Assessment task 2
Competition in Video Game Consoles – Individual Case Study
Table of contents
The business and economic characteristics of the console segment in the video game industry 3
Porter’s five forces model analysis 3
Strategic group map of the video game industry 5
Success factors for video game console producers 6
Weighted competitive strength assessment 8
List of references 10
The video game console industry is a particular interesting industry to analyse, since the future of the industry is extremely hard to predict. Hard to predict especially because one of the main competition parameters of the industry is the technology implemented in the products. Since technology is known to be developed at a still more rapid speed, it poses a big challenge to the companies of the industry to select technologies and designing a product utilizing these technologies, producing it, and start offering a product to the market before the competitors. In the following an understanding of the characteristics and development of the video game console industry will try to be attained through research and analysis.
The business and economic characteristics of the console segment in the video game industry
The console segment of the video game industry is characterized by fierce competition among 3 big companies; Sony, Microsoft and Nintendo. These continuously fight to gain more costumers through the focus on the gaming experience of the console achieved through the implemented technology, but also the degree of innovation in this new technology. This has to be implemented in the company’s gaming device and sold at an attractive price to the customers, whilst still achieving the biggest possible profit margin. Therefore the industry is characterized by a focus on economies of scale in order to achieve the lowest possible unit-price to increase profit.
The video game business is also characterized by the rapidly...