Video game Essay

Submitted By xzy9332
Words: 893
Pages: 4

From the table it can be seen that there are five key issues which are in high urgency. In these 5 key strategic issues, two of them are short-term issues and the others are long-term. Sony and Microsoft are too much focus on niche markets which restrict them from increasing in other user groups. Sony and Microsoft should aim to increase their game diversification in order to attract more customers and to be more competitive. According to the customer survey in 2011, the results reveal the change in buyer market served in video game console industry which shows that the majority age group of console players is ranged from 12-30 and there are even 26% players aged of 55-64. However, hardcore gamer that mainly teenagers players are the primary targeted market of Sony and Microsoft while the target audiences of Nintendo are more causal with more women and older players. Therefore, the market segmentation could be a key strategic issue of Sony and Microsoft that need to be addressed in the short-term. The second strategic issue is lack of financial resources of Nintendo result in an insufficient investment in R&D department and less expertise game developers. Nintendo are not propitious by many industry observers for the reasons of less competitive financial and technology resources compared to Sony and Microsoft. Even it captured a big market share by the launch of Wii, the quality of graphics and speed of Nintendo video games are still underpowered. Moreover, it lacks of hardware development such as online game playing and DVD players which is also a big threat of the company because the strategies of its competitors Sony and Microsoft are based on the assumption that video game console are shifting to the multifunctional home entertainment with Internet connectivity and movie watch. The third key strategic issue is the over reliance on the US market which is approaching to the maturity stage. Once the market gets close to maturity stage, the growth opportunity of sales revenue and market share would be decreased gradually. As seen from the table, the console sales in US declined by 2.2% from 2011 to 2012. This means that companies need to explore new emerging markets in order to maintain the total revenue margin. Chinese video game market is now in the growth stage with a largely increasing in its sales revenue. This is partly because government suspends the ban on video game encouraging the growth of console market in China. The customers’ need varies in Chinese and American market thus the companies need to identify how to differentiate the product in order to satisfy the interests of different customers. The fourth key issue is the increasing competition of handheld game-playing devices and online free games. Nowadays, video game console industry is expected to face a fierce competition from de4many other game substitutions. This is because today choices of video game devices are much wider than the past as the big evaluation of game platforms such as the smart mobile and other portable devices. Video game has been largely shifting from home-based devices such as consoles and computers to handheld devices such as mobile phones. People now are more likely to download free games online compared to purchase video game consoles from retailers. Apple as the leader of music market with iPod and iTunes tend to extend its market share by entering the video game market. Apple has introduced iPad in 2010 which is positioned as a device used to play games. The last key strategic issue is the high digital piracy rate largely threads the video game consoles sales. Video game piracy and unlicensed video game consoles are a big threat of original video games sales. The data shows