Essay on Week 5 “Case Analysis: Video Game Console Industry in 2012”

1250 Words Jan 24th, 2014 5 Pages
Week 5 “Case Analysis: Video Game Console Industry in 2012”
Grantham University BA490
Business Policy and Strategy

Case Analysis: Video Game Console Industry in 2012 Page 1
Executive Summary The video game console industry is a very competitive segment. This segment requires a keen eye on product development as well as strategic product marketing and a rather large logistics arm to ensure rapid distribution to targeted areas. Video game industry in the US, which is hugely driven by retail sales of software and hardware, registered revenues of USD ~ million in CY'2012. Even so with the advent of new video game players in the industry, the revenues decreased by 11.7% compared to
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(D’Angelo,2013). If the market shares were broken down by the big three it would look like this for 2013: Sony’s PS3 30.4% Nintendo’s Wii 39%, and Microsoft’s Xbox 360 30.4%. (D’ Angelo,2013). Looking beyond the market share,
Case Analysis: Video Game Console Industry in 2012 Page 3 sales dropped during 2013 due to lagging interest in game titles and anticipation of new console release.
Decision Criteria and Alternative Solutions Decision to enter the video game console industry would be based on strategic timing. Most consumers view gaming consoles as a generation when released. If a gaming console is released before others than it could not be considered “next-generation.” Timing is also important in the aspect of capturing a sagging market before the competition releases newer products. Another decision is what price the console should be sold for. The price must be enough to penetrate the market but, still enable the entry company to make a return. A good way to do this is to come into the market with a good price point slightly below the competition’s products and once sales are established lower the price of the gaming console. Another way to enter the market is to offer a competitive price and free product/web content. All of these mentioned decisions must me made prior to implementing a plan to enter the video game console industry. Without weighing these considerations a product launch will fail.
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