With the video game industry being the fastest growing sector of the growing entertainment industry, the industry's revenue has now reached $26 billion in annual revenue and there is currently no indication of decline in the industry. So, in order to identify how the revenue is distributed, it's essential to look at the supply chain of the entire PS3 business. As seen in the supply chain, there are opportunities in many aspects of the console business, coming from the actual console sales as well as extras such as games.
The customers, as identified by our segmentation analysis table, are at the end of the supply chain, and their consuming of video games are distributes across several actors.
Additionally, the most known among the
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5.3 Business Models
There are several business models contributing to the revenue income for the PS3. Obviously, sales of the actual console initially generate the biggest revenue. But, as reported by several news agencies, Sony actually makes a loss on each console bought by a consumer. [26] As reported by several sources, a PS3 costs between $725 and $905 to manufacture, but is sold for $599 in the US market. The reason for the high manufacturing price is the high cost of components such as the Blu-Ray DVD, XDR memory etc. (More on that chapter 8).
To support several streams of revenue there are three business models for distribution supported by the PS3. Since the console is making a loss per sold unit, there are other ways for Sony to catch up on the income and make a profit in the console business through other business models. The business models are:
However, comparing the business models for the PS3 tells us that there are several possible models for generating revenue and profit for the console. Most notably, the Internet Gaming via the PlayStation network and the developer licenses are possible sources of potential profit.
6 Marketing Strategy
The Playstation 3 has a broad marketing strategy set by Sony. Launched with slogans such as "This is living" and "Play beyond", Playstation 3 is aiming for a large audience.
Thereby, Sony will have to apply a different marketing
After the acquisition of EB Games, GameStop rose as the leading video game retailer in its industry. In an effort to sustain their position, GameStop will have to tackle several technological and sociocultural issues that have arisen from its competitive environment. The strategic objective we wish to accomplish in this analysis is to formulate a viable strategy that will continue GameStop’s growth in the industry to remain as the go to video gaming store for the video gaming enthusiast.
Sony Corporation is a Japanese owned company, created in 1946 based in Tokyo, Japan. The company competes in the technology market with diversity. This includes video games, computers and computer hardware, television, media players, etc. With that being said, Sony has had their ups and downs over the past few years, just like everyone else in this industry. Things such as the U.S. economy can really affect the future of this company. Now that the economy is on the downfall, things such as entertainment are not as important as paying for food, gas, and other bills. It is important to realize these things as you analyze the company due to the fact that the company
The lifestyle of a hardcore gamer is to be antisocial around human beings, but through the connectivity of the Internet to be social and build friendships and relationships through video games. Xbox has created a live chat while playing video games to verbally speak to the gamers or instantly chat. The social class gamer is divided by the income category that they fall on. Upper and middle class have the ability to spend money on new consoles in the gaming industry, while the lower class does not have the funds to invest in all of the new consoles that are released. The most important key point of the demographic component is the behavior of a gamer. It is important to have a strategic target plan for any new consoles; however, behavior gamers are the marketing targets to any new innovation. Behavior gamers are the most loyal consumers and it has a significant amount of the profitability to the company. As a result, the three different components makes up the target market and is very crucial to be strategic with the plan and know the potential
For the industry analysis, we are certain of sales since the PS4 is a consumer product particularly. For that reason, the buyer has a high bargaining power on the product. The market for casual gamers has increased seriously and sales increased after decreasing price of the PS3. Due to the uniqueness of every video game console and the games buyers have bargaining power. A small difference might be significance an extra hundred dollars for an intense gamer. People have more aware to the price difference because they play video games more casually and as a result they have more bargaining power. Buyers have a reasonable amount of power in the video game industry in particular with Nintendo. Although Microsoft and Sony have other sources of revenues, the major source of income comes from the sales of games and game consoles.
Sony must reposition its “growth driven” and “stable profit generator” sectors in their markets to increase its audience, achieve sales growth, profit expansion and maximization, and capture market shares.
Team 2 has researched and completed a comparative analysis of Mattel’s supply chain design and related costs with that of its major competitor Hasbro and the toy industry. What follows, is a brief background of Mattel’s traditional (non-electronic game) sector, its key competitors and Mattel’s use of supply chain management concepts in addressing the competitive landscape to gain a competitive advantage. The global toy and game market grew by 7.2% in 2007 with a value of $106.1 billion and by 2012, is forecasted to have a value of $126.2 billion, an increase of 18.9% over 2007. The toy market is divided into three primary sectors, namely game consoles, game software and traditional toys and games. Traditional toys and
As sales of Nintendo’s Wii and DS dominate the PlayStation 3 and Xbox 360, and PlayStation Portable, respectively, the pressure continues to mount on Sony and Microsoft to move to the next level in the ongoing console wars. Sales of the Wii in 2008
Business models have a huge impact on how an organizations operate. It is crucial that an organization chose a business model before inception in order to succeed. Basically, business models have become the new basis of competition, replacing product features and benefits as the playing field on which companies emerge as dominant or laggards (Plantes, 2013).
The Xbox One has many strengths that can be used in order for it to become a profitable product.
Consumers spent $1.1 billion on new physical games and consoles at U.S. retailers during the five-week period from Aug. 31 to Oct. 4, 2014, according to industry-tracking firm The NPD Group. That is up 2 percent from $1.08 billion over a similar period in 2013. The year-long growth of new-console sales is making up for lackluster video game sales.
Overall, the market response to these three consoles has been surprising. Nintendo Wii, has outsold its rivals and more surprisingly, Sony’s PS2 has outsold PS3. This has let Microsoft and Sony with the enormous challenge of competing with a rival possessing two key advantages: a lower cost console and a product with a sound response in the market.
EPOC will gain more profit if it is console-enabled only, when compared with PC-enabled only. The retail sales console game is almost five times more than PC game as we can see from Exhibit 8 in this case. The retail sales of console software game is 6.6 billions of dollars, but PC is only 0.9 billions of dollars in 2007. Moreover, from this exhibit, we can see that the number of PC software game retail sale is decreasing year by year, from 1 billions of dollars to 0.7 billions of dollars in 4 years. Most of consumer purchases a
“To become a leading global provider of networked consumer electronics, entertainment and services.” That’s the mission of Sony, producer of the Sony Playstation. Sony, information and
The plan is to market these 3D releases by debuting in the consumer home with select Sony 3D products. This launching would be during the high-traffic holiday retail season which will be featured nationwide in the United States.
I recently entered a sector of the home entertainment market by purchasing a Playstation 3. The Playstation 3(PS3) is Sony Computer Entertainment’s third video game console which competes in the current seventh generation of consoles alongside Microsoft’s Xbox 360 and Nintendo’s Wii.