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RIVALRY IN VIDEO GAMES

Professor: Kyriakos Kyriakopoulos

Players: Natasa Zampeli

Dimitris Kanelakis

Andreas Raptopoulos

Vasilis Solidakis

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Rivalry in Video Games

Press Start

Level 1: Find the key factors

Level 2: Win or leave

Level 3: Fight the old guys

Level 4: Heading to the future

Level 5: The final battle

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PRESS START

After domination of SONY for 11 years up to 2006,

an entirely new situation was emerging at the beginning of 2007,

in the 7th generation of video games consoles,

that was shaping up into a three-way battle between

SONY, MICROSOFT, NINTENDO

$ 24 billion Worldwide Sales of the Video Games HW & SW (2006)$ 24 billion Worldwide Sales of the Video Games HW & SW (2006)

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Press Start

Level 1: Find the key factors

Level 2: Win or leave

Level 3: Fight the old guys

Level 4: Heading to the future

Level 5: The final battle

Rivalry in Video Games

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COMPETITIVE SOFTWARE TITLES Sega VS Nintendo in 1993, Sony in 1995

XBox major weakness in 2001

MOST ADVANCED TECHNOLOGY

Sega VS Nintendo in 1993 (16-bit VS 8-bit era)

Sony in 1995 (32-bit VS 16 bit era) PS2 in 2000

MANAGING COORDINATION & LOGISTICS FOR A

SUCCESSFUL PRODUCT LAUNCH

Lack of PS2 in 1998

LEVEL 1: FIND THE KEY FACTORS

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LEVEL 1: FIND THE KEY FACTORS

This was all true up until the sixth

generation.

Currently, as the basis of the competitive

advantage changes (commoditization of

technology, games available for multiple

platforms, multifunctional hardware)

so does the dynamics of the market.

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Press Start

Level 1: Find the key factors

Level 2: Win or leave

Level 3: Fight the old guys

Level 4: Heading to the future

Level 5: The final battle

Rivalry in Video Games

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LEVEL 2: WIN OR LEAVE

A fast-pace, dynamic industry demands effective

strategy combining clarity of vision with flexibility

and responsiveness.

Up until 2007, the gaming consoles customers

gravitate towards the market leader. So one firm

dominated the market and scooped most of the

industry profit pool.

The one that better understands the sources of

competitive advantage and assembles the

resources needed to exploit them is the one that

eventually wins and gets the big money!

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LEVEL 2: WIN OR LEAVE

Winner winnerchicken dinner

Competitive advantage

1972-1985: Atari 2006(4-bit consoles)

The first home video console to acceptinterchangeable cartridges

1986-1991: Nintendo NES(8-bit consoles)

Careful management between HW &SW (tight control to game developers)

1992-1995: Sega Genesis(16-bit consoles)

Great variety of gaming titles

1995-1998: Sony Playstation

(32 & 64-bit consoles)

Fierce marketing campaign

Huge library of titlesFast lead time

1999-2005: Sony PS2(128-bit consoles)

Brand equityBackwards compatible

2007: Sony PS3, Xbox 360 Multi-functionality,

Online capabilities (eg. Xbox live, PSN)

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Press Start

Level 1: Find the key factors

Level 2: Win or leave

Level 3: Fight the old guys

Level 4: Heading to the future

Level 5: The final battle

Rivalry in Video Games

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LEVEL 3: FIGHT THE OLD GUYS

8-bit Era (Nintendo VS Atari)Tight Control of game supply by

carefully managing their quality and

releases

16-bit Era (Sega VS Nintendo)

Marketing strategy

Targeting a wider audience

Genesis what Nintendont

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LEVEL 3: FIGHT THE OLD GUYS

32/64-bit Era (Sony VS Nintendo & Sega)Preparation before launch with many titles

available

Smart Marketing

Exploitation of Sony Brand

Many titles, but less copies per game

128-bit Era (Microsoft VS Nintendo, Sony & Sega)

Powerful console

Recruitment of games and game creators

Targeting not only games but electronic

entertainment in general

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Press Start

Level 1: Find the key factors

Level 2: Win or leave

Level 3: Fight the old guys

Level 4: Heading to the future

Level 5: The final battle

Rivalry in Video Games

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Innovation & mechanisms to protect it

Technical standards

Patents

Lead time

Secrecy

Complementary resources

Finance

Manufacturing

Marketing

Distribution & sales network

Service

Complementary technologies

LEVEL 4: HEADING TO THE FUTURE

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Develop multi purposing consoles

Control and reduce production costs

Joint ventures

Outsourcing

Strategic alliances with software companies

Support each new launch with many & good titles

Broaden segmentation (e.g. learning entertainment, AAL

Ambient Assisting Leaving for elder or disable people)

LEVEL 4: HEADING TO THE FUTURE

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Press Start

Level 1: Find the key factors

Level 2: Win or leave

Level 3: Fight the old guys

Level 4: Heading to the future

Level 5: The final battle

Rivalry in Video Games

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Video games is a very competitive and still growing business

Innovation and technology make the difference

Before 2007 winner take - all industry

After 2007: competitors can exist at the same time

Complementary resources are critical

Protection of innovation is a strategic factor

LEVEL 5: THE FINAL BATTLE