Analysis of Video Game Systems

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Analysis of Video Game Systems The consumer video game systems offer an exciting opportunity to discuss and analyze the design of technology based on the strategy of each of the players within the industry. We will focus our analysis on the next generation of video consoles: Nintendo’s Wii, Microsoft’s Xbox 360 and Sony PlayStation 3 (PS3). First, we will analyze the targeted customer and the proposition designed by each company to attract them. In this part, there is a description of each market target and how each company has taken advantage of each unique position in the industry. In the second part, we will describe the technology developed to support each strategy. As well as the cost of the components associated with each strategic technology unit that aims to deliver a differentiated proposition and increase it’s value. A cost breakdown structure and the results in sales and revenue are studied in this section. Finally, we provide some insights of the industry and study in detail how the current trends can be reversed or strengthened by reduction in costs and adapting the cutting edge-technology to a better customer experience. The pace of the industry, where customer demands of a wider range of games is increasing and the threat of Sony’s leadership by a company like Nintendo, will definitively be interesting to follow as new technological features are unveiled to enhance customer experience. These features are the key to success within this sector. The video game industry is valued in $USD 9.5 billion in 2007. The main players in the industry Sony, Microsoft and Nintendo are competing to grab the biggest market share. Each one of them has recently introduced new consoles aimed to set themselves apart f... ... middle of paper ... ...rosoft will focus on US and Europe, while leaving the highly competitive and growing market of Japan to Wii and PS3. In the short-term, Wii will continue to hold its leadership. In the long-term it is very difficult to predict a winner. As any of the elements discussed in the insight section of this paper can have unpredicted effect in the market trends or any unforeseen event can change the market and profit outcomes. Appendices Appendix 1 -Cost Structure and Estimation Costs http://www.engadget.com/2006/02/18/playstation-3-costs-900-sez-merrill-lynch-mob/ Appendix 2 –Sales Trend http://www.roughlydrafted.com/2007/08/25/nintendo-wii-vs-sony-playstation-3-vs-microsoft-xbox-360-q2-2007/

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