Case Study of Competition in Video Game Consoles - Essay Example

The early video games were simple and were not backed by sophisticated technology. In the current times, technology driven powerful consoles, pricing, wide variety in games and portability across different platforms are key elements that give leverage to the company. Indeed, though pricing of game units and games is hugely important, it is observed that advancing technology has increasingly played vital role in attracting the gamers. The next generation consoles, Xbox and Xbox 360, launched by Microsoft, have been leading game systems which have given tough competition to Sony’s PSP and PS2 systems and Nintendo’s Wii.

Technology has emerged as important factor that provides gamers with unique experience and intrigues them as well as helps them to exploit their capabilities as gamers. The variety in games and appealing game titles constantly attract existing gamers as well as new ones and provide them with new ways to test their skills. Thus, firms which can provide the market with wide varieties in games that are backed by technology and relatively low cost would help become market leader in the video game industry.

Answer 2 There are four chief drivers that are changing the dynamics of video games industry: demography: console technology; mobile gaming and online gaming. The first one is the widening database of gamers which have cut across age and gender. . The next generation technology is important as fast processors, high-resolution screens and sound effect provide the gamers with high-end experience. The increasing popularity of handheld gaming devices like PSP has inspired the industry to introduce sophisticated games in the mobiles.

Moreover the expanding database of mobile users is crucial factor that could provide the firms with competitive advantage in the industry. Thus, leading game providers are forging network relationships with mobile manufacturers and using the platform to maintain their leverage in the industry. The last but not the least important is the use of internet in gaming devices. The users are able to download new games and movies that significantly cuts cost of going to the market and buying games. Most importantly, use of wi-fi in the gaming devices greatly facilitates mobility and helps users to access new games even when they are outside their house.

Answer 3 Microsoft, Sony and Nintendo are three big companies in the field of video games in US. Microsoft has been a leadership company in the area of computing and home entertainment. It has exploited its technology expertise to develop video games that would enhance user experience. The company has also used extensive marketing, especially viral marketing to advertise its video games consoles and video games. It has also tried to ensure that its first mover advantage is maintained by constantly improving its technology and giving more variety in games.

Sony has used its market leadership in audio-video products, communication and IT based products to introduce video games and capture significant market share of the industry.