Big Players in the Console Gaming Area and Porter

From a console gaming perspective, Microsoft again sees low threat of entry. At this time, the major players have been set as Microsoft, Nintendo and Sony. Between these three companies, all voiced consumer interests and demands are being filled. There would be very little that a new firm could do to differentiate a new gaming console from anything these three companies currently do or will do with their next generation. They have also been producing these systems long enough to understand how to minimize their costs with the components they choose, leaving little chance for cost advantage.
Threat of Rivalry
The threat of rivalry is relatively low for Microsoft. From an operating system standpoint, there are not many competitors who make operating systems. Because of this, Microsoft does not feel that they need to constantly be surveying a large amount of companies to see what price or sales trends are occurring. Prices are rather static because of this. The only type of differentiation created between operating systems is what software it can run. However, the number of software packages that are only available on one platform are getting smaller every year. One thing to mention would be that Windows can be installed on Apple hardware, while Mac OS X cannot be installed on a large majority of non-Apple products (with the exception of building a Hackintosh which would require more knowledge than most casual computer users have.)
However, the gaming division of Microsoft is under a high threat of rivalry from Nintendo and Sony. It is standard practice to make large price cuts to game consoles every six to twelve months as production costs decrease, and there is a constant “console war” going on. As soon as a console is released, a new one begins R&D. Nintendo announced they will unveil their successor to the Wii (The Wii U) at E3 this year, and the spec information for Sony’s forthcoming console has started leaking to news media.
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