Let’s go on with our analysis. After having talked about the influence of the competitive forces in the console market, as promised we are going to take a (really) short look at the productive efficiency.

It’s quite obvious, but the success of a company depends on the quality of their products and on the ability in minimizing the costs. Moreover, a bad efficiency can turn into a boomerang mainly if the product is a successful one. Why? Because the competitors can benefit from the shortage of your products: if customers don’t find what they are looking for, especially during holidays, it’s likely that they will buy your competitor’s product.

During this next generation console war, the 3 colossi had different strategies. Honestly I can anticipate that I can’t say which was the right choice. Read more

The last time we spoke about the key success factors of the console market. Today we will deeply analyse the influence of the competitive forces, and how much they affected the market.

First of all, let me say that competition is always a positive factor.
The presence of competitors means innovation, dynamism, differentiation, sometimes also price reductions.

It’s not my intention to describe what happened 10-15 years ago, with the struggle between Sega and Nintendo, the arrival of Sony, the failure of 3DO and Amiga CD32 or the sad end of Saturn and Dreamcast.

We will focus our analysis on the current competitors: Microsoft, Nintendo and Sony.
Let’s start with Sony and its famous brand: Playstation.

The last generation was “dominated” by Sony. They sold more than 100 millions of consoles and they are still selling a lot of them. The same had happened for the first Playstation. Read more

Ok, after the short introduction of the last post, let’s start with the first part of our analysis.

In order to highlight the different strategies of the 3 competitors, it’s necessary to take a look at the market, analysing the key success factors of the whole sector and trying to understand which company got the best from each factor.
Of course:

  1. we are not going to say which strategy is the best one, at least not now;
  2. it’s likely that you will find something missing form my list. If so, please feel free to add your comments to this post.

I’ll proceed with an alphabetical order, simply because none of these factor can be considered better than the others: the secret is within the ability to put in place a COHERENT strategy, without the need to be the best in each sector.

BRAND
It’s a tautology, but the brand is important. 10 years ago, before the advent of the Playstation, we can say that Nintendo and SEGA were synonyms of “console videogames”. If you followed the link in my introductive post, you already know why SEGA is not on the scene anymore.

When Sony decided to “attack” the console market, they pushed on marketing, on brand valorisation, on advertising. They made a lot of investments to become popular in this market too. And they were successful.

The same did Microsoft 5 years ago, with their first XBOX.

Nintendo strategy was different and the result was that both the XBOX and the Playstation brand became really popular. Nintendo lost some of their popularity, but thanks to the portable console segment they were able to “survive”.

Now, in 2007, these 3 competitors can count on greats and strong brands, which makes really unlikely the arrival of new comers. Read more

Today we are going to begin a deep analysis of the videogames market. Being a really big and complex job, only one article is not enough: I will divide this document in many parts, hoping to attract your attention and make you happy to participate and send us your feedback.

Wii , 360 and PS3

Some numbers to help you in following the next articles.

Market size: “The global market in 2003 was over 21 billion of dollars” (Source: OECD), taking into consideration both pc, console, mobile and online gaming. Alone, the console segment is worth 15 billions of dollars.

Competitors: as we are going to focus on console manufacturers, we will consider the “big 3”: Microsoft, Nintendo and Sony.

The history so far: if you need to be updated on the whole story, I would suggest you to take a brief look at this link. In this analysis I will focus on the present. Read more