Critical Time Line Analysis
Critical Time Line
The critical time line is a sequence of moves i.e. actions and reactions performed by the company and its rivals within the time continuum. It helps us in understanding the expected pattern of sequence in t+1. While constructing the critical time for the action-reaction sequence between Sony and Microsoft, the time period considered is between 2000 and 2017. The events considered are the generally the product announcements and their release, the initial pricing and the price adjustment later, the number of units shipped and sold, the product innovation disclosures as well as the financial updates.
SONY vs Microsoft (2000 - 2005)
When Sony released their first video game console under the brand name Playstation in September 1995 in North America, it was competing with the likes of Sega Saturn and Nintendo 64. PlayStation was initially supposed to be a joint venture between Nintendo and Sony to develop a CD-ROM add-on for Nintendo consoles in 1991. However, Nintendo later abandoned the partnership due to their apprehension over the control of Sony on the final …show more content…
Xbox 360 one year ahead of the PlayStation 3 release. They decided to secure the First Mover’s Advantage (FMA) with their second offering. Sony released PS3 a year later at a price which made it the most expensive console of that time. However, they justified the price by the inclusion of Blu-ray Disc player and high definition resolution. Sony reduced the price of PS3 in July 2007 and even though it was still higher than the Xbox 360, Microsoft entered the Bertrand competition being a Baumol type player. The action-reaction sequence continued for 3 iterations and then both the companies switched to Cournot competition revealing their shipments and enticing new customers by releasing new and exciting games. Thus, once again the Bertrand competition ended when Nash equilibrium was reached at price
The critical time line is a sequence of moves i.e. actions and reactions performed by the company and its rivals within the time continuum. It helps us in understanding the expected pattern of sequence in t+1. While constructing the critical time for the action-reaction sequence between Sony and Microsoft, the time period considered is between 2000 and 2017. The events considered are the generally the product announcements and their release, the initial pricing and the price adjustment later, the number of units shipped and sold, the product innovation disclosures as well as the financial updates.
SONY vs Microsoft (2000 - 2005)
When Sony released their first video game console under the brand name Playstation in September 1995 in North America, it was competing with the likes of Sega Saturn and Nintendo 64. PlayStation was initially supposed to be a joint venture between Nintendo and Sony to develop a CD-ROM add-on for Nintendo consoles in 1991. However, Nintendo later abandoned the partnership due to their apprehension over the control of Sony on the final …show more content…
Xbox 360 one year ahead of the PlayStation 3 release. They decided to secure the First Mover’s Advantage (FMA) with their second offering. Sony released PS3 a year later at a price which made it the most expensive console of that time. However, they justified the price by the inclusion of Blu-ray Disc player and high definition resolution. Sony reduced the price of PS3 in July 2007 and even though it was still higher than the Xbox 360, Microsoft entered the Bertrand competition being a Baumol type player. The action-reaction sequence continued for 3 iterations and then both the companies switched to Cournot competition revealing their shipments and enticing new customers by releasing new and exciting games. Thus, once again the Bertrand competition ended when Nash equilibrium was reached at price