Subject category:
Strategy and General Management
Published by:
IBS Case Development Center
Length: 14 pages
Data source: Published sources
Topics:
Video game console industry; Cyclical nature of industry; Game software business; Sony Playstation; Microsoft Xbox; Nintendo's GameCube; Electronic Arts Incorporated; Game royalties; Console sales; Backward compatibility; Price cuts; Microsoft's XNA; Electronic Entertainment Expo (E3); On-line gaming
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Abstract
Growing at a pace of 11% CAGR (compound annual growth rate) and fast surpassing the revenues of Hollywood, the video game industry has baffled the media and entertainment observers. Led by Sony''s PlayStation series of consoles, the industry has weathered the slump of the late 1990s that lowered everything from Internet stocks to computer sales. The booming industry caught the sights of Microsoft, which launched its Xbox console in the late 2001. Analysts believed that the arrival of Xbox would end the supremacy of Sony''s PlayStation. The case study presents the efforts of Sony and Microsoft to grab the market share from each other by using their incumbent strengths. The case also highlights both Sony''s and Microsoft''s efforts to popularise on-line gaming, which experts say would be the next battlefield.
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Abstract
Growing at a pace of 11% CAGR (compound annual growth rate) and fast surpassing the revenues of Hollywood, the video game industry has baffled the media and entertainment observers. Led by Sony''s PlayStation series of consoles, the industry has weathered the slump of the late 1990s that lowered everything from Internet stocks to computer sales. The booming industry caught the sights of Microsoft, which launched its Xbox console in the late 2001. Analysts believed that the arrival of Xbox would end the supremacy of Sony''s PlayStation. The case study presents the efforts of Sony and Microsoft to grab the market share from each other by using their incumbent strengths. The case also highlights both Sony''s and Microsoft''s efforts to popularise on-line gaming, which experts say would be the next battlefield.