Transcript Deployment in the Video Game industry

Deployment in the Video
Game industry

The different generations of competition can be
summarized in certain important strategies, which
focus around
Timing
 Licensing and compatibility
 Pricing
 Marketing
 Distribution

Timing


being willing to cannibalize existing
generations before competitors do, and
timing introduction to coincide with the
Christmas selling season.
Licensing and compatibility



making new generations of video game
consoles backward compatible with previous
generations;
licensing third-party developers to produce
games (though still producing games in
house).
Profits are made off of game royalties so it is
not effective to license console production to
others because they will not be able to
subsidize console price with game royalties.
Pricing

consoles must be priced at or below
cost, somewhere under $300 in order to
facilitate Christmas sales.
Marketing

aggressive advertising and promotion,
with preannouncements about
upcoming product introductions.
Distribution



leveraging distributor relationships (as Sony
did),
providing guarantees if necessary (as
Nintendo did with its early consignment
policies),
making sure that a wide range of distributors
receive sufficient shipments (to avoid Sega’s
mistake with the Saturn).