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Introduction
Considered by some as a curiosity in the mid1970s, the video game industries have grown
from focused markets to mainstream.
They took in about $9.5 billion in the US in 2007,
11.7 billion in 2008, and 25.1 billion in 2010.
Customer base constantly increasing providing a
rapid growth opportunity for the market.
Attention towards gaming has increased over
time leading to the development of cutting edge
and advanced gaming experience
In1983 , Atari lost 500 million dollars in the first nine months.
The realization that the key to the entire industry was great games
that complimented the hardware.
Games for the first time included a story line that was intermixed
with graphics- Donkey Kong and Mario Brothers.
Arakawa in his drive to dominate the market and with his big
fear of illegal, low-quality Taiwanese games infiltrating the U.S.
he had engineers develop and install a chip in the NES that
restricted the system to playing only Nintendo-approved games.
History-1990s Sega
History-3DO
Internal AnalysisStrengths
Atari
First mover advantage
Friendly and open work environment
Coin based video game
Visionary leadership- hired employees like Steve Jobs and
Steve Wozniak
Huge profits
Nintendo
Comparatively Low priced
Huge profits
Emphasis on developing games according to the customer
needs
Launch of gaming titles like Donkey Kong and Mario Brothers
Internal AnalysisStrengths
Sega
Low fee licensing programs
Incorporating multimedia into Genesis system
Strong Leadership
Cutting edge technology at the time-16 bit console
A more realistic gaming experience Mortal Kombat
Sony
Free internet connectivity
Well known brand worldwide
Strong marketing plan
Built in blu-ray Player
Strong market position
Extensive list of games
Internal AnalysisStrengths
Microsoft
Concentration on online gaming
A complete Entertainment system
Highly advanced network servers that can
Internal AnalysisWeakness
Atari
Strategic misalignment- Bushnell resigning
Emphasis on making profits
Misuse of power
No importance to game developers
High employee turnover
Nintendo
High licensing fee
Lack versatility in gaming catalogue
Lack of innovation
Loss in market share
Inability to counteract Sega's aggressive marketing campaigns
Alienation of the retailers
Internal AnalysisWeakness
Sega
Unable to adopt to market trends
Huge investment into R&D
Huge inventory turnover
Graphics and power
Sony
Weak network as compared to Microsoft
High prices
Emergence of Pc games
Microsoft
Huge costs on maintaining the online severs
High prices
X-box's hardware is not as durable as the PS3
Smaller gaming catalogue
External Analysis
Opportunities
A more family oriented gaming experience to
External Analysis
Threats
Extremely high competition
Bad reputation to overcome
Economic downturn-disposable income reducing
SWOT Analysis
Intense competition between the current market
leaders
Sega made the mistake of over estimating the
market, failed and is now a software development
company for different platforms.
Nintendo keeps coming back strong with a focus
gaming experience (Wii) on having fun as family or
with friends, amore wholesome approach with
concentration on younger audience.
Sony continues to hold its own with its Play Station
Platform and developing world renowned gaming
titles.
SWOT Analysis
Conclusion
Shift in key players to companies like Sony (PS3), Microsoft (XBox 360) and Nintendo(Wii).
The home video game industry has proven that it can sustain
itself.
Recommendations
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