...in annual revenue and there is currently no indication of decline in the industry. So, in order to identify how the revenue is distributed, it's essential to look at the supply chain of the entire PS3 business. As seen in the supply chain, there are opportunities in many aspects of the console business, coming from the actual console sales as well as extras such as games. The customers, as identified by our segmentation analysis table, are at the end of the supply chain, and their consuming of video games are distributes across several actors. Additionally, the most known among the actors are of course the hardware manufacturers, which include Sony, Nintendo and Microsoft. Except for the revenue coming from the console sales, they also get about 20% of the market price for the games, which are mostly sold in the growth level of the product life-cycle. The additional revenue in the supply chain is split among the other actors. Looking more closely at the publishers and developers, we realize that the publishers are likely to take a large portion of the revenue. Those are the large international companies that have sufficient funds to build a distribution network and employ developers to pull off new best-selling games for the consoles. Hardware manufacturers usually try to pull off deals with these companies when they identify potential best-selling games because the top 3.3% of the games bring in 55% of the sales revenue. For this reason, some hardware manufacturers, most...
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...*CASE STUDY 11* Competition in Video Game Consoles: The State of the Battle for Supremacy AUTHORS: Christian Kostadinov 29114042 Ivaylo Baldev 29114047 Sofia 2010 Competition in Video Game Consoles: The State of the Battle for Supremacy Objectives in front of the case study The main objective that stands in front of our project is to clarify the present situation on the market of video console games. To present the strategies of the three main rival firms-Sony, Nintendo and Microsoft, to see their advantages and disadvantages, to see what their mission statement is, to see who are their customers and in which market segments the companies are trying to penetrate or have already penetrated. At the end we are going to try to predict the future development of the battle. We are also going to compare them in the above mentioned spheres, with the help of a competitor analysis. Conclusions are going to be derived after every paragraph. In order to do that we are going to use different methods including- SWOT analyses, PEST analyses etc. There were two different variants how to structure the text- first to include the PEST and SWOT analysis in the text for every firm or second variant to add it after the analysis. The second way was chosen because we decided that using this method it will be easier to compare the firms. Additionally we are going to present the information in the most understandable way by a PowerPoint Presentation. Content: 1. Introduction...
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...The Analysis of PlayStation of SONY Corporation NAME: Mei Zhang Yixuan Yao Zhaorui Liu Yong Zhang In this case we choose the SONY Corporation. SONY Corporation (NYSE: SNE), commonly referred to as SONY, is a Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan and the world's fifth largest media conglomerate measured by revenues. SONY is one of the leading manufacturers of electronics products for the consumer and professional markets. The Game is an important industry, SONY launches "PS3" in the middle of 2006, and it also strengthens self-developed video games software. We focus on the PlayStation of SONY Corporation to analysis the market structure and the competitors (XBOX of Microsoft, WII of Nintendo) A. Nature of demand 1. The buyers currently go about buying existing products of SONY considering the number of stores shopped, the consumers will feel that the more stores sell one item, the more popular the product is. For example, there are many different types of SONY Digital Single Lens Reflex Camera, but most stores only sell α35,α390, buyers may propensity to buy this two types. Buyer will buy SONY`s products when they are sold in different stores. The buyers also consider the industrial sources, as a consumer, we all want to the best raw material, intermediate material and final material, thus the industrial sources is the key factor. The display screen...
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...Nintendo Wii Marketing plan Table of Content 1. Situation analysis 1.1 Macro analysis 1.2 Micro analysis 1.3 SWOT analysis 1.4 Bowman’s strategy clock 1.5 The Product Life Cycle 2. Target Market 2.1 Positioning 2.2 Segmentation 3. Marketing Mix 3.1 Product 3.2 Price 3.3 Promotion 3.4 Place 3.5 People 3.6 Physical 3.7 Process 1. Situation analysis 1.1. Macro environment The PESTEL analysis describes a framework of macro-environmental factors. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. 1.2.1. Political The video game industry is influenced by factors such as taxation policies, foreign trade regulations and social welfare policies (some games have sexual/violent content). Video games tend to play with the emotions of people. Governments have the authority to control the content of the video game frames. 1.2.2. Economic The income of the consumers in the video game industry have an effect on their buying behaviour. If people fall under a low-income range, they might not be able to buy a video game because they are relatively expensive. 1.2.3. Social Factors that can influence the video game industry are: income distribution, lifestyle changes, level of education, population demographics, attributes to work, consumerism, etc. Nintendo’s action to open World of...
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...ALI FARHOOMAND NINTENDO’S DISRUPTIVE STRATEGY: IMPLICATIONS FOR THE VIDEO GAME INDUSTRY For some time we have believed the game industry is ready for disruption. Not just from Nintendo, but from all game developers. It is what we all need to expand our audience. It is what we all need to expand our imaginations. - Satoru Iwata, president of Nintendo Co. Ltd1 In the 2008 BusinessWeek–Boston Consulting Group ranking of the world’s most innovative companies, Nintendo Co. Ltd (“Nintendo”) was ranked seventh, up from 39th the previous year. 2 This recognised Nintendo’s significant transformation into an innovative design powerhouse that had challenged the prevailing business model of the video game industry. In 2000, when Sony, Microsoft and Nintendo (the “big three” of the video game console manufacturers) released their latest products, Sony's PlayStation 2 (“PS2”) emerged as the clear winner, outselling Microsoft’s Xbox and Nintendo’s GameCube. In 2006, a new generation of video game consoles was introduced by these players, precipitating a new competitive battle in the industry. Microsoft and Sony continued with their previous strategies of increasing the computing power of their newest products and adding more impressive graphical interfaces. However, Satoru Iwata, president of Nintendo, believed that the video game industry had been focusing far too much on existing gamers and completely neglecting non-gamers. Armed with this insight, the company repositioned...
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...consoles, has redefined how video games are to be played in this modern age. The innovative Nintendo Wii, with its unconventional remote-like game controller, proved to be a huge success for the Japanese corporation, instantly taking the top spot again after almost a decade of trailing behind Sony and Microsoft in the realm of video game consoles. Positioning Wii to become the go-to-game console of hardcore and non-traditional gamers alike, Nintendo enjoys the best of both worlds. Customers find that they can now enjoy playing video games with their families instead of playing by themselves – a new kind of fun which they cannot get from playing a PS3 or an Xbox 360. Adding to this, customers are convinced to jump ship from Sony and Microsoft for a cheaper yet family-friendly Nintendo console. While Sony and Microsoft lose money for every PS3 and Xbox 360 they sell, Nintendo has already been making huge profits from each unit of Wii sold. The Wii phenomenon is not a mere lucky strike but rather an adept execution of the Blue Ocean and the Sumo business strategies. Rather than having a bloody battle with the graphics-superior console makers in the hard-core gamers segment, Nintendo looked for a blue ocean. It launched its Wii console to serve a larger audience – the family. Unlike the competent individualistic gamers who search for intense visual effects and game play, the family wants easy-to-learn and exciting group-based gaming. The former segment values achievement and escapism...
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...Nintendo’s Wii U Marketing Case Study Wii U launch: make or break for Nintendo Three years ago, Nintendo was king of the $78 billion videogame industry. The Wii was a smash hit and Nintendo's DS hand-held was the best-selling portable gaming device. But a series of stumbles—a lukewarm debut for Nintendo's 3DS hand-held game player and a sharp decline in Wii sales—raised questions about whether the company is on the wrong side of a generational divide. Nintendo has refused to veer from its tried-and-tested formula of creating dedicated videogame machines, passing up a potentially lucrative opportunity to apply its game-making prowess to billions of smartphone and tablet users. In packing more technological muscle, Nintendo aims to win over the core gamers who never fully embraced the motion-sensing games of the original Wii. Nintendo started dabbling with the concept of a game machine with a second-screen controller in 2009. At the time, the Wii was still selling well, but Nintendo executives saw its broader reach as a living room hub limited because it required the Wii to monopolize the family's TV when it was in use. The wireless controller can function separately from the television, so a person can continue playing a game on the GamePad when someone else is using the TV. It only works within close proximity to the console, so the controller isn't meant to be a portable device outside the home. To push the idea of making the controller a key device in...
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...of Gaming Industry: Microsoft, Sony, and Nintendo SWOT is acronym for Strength, Weakness, Opportunity, Thread. In Essence a SWOT analysis is geared toward predictability of obvious and hidden factors that may influence the outcome of marketing and sales. In terms of gaming industry, Microsoft, Sony, and Nintendo with their respective hardware’s MS Xbox 360, PS 3 and Nintendo Wii illustrate the first tier competitors in U.S. as well as globally. Microsoft Xbox 360 Strength: • Integration of next generation DVD players i.e. HD technology • Backward compatibility with previous Xbox games • Online product – the first of its kind • Lower price than most comparable competitor PS3 Weakness: • Expensive hardware and games • Production flows • Direct competition with Nintendo because of equally large customer base Opportunity • Penetration of new markets in ME • Penetration of untouched markets by means of bundling • Partnership with Hollywood studios Threat • Lower cost competitor i.e. Nintendo • Anti trust issues in Europe • Hardware complication Sony Play Station 3 Strength: • Integration of next generation DVD players • Backward compatibility with previous PS2 • Mostly Free Online product • Recent decline in profits Weakness: • Expensive hardware and games Opportunity • Great product lunch covering global spectrum. • Penetration of new markets in ME • Penetration of untouched markets by means of bundling • Partnership with Hollywood studios...
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...hard to achieved brand familiarity. Over the years Nintendo’s products have made their way through the product life cycle. From the initial market introduction and sales growth in the 1980’s, the Nintendo Entertainment System (NES) as well as their first big game “Donkey Kong”, dominated the market. In the 1990’s, when true competition entered the market, Nintendo’s products had reached market maturity and sales started to decline. By 2003 Nintendo’s market share had shrunk so much that the future of the company became worrisome. The product life cycle has started again with the recent introduction and phenomenal success of the Nintendo Wii. As of the end of the 2010 first quarter Nintendo Wii had lifetime sales of $68 million, holding 49.1% of the market share. Unfortunately production supply has become significantly depleted and current capacity demands are not being met. With the holiday season drawing nearer, George Harrison, Senior Vice President of Marketing for Nintendo must analyze the market to determine a cost effective solution that will allow Nintendo to maintain adequate inventory levels to avoid a supply shortage. Details of George’s decisions include: distribution levels; to whom; at what price; and how (online vs. in-store). Nintendo objective is not to compete directly with Sony PS3 or Microsoft’s Xbox 360, instead Nintendo believes that it can target the broader audience in order to successfully diversify and gain competitive advantage. The six...
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...Mission Statement Nintendo’s mission statement is to produce the highest quality products, providing the best support services possible by paying careful attention to their customers and continuous improvement with their product lines. At Nintendo we are proud to be working for the leading company in our industry. We are strongly committed to producing and marketing the best products and support services available. We believe it is essential not only to treat every customer with attention, consideration and respect. By listening closely to our customers, we constantly improve our products and services. Vision Statement Nintendo we are proud to be working for the leading company in our industry. We are strongly committed to producing and marketing the best products and support services available. We believe it is essential not only to provide products of the highest quality, but to treat every customer with attention, consideration and respect. By listening closely to our customers, we constantly improve our products and services. Nintendo Corporation feels an equal commitment toward our employees. The Company wants to maintain an atmosphere in which talented individuals can work together as a team. Commitment and enthusiasm are crucial to the high quality of our products and support services. We believe in treating our employees with the same consideration and respect that we, as a company, show our customers. History Nintendo started as a small Japanese business by Fusajiro...
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...A Shift of Power predicted death of game consoles by some in the industry shift of power from the hardware manufacturer to the content provider AAA development costs are out of hand. Sales in decline, due in part to the rise of cheap mobile games Publishers and developers with money are investing heavily in software as a service. There is a shift from packaged software to online-oriented services Bungie's Destiny, Respawn's Titanfall Ubisoft's The Crew and The Division influx of free-to-play game developments, particularly among independent studios F2P projects net the investment dollars, packaged software projects do not Crytek's Gface Splash Damage's Fireteam Survarium Killer Instinct packaged software will continue to exist for a while, but the tide has already turned. We'll see fewer developments over time desire to cut out the retailer desire to cut out the hardware manufacturer who imposes licensing fees, royalties on sales, and strict (and costly) approval processes Free-to-play monetization is a game changer realignment of the industry with the establishment of new giants the who's who in business is changing established publishers struggle to adapt to current conditions: burdened by low profitability of AAA packaged software, have poor understanding of F2P monetization or the life cycle of a service Wargaming.net, Riot Games, and Gung...
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...role. The way we communicate was transformed by the information age which opened the doors to a whole new world of possibilities. A few decades ago our telecommunications flourished with the invention of the television, the radio and the phonograph, which functioned based on an analog format. These inventions allowed for broadcast of radio and television news and shows across the United States. Record music and movies in VHS format were also introduced to American homes. With the introduction of the digital format our telecommunications received a tremendous boost, and some of the early media outlets were replaced by more efficient ways of communication. This paper will describe some of the factors behind the recent loss of audience and sales in such media outlets as record music, movies, network TV, DVDs and video games. The introduction of the digital format changed the way we watch TV; high definition made possible to see a picture like never before, like if we were looking through a window. Digitalization allowed for a much better sound and picture quality in CDs and DVDs, which replaced the vinyl disc and the VHS tape. These media, however, continued to evolution so much so that in recent years media outlets such as newspapers, movies, network TV, DVDs and video games became obsolete. Digital is the key factor. Media outlets such as newspapers, movies, DVDs and video games are more tangible and cost more money to produce. These tangible versions...
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...console, the PlayStation 3 (PS3), was set to launch worldwide on November 17, 2006, a mere week away. Despite PlayStation 2’s (PS2) dominance in the last generation of gaming consoles, Stringer understood that past successes were no guarantee of future success in the intensely competitive game industry. Microsoft had launched the first volley in the last console war by releasing the Xbox 360 in the fall of 2005. Within one year, almost 4 million Xbox 360s had been sold worldwide, giving Microsoft a significant head-start in the race for market dominance. Meanwhile, Nintendo, a competitor thought to be dead due to the lackluster sales of its previous console, the Nintendo Gamecube, had generated significant “buzz” around its new entry, the Nintendo Wii (pronounced “we”). Targeting more of a mainstream audience than Sony and Microsoft, the Wii, scheduled to launch just two days after the PS3, posed a serious threat to Sony’s market share, particularly due to its $249.99 retail price, half the price of the PS3. Stringer also knew that there was much more at stake than winning the console war. The next generation of the DVD market was at stake as well. In addition to being a gaming console, the PS3 was a Blu-Ray disc player. Blu-Ray was a next-generation optical disc format that held more than five times as much information as DVDs and allowed high-definition television (HDTV) owners to watch movies with an unprecedented level of image quality. The PS3 was, in effect, the “Trojanhorse”...
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...customers get around to paying their bills. •Cash outflows are sorted into two categories: 1) current expenses, deducted when calculating income; and 2) capital expenses, depreciated over several years. •Always estimate cash flows on an after-tax basis; taxes should be discounted from their actual payment date Rule2: Estimate cash flows on an incremental basis Do not confuse average with incremental pay offs: Sometimes throwing good money after bad results in a large pay off. •Include all incidental effects: PS4 will cause sales of PS3 to decline. •Forecast sales today and recognize after-sales cash flows to come later: GE’s revenue from both sales of engines and from service and spare parts. •Include opportunity costs: For example, a new manufacturing operation uses land that could otherwise be sold for$100,000. •Forget sunk costs: Sunk costs are like spilled milk. •Remember salvage value: Don’t forget taxes you have to pay on the sales of plants and equipment Rule3: Treat inflation consistently PBP: The payback period of a project is the number of years it takes before the cumulative forecasted cash flow equals the initial outlay. •The payback rule says only accept projects that “payback” in the desired time frame. •This method is flawed, primarily because it ignores later year cash flows and the present value of future cash flows. The IRR rule is to accept an investment project if the opportunity cost of capital is less than the IRR. •Provided that cash...
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...Microsoft and the Xbox 360 Ring of Death ------------------------------------------------- Table of Contents Executive Summary ...................................................................................................................... 3 Problem Statement .......................................................................................................................4 Situation Analysis ..........................................................................................................................4 Objectives ..............................................................................................4 Background ............................................................................................5 SWOT Analysis ..............................................................................................................................6 Strengths ...............................................................................................6 Weaknesses ...........................................................................................7 Opportunities .........................................................................................8 Threats................................................................................................... 8 Market Analysis ............................................................................................................................9 Previous Market...
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