3 do
TRANSCRIPT
3DO
Power Play: 3DO in 32-bit Video Games
By: Christina Connolly
competitive analysis
1994 Nintendo Sega 3DOMarket Share 45% 45% 7%Retail Price $250 $400 $700 Net Sales $4.7B $4B $21M
Special Offerings Super FX ChipVirtual Reality Theme Parks
First CD-ROM system
0.03000.0700
0.4500
0.4500NintendoSega3DOOthers
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Nintendo Sega 3DO
Net Sales
0
100
200
300
400
500
600
700
800
Nintendo Sega 3DO
Retail Price
competitive layout
• 1994 video game industry
product lifecycle
• CD Rom systems
impact of profitability
Competitive Intensity
Bargaining power of Suppliers
Bargaining power of Customers
Threat of New Entrants
Threat from Substitutes
Gaming Industry
High Low
Profit
Threat/Power
perceptual mapPopularity
(market share)
Retail Price
High
Low
HighLow
value chain
3DO
Console Manufacturers
Game Developers
Distribution
Retail
Gamer
the situation
3DO is a laggard entrant into the video game industry. While they are attempting to be first to market with premiere technology, their competitors are using the same technology as an upgrade, undercutting 3DO in cost and capitalizing on their popularity
product and dilemmas
Launching an expensive product in a capitalized market while larger players are offering comparable upgrades at a fraction of the cost
Disjointed production system Single port console
5 button controller
consumer and dilemmas
Young demographic with minimal disposable income
Loyalty to larger market players
Demand Side Increasing Returns Popularity of a console hold great value within each
social network
technology and dilemmas
Introducer of CD-ROM consoles First time video consoles can be used for more than just games
Pictures Videos
Licensing of manufacturing and game development Required no accountability of quality
Laggard to market, leading to decreased efficiency and high retail cost
Lack of accountability led to sub-par game publishing
Inferior graphics Generic Soundtracks
partnering and dilemmas
Retail
Panasonic
Manufacturing
Matsushita AT&T Sanyo Toshiba GoldStar Samsung
300 Software Developers
Widespread licensing led to a competition among the partners and a lack of accountability for quality of the product
business model “that is missing one part”
Trip Hawkins’ initial goal: Console Concept
Required Technology (Dave Needle)
Game Development (independent developers)
Hawkins: “my goal is to be out to market first”
Gamer
business model issues
Console Concept
Required Technology (Dave Needle)
Game Development (independent developers)
Hawkins: “my goal is to be out to market first”
Gamer
• no contract of mutual expectations• no quality requirements• no time pressure
• The gamer is paying premium costs for minimal consideration
• entering an already competitive market• requires the consumer to be the test market• limits market research• increases likelihood of error• may decrease quality of product
• missing a piece, and no formal agreements to fill it
suggestions
Adapt to market trends Multi-player console 6 button controller
Maintain control over product Licensing standards
Focus on efficiency (as opposed to speed) A product is only useful if consumers will use it Decreased retail price
Marketing Capitalize on consumer identity to produce brand loyalty
Sources
"Essays.cc - Nintendo." Free Essays, Cliff Notes & Term Paper Database. 21 Mar. 2009 <http://www.essays.cc/free_essays/b2/iev101.shtml>.
"Game Genre Lifecycle: Part I." Lost Garden. 21 Mar. 2009 <http://lostgarden.com/2005/05/game-genre-lifecycle-part-i.html>.
"Power Play (C): 3DO in 32-bit Video Games." Harvard Business School (1995): 1-9.
"The Video Game Critic's 3DO Console Review Page." Video Game Reviews by the Video Game Critic. 21 Mar. 2009 <http://www.videogamecritic.net/3doinfo.htm>.