Analysis Of The Video Game Console Market Essay - 1891 Words

Five Forces Analysis Threat of New Entry When it comes to entering the video game console market there are a lot of costs that are incurred. This limits the amount of competition that is coming in from an outside source. Microsoft spent over 100 million dollars on research and development alone for the Xbox one controller (Ron, 2013). This is a huge cost that new companies usually cannot absorb when first starting out. There is also a huge cost difference from new producers and long standing producers due to experience and the economies of scale that the top companies have. The last factor that really deters companies from entering the console game is the fierce brand loyalty that inhabits the video game market. Most consumers once they pick a side stick to it, this can span as far back as childhood. On release the PlayStation 4 had better specs then the Xbox One, and yet 42% of previous Xbox owners choose the Xbox One over the PlayStation 4 (Sakraida, 2014). Competition In the gaming industry competition comes from every direction. The most commonly thought of outside sources of competition are the PC industry and mobile gaming industry. The television movie and television industry are also competing to fill the entertainment void in people’s lives. That being said the competition we will be looking at is between the top two producers of gaming consoles, Sony and Microsoft. Sony and Microsoft with their PlayStation and Xbox consoles respectively have veryShow MoreRelatedEssay on Week 5 â€Å"Case Analysis: Video Game Console Industry in 2012†1266 Words   |  6 Pages Week 5 â€Å"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. 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