1. How attractive is the video game console industry in 2008?

2. As Sony attempts to regain industry leadership from Nintendo, what lessons should Kuzuo Hirai learn from the history of the video game industry? How has the structural attractiveness of the industry changed over time?

3. What are Sony’s strategic options for regaining industry leadership? As Kazuo Hirai, which option would you pursue?

1. The video games industry is the economic sector involved in the development, manufacturing and selling of electronic gaming devices, software, and accessories. The case study focuses on video game consoles (also known as platforms), electronic systems that are primarily used for playing video games on a TV. In the past decades, the video game industry has become a huge part of the entertainment industry: it started as a small market niche in 1972 and, since then, has rapidly grown from focused markets to mainstream. I chose to use “Porter’s Five Forces” model to better understand the underlying factors influencing the overall attractiveness of the video game industry.
Intensity of rivalry: historically, a high level of concentration has characterized the video game industry since the beginning, with few firms dominating the entire market. In 2008, Nintendo, Sony and Microsoft were controlling the majority of the market and the intensity of rivalry was quite low. Having said that, the fight for market shares between these 3 leaders has always been intense even if, thanks to the rapid growth of the market, a price war was never started. This doesn’t mean that all the consoles had the same price-positioning strategy: in 2008, there were consistent pricing differences between the three products and companies strove to... [continues]

1. How attractive is the video game console industry in 2008? In 2008 the video game industry is dominated by three