Cash Cow: Nintendo
Question: Sony
Dog: Microsoft
In the gaming industry, all of the competing companies – Sony, Nintendo, Microsoft, etcetera – have something to offer everyone. The question though is which company is selling the most and making the most money? Doing a BCG analysis, I’ve learned where most of these companies stood, in my opinion.
In the Stars position -we talked about it in class and I thought it was spot on- are the games for the smart phones or iphones, they are the most popular since they can be taken anywhere and can be played for hours on end; like the game Angry Birds. It’s free, but people tend to buy the upgraded version for the special levels and for more hours of fun.
People want simple games when they travel, and can download good quality games for 99cents or less.
The cash cows are - in my opinion - is Nintendo. They’ve been around for a longer time and have come out with great games for almost every generation when video games started getting more advanced. At the moment, they are the hottest on the market, for the games they are releasing to the systems they are releasing as well.
“With the DS and Wii, Nintendo has two hit consumer products and in the minds of the investment community that can make the company as valuable as all of Sony Corporation.” http://www.lunabean.com/news/20070629_video_game_market_analysis.php
The question mark is Sony. It all depends on what they come out with if it’ll be their downfall or their winning ticket. After they made the PS3, they seemed to go downhill in sales from the outrageous prices for the consoles.
“Sales data shows that while the introduction of the PlayStation 3 and PlayStation Portable were initially greeted warmly, potential buyers quickly lost interest because of a lack of games. The fact is that games drive sales of video game hardware. Sales of the PlayStation 3 have also been hampered by its price tag of $800, which is significantly above prices for the Xbox 360 [$400-$600] and the Wii [$250].” http://seekingalpha.com/article/40770-the-video-game-industry-nintendo-back-in-the-lead
The dog at the end of this list is Microsoft, for their Xbox. They put more money into their consoles then they could get from it in sales.
“In terms of long-term strategy it is worth comparing Microsoft and Sony. Microsoft has shown an even greater willingness to lose money to try and build long-term market share. The Xbox 360 was the system that could benefit most from the PS3's slow, late start. One of the biggest events (or non-event) over the past year is that the Xbox 360 did little to solidify its lead.” http://www.lunabean.com/news/20070629_video_game_market_analysis.php
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