Home Video Game

1 Why the speedy growth of Atari? Why the 1982-85 collapse? How did Nintendo rebuild the industry? What was its strategy? by and by Bushnell settled on Atari, his first construct was the simplest granulose, which people knew the rules immediately, and this blue could be played with only one hand. Then, Bushnell talked his way into a $ viosterol00 line of computer address from a local bank to start his business. By 1974, 100,000 Pong-like games were sold worldwide, and although Atari manufacture only 10 percent of the game, the company still made $3. 2 million that year.Atari had a rapid growth because it is a new industry, and Atari does not discombobulate any competitor at that time. So, Atari is the only company in this dwelling house tv game industry, and it has a huge power of supplier with no competitors and substitutes. After 1976, ab out(p) twenty different companies were crowding into the property videogame market, Atari still has much than 50% market sh are in th e industry. Until 1978, Atari estimated that totality demand would reach 2 million units. In 1982, Atari lost $500 in the first nine months of the year.Part of the blame for the collapse was hardened at the feet of an enormous inventory overhang of unsold games. With more(prenominal) and more new games hit the market, the average price would goes deplete and the profits goes down as well. Nintendo established a commanding worldwide position by the end of the decade. The first step of Nintendo was to independence video game engine room from Magnavox. Then, Nintendo tried to develop its own video game machine (Famicom) that unite superior prowess processing capabilities and low cost.In the US, Nintendo established a subsidiary named as Nintendo of America (NOA) by 1980, and Nintendo repositioned the market in U. S. NOA dog-tired about 2% of gross sales budget for advertising and also want out promotion partner, and it practiced careful inventory management in releasing its n ew games. In conclusion, Nintendo made an innovative new game corpse which had some matched advantages such as cheaper, superior mental image quality, faster hardware processing and a connector that can be used for future addition of a modem and keyboard. How was Nintendo commensurate to capture prise from the home video game business? First of all, with the video game industrys collapse, none of the company seems to have anything to do with the with the home video business except Nintendo. So, it was a big chance for Nintendo to command the video game business, and it was a good chance to negotiate and indorse other companies to develop games for its system. Secondly, Nintendo has good market position and distri hardlyion in United Stated.Thirdly, Nintendo has good game designing and engineering, and it uses the regulation, contract and patent license to limit the market share of other game companies. 3 How was Sega able to gain market share from Nintendo? With Segas first game Periscope, Sega built up a respectable export business. Then, Sega realized that great games operate sales and more powerful technology gave game developers the tools to develop more appealing games. Sega also licensed other companies to develop games for the Genesis platform, unless asked for lower royalty rates than Nintendo.Despite aggressive marketing in the 80s, it wasnt until the introduction of Sonic the Hedgehog in 1991 as a devise competitor to Nintendos Mario character that Sega was able to capture a meaningful essence of the market with its Genesis console. The key point was Genesis does what Nintendo dont, and Sega magnetic variation out sold Nintendos two to one. 4 Evaluate the competitive strategy of 3DO. What flaws can you see in 3DOs approach? The wad for 3DO was to shift the home video game business away from the breathing cartridge- base format and toward a CD-ROM-based platform.The belief at 3DO is that the superior storage and graphics processing capa bilities of the 3DO system would prove very attractive to game developers, allowing them to be far more creative. In turn, better games would attract customers away from Nintendo and Sega. The 3DOs strategy was to license its hardware technology for free. However, only a some 3DO titles were available by the Christmas period where reports suggested 150 titles, and sales of the hardware were slow. As can be seen, 3DO did good at its software, but bad at its hardware.As a result, 3DO announced that it would either sell its hardware system or move into joint venture. 5 How come the Sony Play seat has succeeded where 3DO failed? Sony set up a retail channel separate from its consumer electronics sales force, and Sony has a good intercourse with retailers before the launch to find out how it could process them sell the play station. Sony targets its advertising for PlayStation at specific multiplication and age range. So, Sony focused on it retailers and customers, and it has a good market position.On the other side, 3DO only focused on its products but lack of the communication with its retailers and customers. 6 What drove Microsofts decision to enter the industry with its X-box offer? Because before Microsoft entered the home video game industry, it was no stranger to games. Microsoft had big participated in the PC gaming industry and was one of the largest publishers of PC games. X-box was based on Microsofts PC technology, and it would be much easier for software developers to bring through game for.Microsoft enter the industry because with annual revenues in excess of $20 billion worldwide, the home video game industry is huge and an historic source of potential growth for Microsoft. 7 What lessons can be wise to(p) from the history of the home video game industry that has been used to help launch the Sony PlayStation II and Microsofts X-Box? Do Microsoft and Sony appear to have conditioned and applied these lessons? The lesson can be learned from t he history of the home video industry was to focus on R&D, market positioning, cost leadership, innovation, technology and communications.Sony PlayStation II has consumed about 1. 3 billion in R&D, and Sony in reality loses money on Sony PlayStation machine but gain from game CDs. On the other side, Microsofts X-Box cut X-box price over time but guaranteed a profit margin. There are three technical factors find out the quality of a video game data width (in bits), clock speed (in MHz), and the amount of RAM (in bytes). Both Sony PlayStation II and Microsofts X-Box have their own competitive advantage in these technologies, and they also both are good game designers.