marketing
Chapter 13
CRAFTING A
DEPLOYMENT
STRATEGY
McGraw-Hill/Irwin
Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Deployment Tactics in the U.S.
Video Game Industry
• After the Atari/Coleco video game generation crashed, Nintendo was able to enter with an 8-bit system and rise to dominance by selling on consignment, alleviating retailers’ risk. It had a near monopoly from
1985-1989.
• In 1989, Sega was able to overthrow Nintendo’s dominance by introducing a 16-bit system 1½ years before Nintendo.
• Sony was able to break into the video game industry by introducing a
32-bit system, investing heavily in game development, and leveraging its massive clout with distributors.
• In late 2001, Microsoft entered the video game industry with a 128-bit system. It had an advanced machine, and spent a lot on marketing and games, but Playstation2 (also 128-bit) already had an installed base of
20 million.
• In late 2005, Microsoft introduces the Xbox 360, beating the
Playstation3 to market. Would it be able to displace Sony as the dominant console producer in this generation?
13-2
Deployment Tactics in the U.S.
Video Game Industry
Discussion Questions:
1. What factors do you think enabled Sega to break Nintendo’s near monopoly of the U.S. video game console market in the late
1980s?
2. Why did Nintendo choose to not make its video game consoles backward compatible? What were the advantages and disadvantages of this strategy?
3. What strengths and weaknesses did Sony have when it entered the video game market in 1995?
4. What strengths and weaknesses did Microsoft have when it entered the video game market in 2001?
5. Comparing the deployment strategies used by the firms in each of the generations, can you identify any timing, licensing, pricing, marketing, or distribution strategies that appear to have influenced firms’ success and failure in the video game industry?
13-3
Overview
• A large part of the
CRAFTING A
DEPLOYMENT
STRATEGY
McGraw-Hill/Irwin
Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Deployment Tactics in the U.S.
Video Game Industry
• After the Atari/Coleco video game generation crashed, Nintendo was able to enter with an 8-bit system and rise to dominance by selling on consignment, alleviating retailers’ risk. It had a near monopoly from
1985-1989.
• In 1989, Sega was able to overthrow Nintendo’s dominance by introducing a 16-bit system 1½ years before Nintendo.
• Sony was able to break into the video game industry by introducing a
32-bit system, investing heavily in game development, and leveraging its massive clout with distributors.
• In late 2001, Microsoft entered the video game industry with a 128-bit system. It had an advanced machine, and spent a lot on marketing and games, but Playstation2 (also 128-bit) already had an installed base of
20 million.
• In late 2005, Microsoft introduces the Xbox 360, beating the
Playstation3 to market. Would it be able to displace Sony as the dominant console producer in this generation?
13-2
Deployment Tactics in the U.S.
Video Game Industry
Discussion Questions:
1. What factors do you think enabled Sega to break Nintendo’s near monopoly of the U.S. video game console market in the late
1980s?
2. Why did Nintendo choose to not make its video game consoles backward compatible? What were the advantages and disadvantages of this strategy?
3. What strengths and weaknesses did Sony have when it entered the video game market in 1995?
4. What strengths and weaknesses did Microsoft have when it entered the video game market in 2001?
5. Comparing the deployment strategies used by the firms in each of the generations, can you identify any timing, licensing, pricing, marketing, or distribution strategies that appear to have influenced firms’ success and failure in the video game industry?
13-3
Overview
• A large part of the