Deployment in the Video Game industry

1
Deployment in the Video Game industry
2

• The different generations of competition can be
  summarized in certain important strategies, which
  focus around
• Timing
• Licensing and compatibility
• Pricing
• Marketing
• Distribution

3
Timing

• being willing to cannibalize existing generations
  before competitors do, and
• timing introduction to coincide with the
  Christmas selling season.

4
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.

5
Pricing

• consoles must be priced at or below cost,
  somewhere under 300 in order to facilitate
  Christmas sales.

6
Marketing

• aggressive advertising and promotion, with
  preannouncements about upcoming product
  introductions.

7
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 Segas
  mistake with the Saturn).