Competitive Dynamics
Game developers, or the software producers, are mainly concerned with competition in their specific genres. Whether it is a role-playing game (RPG) or a fighting game, it is unlikely that competitions will cross over. This is because they have different customer demand for each genre. For instance, RPGs demand better graphics while fighting games concentrate on the game play. Therefore a developer has to look at the game’s content (story and game play), quality produced (graphics), and customer loyalty in their respective genres to take full advantage of the competition. The race for game development is always wide open with the various genres, but those with loyal fan bases will have the upper hand. Developing franchises like the Mario series is not an easy task since you have to keep consumers from being bored over a long period of time. Customers will not buy games that are similar in nature, and they are always looking for something new and innovative from one game to the next. Franchises are, therefore, difficult to maintain.
Game publishers are constantly looking for titles that have potentials to be great hits. They use brand names and reputations to sell their published products. Publishers must have good game developers in order for the games to be more marketable to the public. Thus, constant and careful evaluation of their developers’ creativity, consistency, and use of technology is crucial. Electronic Arts is a good example with its successful Madden NFL and NBA Live franchises. It has its own internal developers which can easily communicate information to its own publisher, EA Sports. Having everything internal is a great advantage for Electronic Arts and it propels the company to be the top publisher as mentioned in the first post.
Console manufacturers differentiate itself by technical capacities, price, and game titles available in the console world. In 2007, the battle for supremacy among game console manufacturers is primarily between Sony’s Playstation 3, Microsoft’s XBOX 360, and Nintendo’s Wii (view comparisons here). They are still at the beginning stage of the next-generation console war. The latest global sales of next-generation consoles indicate the rapid growth of Wii sales while XBOX 360 and Playstation 3 are cooling off.
Nintendo’s Wii capitalizes extremely well as it provides more interactivity and a whole new gaming experience. These features are boosting Wii’s sales and it is separating itself apart from the competition. In the meantime, Microsoft is trying to maintain its lead by releasing an upgraded version of the XBOX 360 called the XBOX 360 Elite. Such a move is questionable since consumers who have already owned an XBOX 360 is not likely to spend more on unnecessary functions. Sony has not made a news-breaking move yet to enhance its sales, but I bet that it is counting on the game titles to sell its machines. Sony’s Playstation series has always had strong software to support its system dating back since its original release in 1995. Whatever the cases maybe, I think that the Wii holds the upper hand because of its fresh approach to console gaming, and it has given consumers all over the world an eye-opening experience.
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4 comments:
I take an alternative view on the release of the xbox 360 elite. You are right that existing users don't have any use for extra components, but MS target should be the new gamers not the existing ones. With a HDMI interface and a 120gb hard drive you have everything you need to game in HD. The 120gb drive I'm sure you know will act as a welcome mat for pirates to mod the drive to store entire games. This is the perfect time (as opposed to during the initial release) because this news comes on the heels of MS announcing that they finally plan to break even on the hardware sometime later this year. (http://www.xboxic.com/news/2822). You take the good gamers with the bad with this move, but nevertheless you still get volume, which is what microsoft needs in this war with Sony and Nintendo. Lastly, it puts the Xbox 360's price right below the PS3 core system ($499) but with 100gb more space for you know what.
I agree with Ben's comment. I think Microsoft is really targeting the new gamers, especially those who hesitated to buy a game console because of not knowing which format will become mainstream before. Microsoft's goal is perhaps like how they dominated in the OS sector. They want all gamers and more people to be playing the XBOX 360.
As for the Wii, I think the sales will hit a peak shortly, and eventually its revenue model might not work unless it releases more accessories and/or more fresh and attractive games.
I think that this an attempt by X-box to protect their investment. They were probably the first to take online gaming into the console realm the way they did. But aside from capturing new consumers, I think that their decision to launch the 360 elite may have alot to do with the fact that competitors are coming up with their own versions of online capabilities. It's no longer attractive to offer the same functionalities or allow a competitor to cannibalize your market share. For those new consummers-offer them new functions, something the competitors haven't yet done with their me-to products. Also give those existing customers a reason to stay loyal when they decide to upgrade.
While writing my blog, I am really impressed with EA. Even though they do not have the best quality graphics compared to other games, they know the market and is able to develop games for the different platforms so successfully.
Some additional information... According to information from a video game class in USC, the game industry is heavily hit-driven. 5% of the game titles account for roughly 95% of sales in 2005. An in another article that I read, game developers tend to try to develop sequels for games instead of coming up with new titles because squels sell better.
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