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The Oxbow One has been branded as an all-in-one entertainment system. It will change the way people experience home entertainment. Microsoft must continue to develop innovations with the Oxbow One to differentiate itself from its competitors, develop promotions that will position itself as a brand leader, design exclusive new video game titles, and work with distribution partners to control costs. Situational Analysis Introduction 2014 saw the release of the eighth generation of video games consoles. This includes the Microsoft Oxbow One, the Sony Palpitation 4, and the Nintendo WI U.
Although, these companies are competing against each other for market leadership, they also face competition from smartness, tablets, and smart TV’s. Some analysts have predicted that the eighth generation will be the last generation of home consoles due to the proliferation of these other devices. The Oxbow One had a respectable first year of sales with 3 million units sold by December 31, 2014 and 5 million units sold by April 18, 2014. However, the Palpitation 4 has led the Video Game market in units sold.
Microsoft has tried to redefine the new Oxbow console as more than Just a video game console, but rather an all-in-one entertainment system. ” However, Microsoft has failed to brand the Oxbow One in this manner. This marketing plan will evaluate opportunities to strengthen that brand in order to improve the position of the Oxbow One and increase growth in sales. Microsoft must also be prepared to deal with threats from its primary competitors (Nintendo and Sony) along with secondary competitors such smartness and tablets.
In September, 2014, nearly 60% of adults reported that that they’ve played video games within the past month on at least one platform, indicating that video games eave become a prominent source of entertainment for the majority of consumers. (Harlan, 2014) However, the market has also undergone shifts in the past several years with the explosion in popularity of mobile games and the rise of digital distribution, especially within the PC gaming segment of the market.
The Key External Drivers to growth in the industry have been per capita disposable income; time spent on leisure and sports, consumer confidence index; percentage of services conducted online; and trade-weighted index. (Kahn, 2014) In five years leading up to 2014, industry revenue increased at an average annual ate of 0. 7%. In 2014, the revenue is expected to total $40. 9 billion, well below the peak of $42. 9 billion prior to the “Great Recession”. Due to the lengthy wait between new video game console releases, the industry has long been dependent on add-ones and accessories to retain consumer interest.
The release of Kinetic, a motion sensor for the Oxbow 360, partially offset significant declines in industry revenue. (Oxbow, 2014) The growing library of games for each of the major consoles has steered many consumers toward low-cost, powered video games. However, analysts expect rowing consumer incomes, the late-2012 release of the WI U and the 2013 release of Oxbow One and Palpitation 4 to lead to a 4. 3% revenue growth in 2014. Consumers spent $1. 1 billion on new physical games and consoles at U. S. Retailers during the five-week period from Gag. 31 to Cot. , 2014, according to industry- tracking firm The NYPD 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. Future gar n expectations tort the Video Games industry nave been significantly treated, as the picture of the market for gaming on mobile platforms becomes clearer. Since mobile games are sold at much lower prices compared to traditional console and PC games, their rise may foretell a slowdown of the video game market in the United States.
While the recent launch of the next generation video game consoles is expected to rekindle interest in the more expensive console gaming market, the rise of low-cost, low-margin mobile gaming market may weigh on the overall gaming market. Consequently, this is expected to pull revenue downward as consumers pay less per hour for gaming entertainment. Revenue is expected to reach $47. 4 billion in 2019 as a result of the expanding population and an increased percentage of Americans who play video games, as the game-playing generation ages.
This represents an average annual growth of 3. 0% during the next five years (Exhibit 2). Customer Analysis Although the tendency to play video games declines with age, a large share of consumers from all age groups, report playing, including close to one third of men and women aged 55 and older. (Harlan, 2014) This indicates that the gaming industry now caters to a diverse audience, and while demographics differ for the arioso gaming platforms, the concept of who gamers are is rapidly changing to include consumers from various genders, ages, and ethnic backgrounds (Exhibit 1).
Approximately one third of adults who play video games said they don’t like games that rely too much on in-app purchase, and 27% agree that video games are too expensive. In addition to the cost of gaming, finding games that consumers know they will like is a challenge, which speaks to the importance of free trials and demos. Although the free-to-play model can potentially address the issue of cost, it can also lead to consumers spending more money in the long run. The gaming industry is undergoing seemingly competing trends.
Although the majority of adults now play video games, many companies struggle to maintain profitability with their titles. This is particularly a challenge on mobile platforms where numerous free game APS make it difficult to stand out in the crowd and the free-to-play model challenges traditional modernization strategies. As digital distribution becomes more popular for the computer and console game markets, it is likely that alternate modernization models will become more prominent on these platforms as well.
In the computer gaming space, this is already occurring wrought the success of widely popular games that do not charge an upfront fee. Given that a large share of gamers dislike in-app purchases, companies may need to address the negative perception that many consumers having regarding this model. Competitor analysis Sony Palpitation 4 The Palpitation 4 (ASS) is a video game console from Sony Computer Entertainment. It was announced as the successor to the Palpitation 3 on February 2014) It was released in the United States on November 15, 2014 as part of the eighth generation of video games consoles.