The purpose of this assignment is to analysis the case study Now Underway in Your Living Room: The Video Game Console Wars by discussing the case through a clear description of the case, stating assumptions, identifying the limitations of the information omitted from the case study and analysing issues in the case. The case is about Nintendo Wii, Sony PlayStation 3 and Microsoft Xbox 360, which are the latest game consoles currently in the market.
What the case is basically about is the marketing battle that Nintendo and Sony are wagging. Nintendo which developed Wii, its latest video game console which featured wireless motion sensitive controller, where as Sony which developed the PS3 which is its latest video game console which features advanced graphics capability and has a built in high definition DVD player that uses Blu-ray. These game consoles were launched a year after Microsoft's Xbox 360. The strategies of Nintendo and Sony entailed major risks for their respective game consoles stated by industry observers. According to orthodox wisdom each new generation of machines has to be faster as well as more powerful than the preceding generation, Nintendo defied this by creating a machine simple to use and also less costly to manufacture, they hoped to appeal more to the veteran players that were addicted to games such as Mario Brothers and Zelda, also novice players. Sony on the other hand had enjoyed massive global success their PlayStation and PlayStation 2 which had each sold over one hundred million units, with PS3 Sony had intended to up the ante which featured a chip that has as much speed as a supercomputer as well as superior graphics and a laser diode that plays high definition DVDs. Xbox 360 owners can add a HD DVD player to their console for an additional cost. Europe is very important to Microsoft and Sony because Microsoft is almost certainly going to win in the United States and Sony in Japan, Europeans tend to buy whatever has the coolest games.
Assumptions from this case are that Nintendo and Sony's strategies for their new game consoles was very risky because each new generation of game consoles has to be faster and more powerful according to orthodox wisdom which is not what Nintendo did, they had created a machine that was simple to use and less costly to manufacture and both Nintendo and Sony launched their new games consoles a year after Microsoft's Xbox 360 which had already by then sold ten million unit by the time they were launched. Other assumptions are that Microsoft is almost certainly going to win the United States because it is a United States brand product and the same for Sony in Japan as it is a Japanese brand product as those are the origin countries of those companies. This leaves the European market with the assumption of the failure or success of the PlayStation 3 launch into Europe will determine the outcome or end result of the video game console war.
Limitations of the information omitted from the case are that it does not tell you about the additional features of the game consoles like being able to connect to the internet including playing games online against other people around the world, if they are able to play games from pervious game console models like Nintendo Wii having the ability to play Nintendo GameCube games or being able to connect PlayStation Portable with PlayStation 3 wirelessly as well as using it as a control and for the Wii being able to communicate wirelessly with Nintendo DS, which help define each game console and set it apart from the others. Other limitations of the information omitted from the case is the lack of information Europeans game console preferences, it basically only states that they tend to buy the game consoles that have to coolest games or games that appeal more to them but it does not state what these sort of games might be, for some of them this my be football games as it is the national sport of European countries, or classic game titles from earlier game consoles such as Mario Brothers on Wii and Ratchet and Clank on PlayStation 3.
Issues in the case are the separate marketing battle Nintendo and Sony are waging, The next generation of digital video players HD-DVD and Blu-ray and the European market. For the marketing battle between Nintendo and Sony, Sony launched PlayStation 3 which has a processing chip that packs as much speed as a supercomputer to provide advanced graphics and superior quality and a built in high definition DVD player using Blu-ray which uses a laser diode, PlayStation 3 was available in two models one with a twenty gigabyte hard drive and the other with a sixty gigabyte hard drive. Nintendo launched Wii which featured a wireless motion sensitive controller, but Nintendo had chosen to make the Wii simpler to use and less costly to manufacture therefore they can sell their game console at a cheaper price than their competitors, they intended to appeal to novice inexperienced players and veteran players addicted to well known games of Nintendo. The next generation of digital video players HD-DVD was developed by Toshiba which features high definition DVD playback with one thousand and eighty lines of resolution which is the highest quality playback on their widescreen HDTV's, Xbox 360 owners have to option of adding a HD-DVD player to their Xbox 360 for an additional fee. Blu-ray which was developed by Sony also plays DVD's in the same high quality as HD-DVD players, Sony also had them built into the PlayStation 3. Blu-ray and HD-DVD are not compatible with each other, they require different formatted DVD discs for the DVD players that can not be used in the other, Sony's Blu-ray player requires a Blu-ray DVD while Toshiba's HD-DVD requires HD-DVD formatted DVD's in order to play them. Sony's Blu-ray DVD players cost around a thousand dollars to buy where as Toshiba's HD-DVD players range from four hundred to eight hundred dollars. Depending on the majority of consumers preference over the two choices, that could determine the success of it and the market share they will gain. The other issue in the case was the European market, this is because it was seen as a very important to Microsoft and Sony because of the issue that the success or failure of their latest game console could determine the outcome of the battle between Nintendo, Sony and Microsoft by putting them in the lead or ahead.
In conclusion Nintendo, Sony and Microsoft are the main competitors in the game console industry, with Microsoft having released its latest game console a year earlier than Nintendo and Sony giving it a head start. Sony and Nintendo's strategies were seen as risky as they launched their latest game console a year later than Microsoft's and Nintendo had defied orthodox wisdom which states each new generation of game console has to be faster and more powerful then the pervious. Microsoft is almost certainly going to win the United States because it is a United States brand product and the same for Sony in Japan as it is a Japanese brand product as those are the origin countries of those companies, therefore Europe was seen as a very important market for them as this would effect the balance between them, in other words the most successful game console in Europe would likely take the lead in the market share, determine the outcome or end result of the video game console war. Europeans tend to buy whatever game console has the coolest games. The next generation of digital video players had also been developed, Toshiba had developed HD-DVD players which could also be added to Xbox 360 game consoles for an additional fee and Sony had developed Blu-ray DVD players which they also built in the PlayStation 3 consoles. Both DVD players features high definition DVD playback with one thousand and eighty lines of resolution, but were not compatible with each other and required separate formatted DVD discs.
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