Xbox One Essay

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II: Porter’s Five Forces Model:
• Threat of substitute products:
Besides the competition from Sony and Nintendo, few other companies have produced similar products. According to PC Magazine, currently Sony has higher sales than Microsoft but Microsoft is making more money than its other competitors. According to market research group NPD, more than 772,000 Xbox One games were sold in February, while 2.46 million Xbox 360 games also exited shelves. The combined sales figures made for 48 percent of the total software market share. The Xbox One is also averaging 2.75 games sold per console. Therefore, the threat of substitute products is very low.

• Potential New Entrants:
Latest console of XBOX i.e. XBOX One is priced at $499. It is expensive for any new player to develop a new and similar product in this market, and few are likely to appear in the next few years.

• Bargaining power of Buyers: …show more content…

Also buyers are not informed of the seller’s costs. Therefore Bargaining power of buyers is relatively low. The latest console of XBOX is priced at $499. Though the price seems expensive, for many gamers who have better consumption capacity, price usually is not their first concern. They tend to focus more on the user-friendly features and the products reliability.

• Bargaining power of Suppliers:
Xbox is a technological product which is comprised of many electronic components. The cost of switching between suppliers can be very high as the major suppliers of the XBOX components are the global technology giants like IBM, Samsung, Delta Electronics, ATI Radeon and FOXCONN etc. Additionally, Xbox carries a powerful brand name. Therefore, the bargaining power of suppliers for Xbox is high.

• Rivalry among

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