Implications for the Video Game Industry
Agenda
The Video Game Industry Disruptive Technology Nintendo’s Disruptive Strategy
• Dominated by Industry Leaders • Customer Base Declining • Creates a New Market • Creates a New Value Network • New Market: Adults and Children • New Value Network: Simplicity & Exergaming
• Excellent Graphic Capabilities Nintendo’s Competition • High Development Costs
Recommendations for • Saas Video Games Nintendo’s Competitors • Focus on Youth Markets
Industry Environment & Products
Environment
Dominance of 3 industry leaders
• 2000 • 2006 • 2007 Sony Microsoft Nintendo
Products
Technologically Advanced
• Fast Processing Speed • High Definition Video • Complex Games
Young Adult Customers
• Mostly male • Late 20s - early 30s • Disposable Income
Multi-use consoles
• Movies • Music • TV Shows
Shrinking Customer Base
• Occasional gamers stop playing • Few new gamers
Internet Gaming
• Social-networking • Virtual World • In-game Ads
Industry SWOT Analysis
STRENGTHS
• HD & Graphics • Developing Complex Games
WEAKNESSES
• Attracting new gamers • Targeting multiple customer segments
OPPORTUNITIES
• Web-enabled gaming • In-game advertising
THREATS
• Increasing game complexity requires more sophisticated consoles • Must sell consoles at a loss
Significant Milestones in Video Game Console industry
1967
First video game console Brown Box
2000
Sony released PS2
2001
Microsoft released Xbox
1972
First commercial video game console Magnavox Odyssey
1996
Nintendo released N64, last mass market system to use Cartridges
2001
Nintendo released Game Boy Advance
1975
By Atari Inc, First Commercially successful video game, Pong
1995
Sony launched PS
2004
Nintendo launched DS, portable console, Wi-Fi enabled
1977
Atari VCS, Cartridge based system played multiple games
1991
2005
Nintendo launched Super NES in US