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Blue Ocean Strategy - Video Games

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Submitted By krmyrick
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I’ve always been intrigued by the competitive landscape of the global video game console industry. As a child, video games accounted for a large share of my leisure activities and I’m fortunate enough to have witnessed the transformation over the past 2 decades. The blue ocean strategy has been an elusive goal of this industry that thrives on “innovation”. My analysis will evaluate the current state of the industry and my perception of its competitive landscape. Key companies in this industry are Sony, Microsoft, and Nintendo. I will use Microsoft for the Four Actions Framework.

The industry players have begun a strong push toward differentiation in hopes of finding a blue ocean. Competition bloodies the ocean but the threat of new entrants is relatively low. Unlike most industries, new advances are introduced with every new product. These companies have the luxury of 5-8 year spans before being forced into releasing their “next big thing.” Sony and Microsoft seem to be on a similar playing field with Nintendo targeting a completely different sector of the market. A decade ago, Nintendo created its own blue ocean with its Wii system and has been little contested since. The compelling question for Microsoft and Sony, is “who will ultimately win the gaming console battle?”

Strategy Canvas

The factors affecting the current state of play in the gaming console market are listed below:

- Price of consoles: Microsoft and Sony compete closely in the area of price. No one competitor has a clear advantage. Nintendo, targeting a younger, more family-oriented market is priced much lower than Sony and Microsoft.
- Software/ Games: To the avid console connoisseurs, the console’s software capabilities and games are a key factor in choosing which system will be bought. Number of titles offered is a driving factor for this category. Afterall, we are…...

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