hardware products such as the Microsoft mouse as well as home entertainment
products such as the Xbox, Xbox 360, Zune and MSN TV.[5]

Originally founded to develop and sell BASIC interpreters for the Altair 8800,
Microsoft rose to dominate the home computer operating system market with
MS-DOS in the mid-1980s. The company released an initial public offering (IPO)
in the stock market, which, due to the ensuing rise of the stock price, has made
four billionaires and an estimated 12,000 millionaires from Microsoft employees.[7]
[8][9]
Throughout its history the company has been the target of criticism, including
monopolistic business practices—the U.S. Justice Department, among others,
has sued Microsoft for antitrust violations and software bundling.[10] Known for
what is generally described as a developer-centric business culture, Microsoft
has historically given customer support over Usenet newsgroups and the World
Wide Web, and awards Microsoft MVP status to volunteers who are deemed
helpful in assisting the company's customers.

26
Product divisions

To be more precise in tracking performance of each unit and delegating

responsibility, Microsoft reorganized into seven core business groups—each an
independent financial entity—in April 2002. Later, on September 20, 2005,
Microsoft announced a rationalization of its original seven business groups into
the three core divisions that exist today: the Windows Client, MSN and Server
and Tool groups were merged into the Microsoft Platform Products & Services
Division; the Information Worker and Microsoft Business Solutions groups were
merged into the Microsoft Business Division; and the Mobile and Embedded
Devices and Home and Entertainment groups were merged into the Microsoft
Entertainment and Devices Division.[33][34]

Platform Products and Services

This division produces Microsoft's flagship product, the Windows operating

system. It has been produced in many versions, including Windows 3.1,
Windows 95, Windows 98, Windows 2000, Windows 2000 server, Windows Me,
Windows Server 2003, Windows XP, and Windows Vista. Almost all IBM
compatible personal computers designed for the consumer come with Windows
preinstalled. The current desktop version of Windows is Windows Vista. The
online service MSN, the cable television station MSNBC, and the Microsoft online
magazine Slate are all part of this division. Slate was later acquired by The
Washington Post on December 21, 2004. At the end of 1997, Microsoft acquired
Hotmail, the most popular webmail service, which it rebranded as "MSN
Hotmail". Later in 1999 Microsoft introduced MSN Messenger, an instant
messaging client, to compete with the popular AOL Instant Messenger. Along
with Windows Vista, MSN is to become Windows Live Messenger.[5]

Microsoft Visual Studio is the company's set of programming tools and compilers.
The software product is GUI-oriented and links easily with the Windows APIs, but
must be specially configured if used with non-Microsoft libraries. The current

27
version is Visual Studio 2005. The previous version, Visual Studio.Net 2003, was
named after the .NET initiative, a Microsoft marketing initiative covering a
number of technologies. Microsoft's definition of .NET continues to evolve. As of
2004, .NET aims to ease the development of Microsoft Windows-based
applications that use the Internet, by deploying a new Microsoft communications
system, Indigo (now renamed Windows Communication Foundation). This is
intended to address some issues previously introduced by Microsoft's DLL
design, which made it difficult, even impossible in some situations, to manage,
install multiple versions of complex software packages on the same system (see
DLL-hell), and provide a more consistent development platform for all Windows
applications (see Common Language Infrastructure). In addition, the Company
established a set of certification programs to recognize individuals who have
expertise in its software and solutions. Similar to offerings from Cisco, Sun
Microsystems, Novell, IBM, and Oracle Corporation, these tests are designed to
identify a minimal set of proficiencies in a specific role; this includes developers
("Microsoft Certified Solution Developer"), system/network analysts ("Microsoft
Certified Systems Engineer"), trainers ("Microsoft Certified Trainers") and
administrators ("Microsoft Certified Systems Administrator" and "Microsoft
Certified Database Administrator").[5]

Microsoft offers a suite of server software, entitled Windows Server System.

Windows Server 2003, an operating system for network servers, is the core of
the Windows Server System line. Another server product, Systems Management
Server, is a collection of tools providing remote-control abilities, patch
management, software distribution, and a hardware/software inventory. Other
server products include:

• SQL Server, a relational database management system;

• Exchange Server, for certain business-oriented e-mail features;
• Small Business Server, for messaging and other small business-oriented
features; and
• BizTalk Server, for employee integration assistance and other functions.[5]

28
As of November 2006 Microsoft has extended itself to Linux and open source
companies to allow Windows server to work harmoniously with servers running
Linux.

Business

The Microsoft Business Division produces Microsoft Office, which is the

company's line of office software. The software product includes Word (a word
processor), Access (a personal relational database application), Excel (a
spreadsheet program), Outlook (Windows-only groupware, frequently used with
Exchange Server), PowerPoint (presentation software), and Publisher (desktop
publishing software). A number of other products were added later with the
release of Office 2003 including Visio, Project, MapPoint, InfoPath and OneNote.
[5]

The division focuses on developing financial and business management software

for companies. These products include products formerly produced by the
Business Solutions Group, which was created in April 2001 with the acquisition of
Great Plains. Subsequently, Navision was acquired to provide a similar entry into
the European market, resulting in the planned release of Microsoft Dynamics
NAV in 2006. The group markets Axapta and Solomon, catering to similar
markets, which is scheduled to be combined with the Navision and Great Plains
lines into a common platform called Microsoft Dynamics.[5]

Entertainment and Devices

Microsoft has attempted to expand the Windows brand into many other markets,
with products such as Windows CE for PDAs and its "Windows-powered"
Smartphone products. Microsoft initially entered the mobile market through
Windows CE for handheld devices, which today has developed into Windows
Mobile 5. The focus of the operating system is on devices where the OS may not
directly be visible to the end user, in particular, appliances and cars. The
company produces MSN TV, formerly WebTV, a television-based Internet

29
appliance. Microsoft used to sell a set-top Digital Video Recorder (DVR) called
the UltimateTV, which allowed users to record up to 35 hours of television
programming from a direct-to-home satellite television provider DirecTV. This
was the main competition in the UK for British Sky Broadcasting's (BSkyB) SKY
+ service, owned by Rupert Murdoch. UltimateTV has since been discontinued,
with DirecTV instead opting to market DVRs from TiVo Inc. before later switching
to their own DVR brand.[5]

Microsoft sells computer games that run on Windows PCs, including titles such
as Age of Empires, Halo and the Microsoft Flight Simulator series. It produces a
line of reference works that include encyclopedias and atlases, under the name
Encarta. Microsoft Zone hosts free premium and retail games where players can
compete against each other and in tournaments. Microsoft entered the multi-
billion-dollar game console market dominated by Sony and Nintendo in late 2001,
[35]
with the release of the Xbox. The company develops and publishes its own
video games for this console, with the help of its Microsoft Game Studios
subsidiary, in addition to third-party Xbox video game publishers such as
Electronic Arts and Activision, who pay a license fee to publish games for the
system. The Xbox also has a successor in the Xbox 360, released on 2005-11-
22 in North America and other countries.[36][37] With the Xbox 360, Microsoft hopes
to compensate for the losses incurred with the original Xbox. However, Microsoft
made some decisions considered controversial in the video gaming community,
such as selling two different versions of the system, as well as providing
backward compatibility with only particular Xbox titles.[38][39] In addition to the Xbox
line of products, Microsoft also markets a number of other computing-related
hardware products as well, including mice, keyboards, joysticks, and gamepads,
along with other game controllers, the production of which is outsourced in most
cases.

30
Sony Corporation is a Japanese multinational corporation and one of
the world's largest media conglomerates with revenue of $68.39 billion (as of
2006) based in Minato, Tokyo.[1] Sony is one of the leading manufacturers of
electronics, video, communications, video games, and information technology
products for the consumer and professional markets.

Sony Corporation is an operating-holding company. It is the electronics business

unit and the parent company of the Sony Group, which is engaged in business
through its 5 operating segments — electronics, games, entertainment (motion
pictures and music), financial services and other. These make Sony one of the
most comprehensive entertainment companies in the world. Sony's principal
business operations include Sony Corporation (Sony Electronics in the U.S.),
Sony Pictures Entertainment, Sony Computer Entertainment, Sony BMG Music
Entertainment and Sony Financial Holdings. As a semiconductor maker, Sony is
among the Worldwide Top 20 Semiconductor Sales Leaders. Its slogan is Sony.
Like no other.

History

In 1945, after World War II, Masaru Ibuka started a radio repair shop in a
bombed-out building in Tokyo.[4] The next year he was joined by his colleague
Akio Morita, and they founded a company called Tokyo Tsushin Kogyo K.K.[5],
which translates in English to Tokyo Telecommunications Engineering
Corporation. The company built Japan's first tape recorder called the Type-G.[6]

In the early 1950s, Ibuka traveled in the United States and heard about Bell Labs'
invention of the transistor.[7] He convinced Bell to license the transistor
technology to his Japanese company. While most American companies were
researching the transistor for its military applications, Ibuka looked to apply it to
communications. While the American companies Regency and Texas
Instruments built transistor radios first, it was Ibuka's company that made the first
commercially successful transistor radios.

31
In August 1955, Sony produced its first coat-pocket sized transistor radio they
registered as the TR-55 model.[8] In 1956, Sony reportedly manufactured about
40,000 of its Model TR-72 box-like portable transistor radios and exported the
model to North America, the Netherlands and Germany.

That same year they made the TR-6, a coat pocket radio which was used by the
company to create its "SONY boy" advertising character.[9] The following year,
1957, Sony came out with the TR-63 model, then the smallest (112 × 71 × 32
mm) transistor radio in commercial production. It was a worldwide commercial
success.[10]

University of Arizona professor Michael Brian Schiffer, Ph.D., says, "Sony was
not first, but its transistor radio was the most successful. The TR-63 of 1957
cracked open the U.S. market and launched the new industry of consumer
microelectronics." By the mid 1950s, American teens had begun buying portable
transistor radios in huge numbers, helping to propel the fledgling industry from an
estimated 100,000 units in 1955 to 5,000,000 units by the end of 1958. However,
this huge growth in portable transistor radio sales that saw Sony rise to be the
dominant player in the consumer electronics field[11] was not because of the
consumers who had bought the earlier generation of tube radio consoles, but
was driven by a distinctly new American phenomenon at the time called Rock
and Roll.

Company name

When Kogyo was looking for a romanized name to use to market themselves,
they strongly considered using their initials, TTK. The primary reason they did
not, is that the railway company Tokyo Kyuko was known as TKK.[12]. The
company occasionally used the acronym "Totsuko" in Japan, but Morita
discovered that Americans had trouble pronouncing that name, during his visit to
the United States. Another early name that was tried out for a while was "Tokyo

32
Teletech" until Morita discovered that there was an American company already
using Teletech as a brand name.[13]

The name "Sony" was chosen for the brand as a mix of the Latin word sonus,
which is the root of sonic and sound, the English word "sunny", and from the
word Sonny-boys which is Japanese slang for "whiz kids". However "Sonny" was
thought to sound too much like the Japanese saying soh-nee which means
business goes bad.[14] Morita pushed for a word that does not exist in any
language so that they could claim the word "Sony" as their own (which paid off
when they sued a candy producer who also used the name who claimed that
"Sony" was just an existing word in some language).[12]

At the time of the change, it was extremely unusual for a Japanese company to
use Roman letters instead of kanji to spell its name. The move was not without
opposition: TTK's principal bank at the time, Mitsui, had strong feelings about the
name. They pushed for a name such as Sony Electronic Industries, or Sony
Teletech. Akio Morita was firm, however, as he did not want the company name
tied to any particular industry. Eventually, both Ibuka and Mitsui Bank's chairman
gave their approval.[15]

As a result of this persistence, Sony has now developed into a leading

international manufacturer producing a variety of products throughout the
electronics market, music and gaming industries, film, finance and many more
besides.

33
Notable Sony products, technologies and proprietary
formats

Sony has historically been notable for creating its own in-house standards for
new recording and storage technologies instead of adopting those of other
manufacturers and standards bodies. The most infamous of these was the
videotape format war of the early 1980s, when Sony marketed its Betamax
system for video cassette recorders against the VHS format developed by JVC.
In the end, VHS gained critical mass in the marketplace and became the
worldwide standard for consumer VCRs and Sony adopted the format. While
Betamax is for all practical purposes an obsolete format, a professional-oriented
component video format called Betacam that was derived from Betamax is still
commonly used today, especially in the film and television industry.

Early Sony products included reel-to-reel tape recorders and transistor radios.

In 1968 Sony introduced its Trinitron brand name for its line of aperture grille
cathode ray tube televisions and later computer monitors. Trinitron displays are
still produced.

Sony launched the Betamax videocassette recording format in 1975. The

Walkman brand was introduced in 1979.

1982 saw the launch of Sony's Betacam videotape family and the collaborative
Compact Disc format. In 1983 Sony introduced 90mm micro floppy diskettes
(better known as 3.5-inch floppy disks), which it had developed at a time when
there were 4" floppy disks and a lot of variations from different companies to
replace the then on-going 5.25" floppy disks. Sony had great success and the
format became dominant; 3.5" floppy disks gradually became obsolete as they
were replaced by more current media formats. In 1983 Sony launched the MSX a
computer for the home and introduced the world with their counterpart Philips the
Compact Disc or CD. In 1984 Sony launched the Discman series which extended

34
their Walkman brand to portable CD products. In 1985 Sony launched their
Handycam products and the Video8 format. Video8 became popular in the
consumer camcorder market. In 1987 Sony launched DAT or Digital Audio Tape
as a new audio tape standard alternative to CD.

In addition to developing consumer-based recording medias, after the launch of

the CD Sony began development of commercially based recording medias. In
1986 they launched Write-Once optical discs (WO) and in 1988 launched
Magneto-optical discs which were around 125MB size for the specific use of
archival data storage.[16]

In the early 1990s two high-density optical storage standards were being
developed: one was the MultiMedia Compact Disc (MMCD), backed by Philips
and Sony, and the other was the Super Density disc (SD), supported by Toshiba
and many others. Philips and Sony abandoned their MMCD format and agreed
upon Toshiba's SD format with only one modification based on MMCD
technology, viz EFMPlus. The unified disc format was called DVD which was
marketed in 1996.

Sony introduced the MiniDisc format in 1992 as an alternative to Philips DCC or

Digital Compact Cassette. Since the introduction of MiniDisc, Sony has
attempted to promote its own audio compression technologies under the ATRAC
brand, against more widely used formats like MP3. Until late 2004, Sony's
Network Walkman line of digital portable music players did not support the MP3
de facto standard natively, although the software SonicStage provided with them
would convert MP3 files into the ATRAC or ATRAC3 formats.

In 1993, Sony challenged the industry standard Dolby Digital 5.1 surround sound
format with its newer and more advanced proprietary motion picture digital audio
format called SDDS (Sony Dynamic Digital Sound). This format employed eight
channels (7.1) of audio opposed to just six used in Dolby Digital 5.1 at the time.
Unlike Dolby Digital, SDDS utilized a method of backup by having mirrored

35
arrays of bits on both sides of the film which acted as a measure of reliability in
case the film was partially damaged. Ultimately, SDDS has been vastly
overshadowed by the preferred DTS (Digital Theatre System) and Dolby Digital
standards in the motion picture industry. SDDS was solely developed for use in
the theatre circuit; Sony never intended to develop a home theatre version of
SDDS.

Sony and Philips jointly developed the Sony-Philips digital interface format
(S/PDIF) and the high-fidelity audio system SACD. The latter has since been
entrenched in a format war with DVD-Audio. At present, neither has gained a
major foothold with the general public. CDs are preferred by consumers because
of their ubiquitous presence in consumer devices.

In 1994 Sony launched its PlayStation (later PS one). This successful console
was succeeded by the PlayStation 2 in 2000, itself succeeded by the PlayStation
3 in 2006. The PlayStation brand was extended to the portable games market in
2005 by the PlayStation Portable. Sony developed the Universal Media Disc
(UMD) optical disc medium for use on the PlayStation Portable. Although Sony
tried to push the UMD format for movies, major studios stopped supporting the
format in the Spring of 2006.

In 2004, Sony built upon its MiniDisc format by releasing Hi-MD. Hi-MD allows
the playback and recording of audio on newly-introduced 1GB Hi-MD discs in
addition to playback and recording on regular MiniDiscs. Recordings on the Hi-
MD Walkmans can be transferred to and from the computer virtually unrestricted,
unlike earlier NetMD. In addition to saving audio on the discs, Hi-MD allows the
storage of computer files such as documents, videos and photos. Hi-MD
introduced the ability to record CD-quality audio with its linear PCM recording
feature. It was the first time since MiniDisc's introduction in 1992 that the ATRAC
codec could be bypassed and lossless CD-quality audio could be recorded on
the small discs.

36
Sony is currently touting its Blu-ray Disc optical disc format, which is likely to
compete with Toshiba's HD DVD. As of quarter one of 2006, Blu-ray Disc has the
backing of every major motion picture studio except Universal. In December
2006 Sony debuted their first Blu-ray player, the Sony BDP-S1 with an MSRP of
US $999.95.

Management

On March 7, 2005, Sony Corp. announced that Nobuyuki Idei will step down as
Chairman and Group CEO and will be replaced by British Sir Howard Stringer,
current Chairman and CEO of Sony Corporation of America, Corporate Executive
Officer, Vice Chairman and COO Sony Entertainment Business Group. Sony's
decision to replace Idei with the British Howard Stringer will mark the first time
that a foreigner will run a major Japanese electronics firm. Sony Corp. also
announced on the same date that current president, Kunitake Ando, will step
down and be replaced by Ryoji Chubachi.

37
ANALYSIS & INTERPRETATION

38
Analysis of the data collected from questionnaire 1

(Category: User)

Age No. of people

<15 2
15-20 6
20-25 21
25-30 1

25

20
No. of people

15
10

0
Age <15 15-20 20-25 25-30
age (in yrs)

Figure 1.0

Interpretation: From the above table and figure we can easily see that the
majority of the users of gaming consoles fall in the 20-25 year age group.

39
 Gender Number

male 28

female 2

female
7%

male
93%

Figure 1.1

Interpretation: As clearly shown in the above figure, the majority of the users of
gaming consoles are male.

40
Ownership Number

Own 19

Do not own 11

Do not ow n
37%

Ow n
63%

Figure 1.2

Interpretation: Out of the total respondents interviewed only 63% own a

console. But 100% of the respondents are aware of game consoles and have
played either PlayStation or Xbox360.

41
Type of console Owners

PlayStation 3 1

PlayStation 2 11

PlayStation 2

PSP 2

Xbox360 3

PlayStation
12 2

10
number of people

6
Xbox360
4 PlayStation PlayStation PSP
2 3

Figure 1.3

Interpretation: Maximum number of respondents interviewed, who own a

console, have a PlayStation 2(PS2).

42
 Time spent
(per week) No. of people

<5 hrs 7

5-10 hrs 15

10-15 hrs 5

15-20 hrs 2

20-25 hrs 1

25-30 hrs 0

>30 hrs 0
20-25 hrs
3% 25-30 hrs
15-20 hrs 0%
7% > 30 hrs
<5 hrs
0%
23%
10-15 hrs
17%

5-10 hrs
50%

Figure 1.4

Interpretation: Fifty percent of the people interviewed spend at least almost an

hour a day on video games, be it consoles, computer or others.

43
 Money spent monthly
(in Rs) No. of people

<500 15

500-1000 6

1000-1500 6

1500-2000 0

2000-2500 0

2500-3000 2

>3000 1

Money spent (monthly)

16
14
12
No. of people

10
8
6
4
2
0
<500 500-1000 1000-1500 1500-2000 2000-2500 2500-3000 >3000
Am ount(in Rs)

Figure 1.5

Interpretation: Most of the people interviewed are not willing to spend much
money on video games.

44
 Attributes No.of people

Appearance 10

Price 14

Brand 19

Promotion 7

Online Services 8

Games 20

Attributes preferred for a game console

Appearance
Games
13%
26%
Price
18%

Online Services
10%
Promotion Brand
9% 24%

Figure 2.0

Interpretation: As can be seen from the above pie chart, the variety of games,
the brand of the console and the price of the product matter most to the
customers.

45
 Sources of No. of
information people
TV 15
Magazines 19
Newspapers 11
Internet 11
Peers 15
Promotions 8
others 1

Sources of information

Promotions others TV
10% 1% 19%
Peers
19%

Magazines
23%
Internet
14% New spapers
14%

Figure 3.1

Interpretation : Twenty three percent of the people get their information from
magazines closely followed by TV and peers. Companies can think of
concentrating more on advertising through these media and creating positive
word of mouth.

46
Other kinds of video No. of
games people

Computer games 18

Handhelds 5

Internet gaming 13

Arcade games 10

Other video games played

Arcade games
22%
Computer games
39%

Internet gaming
28% Handhelds
11%

Figure 4.2

Interpretation: Since most houses have a computer, computer gaming is far

more common. This is followed by internet gaming since people are more used
to computers. Due to the lack of arcades in India this form of gaming has not
caught on here as it has in Japan and the US.

47
 No. of
Xbox 360 people

played 23
PlayStation No. of
(any model) people
not played 7

played 28

not played 2

Xbox360

not played
23%

played
77%

Figure 5.3

48
 PlayStation(any model)
not played
7%

played
93%

Figure 6.4

No. of
Preference people

Xbox360 16

PlayStation 3 14

Pre fe re nce

PlayStation 3
47%
Xbox360
53%

49
 Figure 7.5

Not
Played played Preference

Xbox360 23 7 16

PS 28 2 14

50
 PS
30
Xbox360
25

Xbox360
No.of people 20
PS

15
Xbox360
10
PS
5

0
Played Not played Preference

Figure 3.0

Interpretation: Those who know of consoles in India have almost surely played
any one of the PlayStation models. Also Xbox 360 due to its kiosks present in
many electronic stores in most metropolitan cities in India, has been played or at
least tried by many gamers.

Analysis of the data collected from questionnaire 2

(Category: Sony dealers)

Duration of No. of
dealership(SONY) dealers

0-3 yrs 4

51
3-6 yrs 2

6-9 yrs 3

9-12 yrs 1

Duration of dealership(SONY)

4
3.5
3
No. of dealers

2.5
2
1.5
1
0.5
0
0-3 yrs 3-6 yrs 6-9 yrs 9-12 yrs
years

Figure 3.1

Sony
exclusive No. of
dealers dealers

YES 4

NO 6

52
 Are you a SONY exclusive dealer?

YES
40%

NO
60%

Figure 3.2

Dealers who No. of

sell PS dealers

yes 5

no 5
Dealers selling PlayStation

no yes
50% 50%

Figure 3.3

Dealers Interested
in keeping PS No. of dealers

interested 6

53
not interested 4
Interested in keeping PlayStation

not interested
40%

interested
60%

Figure 3.4

Sony dealers No. of

dealing in PS3 dealers

yes 5

no 5
Dealers dealing in PlayStation 3

no yes yes
50% 50% no

Figure 3.5

No. of
Dealer expectations dealers
Good launch 2

54
Promotions and advertising 5
Better Pricing 1
Customer schemes 6

De aler expe ctations

Good launch
Customer 14%
schemes
43%
Promotions and
advertising
Better Pricing
36%
7%

Figure 4.0

Interpretation: PS3 is being sold mainly by the exclusive dealers of Sony. Some
other dealers are also interested in keeping PS3. Customer schemes and
promotions & advertising are what most dealers are looking for.

Analysis of the data collected from questionnaire 3

55
(Category: Microsoft dealers)

Duration of No. of
dealership(Xbox360) dealers
0-3 months 8
3-6 months 5
6-9 months 3
9-12 months 2
>1 yr 2

Duration of dealership(Xbox360)
9
8
7
No. of dealers

6
5
4
3
2
1
0
0-3 months 3-6 months 6-9 months 9-12 >1 yr
months

Figure 4.1

Interpretation: Microsoft dealers are relatively young with most of them being no
more than 3 months old.

Promotions
and No. of
Advertising dealers
satisfied 20

56
dissatisfied 0
Satisfaction of de ale rs w ith M icros oft w .r.t
PROM OTIONS & ADV ERTISING

dissatisfied
0%

satisfied
100%

Figure 4.2

Customer No. of
schemes dealers

Satisfied 15

Dissatisfied 5
Satisfaction of dealers with Microsoft w.r.t
CUSTOMER SCHEMES

Dissatisfied
25%

Satisfied
75%

Figure 4.3

No. of
Pricing dealers

Satisfied 12

57
Dissatisfied 8

Satisfaction of dealers with Microsoft w.r.t.

PRICING

Dissatisfied
40%

Satisfied
60%

Figure 4.4

Margins and No. of

commissions dealers

Satisfied 17

Dissatisfied 3

Satisfaction of dealers with Microsoft w.r.t.

MARGINS & COMMISSIONS

Dissatisfied
15%

Satisfied
85%

Figure 4.5

Satisfied Dissatisfied

58
 Promotions and
Advertising 20 0
Customer schemes 15 5
Pricing 12 8
Margins and
commissions 17 3

Satisfaction of M icrosoft Xbox de ale rs

Satisfied

20 Satisfied
18 Satisfied
16 Satisfied
No. of Dealers

14
12 Dissatisfied
10
8 Dissatisfied
6 Dissatisfied
4 Dissatisfied
2
0
Promotions Customer Pricing Margins and
and schemes commissions
Advertising

Figure 5.0

Interpretation: As we can see easily from the graph, most dealers are
dissatisfied with the pricing of the product, whereas all are quiet content with
Microsoft with respect to promotions.

59
Do you deal in No. of
Sony products? dealers
yes 10
no 10
Do you deal in SONY products?

no yes
50% 50%

Figure 5.1

Are you open to Sony

dealership for PS3? No. of dealers
yes 8
no 12
Dealers open to Sony dealership for PS3

yes
40%
no
60%

Figure 5.2

Do you have a contract No. of dealers

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 with MS prohibiting
dealing with Sony?
yes 3
no 11
no answer 6
Do you have a contract with Microsoft which prohibits
you from dealing with Sony for the PS3?

yes
no answ er 15%
30%

no
55%

Figure 5.3

Interpretation: Since, for most dealers, there are no contracts prohibiting them
from dealing in Sony PS3, this could be a viable option for many dealers.

Hypothesis testing

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 Ho – The launch of Sony PS3 will not affect the sales of Microsoft
Xbox360

Hi – The launch of Sony PS3 will affect the sales of Microsoft Xbox360

Calculation:

High Medium Low

Customer interest 10 15 5 30
Impact of PS3launch 5 19 6 30
15 34 11 60

Expected

7.5 17 5.5

7.5 17 5.5

O-E (O-E)² (O-E)²/E

2.5 6.25 0.83

2 4 0.23

0.5 0.25 0.04

2.5 0.625 0.08

2 4 0.23

0.5 0.25 0.04

X² = 1.45

Degrees of freedom = (row – 1) (column – 1)

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 = (2 – 1)(3 – 1)
=2

X²(table) = 5.991

X² < X²(table)

Therefore, ACCEPT Ho.

Ho – The launch of Sony PS3 will not affect the sales of Microsoft
Xbox360

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 FINDINGS & RECOMMENDATIONS

FINDINGS:

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 • Awareness about the product (gaming consoles) is relatively low due to
the fact that this is something new in India

• Microsoft Xbox360 was released at least six months prior to the release of
Sony PS3, which helped it to conquer the market

• Price of the products are very high(Xbox360 costs Rs. 27,750

approximately and PS3 costs Rs. 39,990)

• Price of accessories are also high(game cds cost Rs.1000-Rs.2800)

• Training given to salesmen, on the product, is not sufficient.

• There exists strong brand loyalty in this industry

• This product is more suited for older children and adults due to the graphic
nature of the games

• There exists untapped markets, especially among young girls, families

and young working professionals

• Provides scope for new business opportunities

• Marketing approach of the two companies is completely different. Xbox

360 is available in many electronic outlets around the city whereas PS3 is
available in mainly the Sony exclusive outlets only.

RECOMMENDATIONS:

• There needs to be more promotions and advertising to create awareness

of the product. Especially mall promotions are recommended by the
dealers.

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• Pricing needs to be reconsidered to make the product more accessible to
those interested.

• Better and more choices for customer schemes should be made available

• Since brand loyalty plays a major role, companies need to look into this
aspect carefully. For eg. After sales service and customer retention
strategies should be looked into.

• Salespeople should be better trained about the product

• Untapped markets like those of young working professionals must be

exploited

• More educational games for younger children is a good way to convince

parents to buy this product for their children. Also more games for girls
and families would be a good idea. Family games are too few and there
are practically no games for girls.

• Since the game cds are too expensive for most people to afford the
companies should look into renting out cds.

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 BIBLIOGRAPHY

REFERENCES:

www.sonyworld.com

www.microsoft.com

www.wikipedia.com

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www.gameguru.com

www.xbox.com

• Philip Kotler, ‘Marketing Management’, 12th edition, Prentice-Hall India,

New Delhi, 2006

• C.R.Kothari, ‘Research Methodology’, 2nd edition, Wishwa Prakashan,

New Delhi, 2001

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