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Introduction
What is Xbox?
Gaming Market
Competitive Advantage
Microsofts Current Marketing Strategy
Recommendations
References
What is XBOX?
Xbox is an entertainment hub that provides users:
± High Quality Video Games
± DVD Player
± Internet Support
- Online gaming
- Web surfing, Checking E-mail, etc.
± Audio/Video System
- Create soundtracks
- Supports HDTV and TV resolutions up to 1920 x 1080.
Microsoft Motives in Entering
Game Console Market
One of the initial reasons for Microsoft entering the games
console market was that they believed they could use its
software expertise to aid it hardware-game industry. It was
looking to expand from its focus mainly on PC¶s and
laptops. It was looking for diversification in the video games
market
If Sony were to continue unchecked in games console
development, Microsoft feared it may lose significant PC
sales supported by gaming
Market Size
Total Gaming Market Size: $50 Billion, 2001
2001 total market served by Xbox: $18.5 Billion
2006 total market served by Xbox: $47 Billion
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Market Share
The console market has few players
± Sony owns 45% of the console market
± Sega exited the console market this year
Gaming Value Chain
The value chain in the game industry
± A few strong incumbents are leading the market
± Content companies and console makers are
creating the capabilities to control the consumer
± Content companies are creating platforms and
consolidating to create economies of scale
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Recommendations: 3 P+s
Pricing: Increase price point $50, to $349
± Aid in positioning as higher quality: oPrice = Performance
± Reduce loss per unit
± Non-Price Competitive signal to Sony and Nintendo
Positioning: Target online gaming niche by focusing on
Internet Gaming as the KEY differentiator
± Ability to improve prices as a result
± Dominate online gaming market niche
Partnerships: Increase game development network
± Tap entertainment industry for band and creativity
± Online gaming developers
Recommendations Cont.