INTRODUCTION

Video game console

A video game console is an interactive entertainment computer or electronic

device that manipulates the video display signal of a display device (a television,

monitor, etc.) to display a game. The term video game console is used to

distinguish a machine designed for consumers to buy and use solely for playing

video games from a personal computer, which has many other functions, or

arcade games, which are designed for businesses that buy and then charge

others to play.

The "video" in "video game console" traditionally refers to a raster display device.[1] However, with the popular use of the term "video game" the term now implies

all display types and formats. The term "console" is used in the user manuals of

several early video game systems. Its use, however, is not synonymous with

"video game system" or the same as its modern usage. It refers to a specific part

of the video game system. The Atari 2600, NES, and other consoles from those

decades were called "video game systems" at the time.

The first company to use the term "console" to officially refer to its video game

system was Fairchild with the Video Entertainment System (VES) in 1976.

Elements of a Video Game Console

Controllers: Video controllers allow the user to input information and interact

with onscreen objects.

Power supply: a power supply converts 100-240 volt AC utility power into direct

current (DC) at the voltages needed by the electronics.

Console/Core Unit: The core unit in a video game console is the hub where the

television, video game controllers, and game program connect. It usually

contains a CPU, RAM, and an audiovisual coprocessor.

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Game Media: Most video game consoles have their programs stored on external

media.

The video game industry (formally referred to as interactive

entertainment) is the economic sector involved with the development, marketing

and sale of video and computer games. It encompasses dozens of job disciplines

and employs thousands of people worldwide.

Overview

Once a niche market and considered by some as a curiosity in the mid-1970s,

the computer and video game industry took in about USD$7.1 billion in the US in

2005 (ESA annual report). However, contrary to popular belief, the video game

industry is not "bigger than Hollywood"; while video game sales have exceeded

the film industry's annual box office[1], Hollywood generated $31 billion in total

1999 revenue.[2]

The modern computing world owes many modern computing innovations to the

game industry. The following computing elements owe their lineage and

development to the game industry:

Sound cards: developed for addition of digital-quality sound to games.

Later improved for music and audiophiles.

Graphics cards and 3D graphic accelerators: were developed for graphical

user interfaces (GUIs) and games. GUIs drove the need for high

resolution, games drove 3D acceleration. They also gave one the

opportunity to use SLI or CrossFire graphics cards, or two graphics cards

in one computer.

CD ROM drives: were developed for mass distribution of media in general,

however games use is probably instrumental in driving their ever higher

speeds.

Joysticks were developed mainly for playing games.

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Unix: developed, in part, so that the programmers could play a space

traveling game.[3][4]

In addition, many of the higher powered personal computers are purchased by

gamers who want the fastest equipment to power the latest cutting-edge games.

Modern games are among the most demanding of applications on PC resources,

so the latest hardware is often targeted at this sector likely to purchase and make

use of the latest features. Thus, the inertia of CPU development is due in part to

this industry whose applications demand faster processors than traditional

applications.

Disciplines

The game industry employs those experienced in other traditional businesses,

but some have experience tailored to the game industry. For example, many

recruiters target just game industry professionals. Some of the disciplines

specific to the game industry include:

Game programmer

Game designer

Level designer

Game producer

Game artist

Game tester

Most of these professionals are employed by video game developers or video

game publishers. However, many hobbyists also produce computer games and

sell them commercially.

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History

William Higinbotham, a scientist, created "Tennis For Two" in 1958. It was never

commercially released because it wasn't an actual video game. It was meant to

be an electrical experiment.

By the late 1970s, the computer game industry formed from a hobby culture,

when personal computers just began to become widely available. The industry

grew along with the advancement of computing technology, and often drove that

advancement. Today, the video game industry is a juggernaut of development;

profit still drives technological advancement which is then used by other industry

sectors. Though maturing, the video game industry is still very volatile, with third-

party video game developers quickly cropping up and, just as quickly, going out

of business.

In Asian countries, notably Japan and Hong Kong, the video game medium did

not reach major popularity on a mass scale until the arrival of the manga series

Game Center Arashi in the late 70s.[citation needed] The series helped the public

understand the possibility of the product and the entertainment value at the

cultural level.

Economics

The video game industry is currently facing financial strains[citation needed] as it

attempts to fairly compensate its talent, while continuing to turn a profit. The

result is that the game developer—the traditional source of new games—is

essentially dying out or is being incorporated into large publishers.[citation needed] The

game industry is currently experiencing a phase of consolidation and vertical

integration as a reaction to spiraling costs.[citation needed]This climate has also given

birth to vibrant indie game developers comprising tiny companies trying to use

the internet rather than traditional retail channels to reach an audience.

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Early on, development costs were minimal, and video games could be quite

profitable. Games developed by a single programmer, or by a small team of

programmers and artists, could sell hundreds of thousands of copies each. Many

of these games only took a few months to create, so developers could release

several titles each year. Thus, publishers could often be generous with benefits,

such as royalties on the games sold. Many early game publishers started from

this economic climate, such as Origin Systems, Sierra Entertainment, Activision

and Electronic Arts.

As computing and graphics power increased, so too did the size of development

teams, as larger staffs were needed to address the ever increasing graphical and

programming complexities. Now budgets can easily reach millions of dollars,

even if middleware and pre-built game engines are used. Most professional

games require one to three years to develop, further increasing the strain on

budgets.

Some developers are turning to alternative production and distribution methods,

such as online distribution, to reduce costs.

Practices

Video game industry practices are similar to those of other entertainment

industries (e.g. the music recording industry), but the video game industry in

particular has been accused of treating its development talent poorly. This

promotes independent development, as developers leave to form new

companies and projects. In some notable cases, these new companies grow

large and impersonal, having adopted the business practices of their forebearers,

and ultimately perpetuate the cycle.

However, unlike the music industry, where modern technology has allowed a fully

professional product to be created extremely inexpensively by an independent

musician, modern games require increasing amounts of manpower and

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equipment. This dynamic makes publishers, who fund the developers, much

more important than in the music industry.

Breakaways

A particularly famous case is the "original" independent developer Activision,

founded by former Atari developers. Activision grew to become the world's

second largest game publisher.[citation needed] In the mean time, many of the original

developers left to work on other projects. For example, founder Alan Miller left

Activision to start another video game development company, Accolade (now

Atari née Infogrames).

Activision was popular among developers for giving them credit in the packaging

and title screens for their games, while Atari disallowed this practice. As the

video game industry took off in the mid-80s, many developers faced the more

distressing problem of working with fly-by-night or unscrupulous publishers that

would either fold unexpectedly or run off with the game profits.

Economics

Economic problems remain today with regard to publisher-developer contracts

(see copyright: transfer of rights). Typically, developers receive around 20% of

royalties, and the rest goes to the publisher.[citation needed] Rather than dividing

royalties, many publishers buy the development studio outright. Some

developers begrudge the tendency for the studio's original management to leave

in the wake of a buyout, while the remaining employees try to finish the project

only to be shut down after a few years. These buyouts often result in a big push

to finish video game projects in time for the holiday purchasing season, and

transfer of creative control to the publisher.

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Creative control

Some people disapprove of publishers having creative control since they are

more apt to follow short-term market trends rather than invest in risky but

potentially lucrative ideas. On the other hand, publishers may know better than

developers what consumers want. The relationship between video game

developers and publishers parallels the relationship between recording artists

and record labels in many ways. But unlike the music industry, which has seen

flat or declining sales in the early 2000s, the video game industry continues to

grow while producing both low-quality, unoriginal games, and innovative and

popular titles such as the Grand Theft Auto series and The Sims series. Also,

personal computers have made the independent development of music almost

effortless, while the gap between an independent game developer and the

product of a fully financed one grows larger.

In the computer games industry, it is easier to create a startup, resulting in many

successful companies. The console games industry is a more closed one, and a

game developer must have up to three licenses from the console manufacturer:

1. A license to develop games for the console

2. The publisher must have a license to publish games for the console

3. A separate license for each game

In addition, the developer must usually buy development systems from the

console manufacturer in order to even develop a game for consideration, as well

as obtain concept approval for the game from the console developer. Therefore,

the developer normally has to have a publishing deal in place before starting

development on a game project, but in order to secure a publishing deal, the

developer must have a track record of console development, something which

few startups will have.

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Alternatives

An alternative method for publishing video games is to self-publish using the

shareware or open source model over the Internet. However, it remains to be

seen whether freely made and distributed games can survive in the era of multi-

million dollar productions.

Japanese video game industry practices

The Japanese video game industry is markedly different from the industry in the

US and Europe.

Generally, games occupy greater cultural attention in Japan than the U.S., and

its market share of total entertainment in Japan is higher than the U.S. Voice

acting was implemented in Japanese games several years before American

games.[citation needed] Japan has created some of the largest and most expensive

titles ever made, such as Final Fantasy and the Metal Gear Solid series of

games.

Arcades

Video game arcades are still relatively popular in Japan; for every arcade game

released in the US, nine are released in Japan.[citation needed] The history of the

Japanese arcade is very significant in the story of the decline of the American

arcade, and in the shape of game design in general. In particular, the arcade

scene in Japan has caused them to lag behind in the field of sound effects and

sound design, because this is less important in an arcade. For example, a

modern game like Tekken 4 still uses 16 kHz samples like the original arcade

release.

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Media

Consoles and arcade games are the main media for Japanese game design; PC

games are nowhere near as popular. This necessarily dictates that there are

fewer independently developed games coming from Japan, as it is far harder to

develop independently for a console than it is for a PC.

Development environment

The structure and culture of a Japanese game developer is far different from a

western one. Throughout the history of Japanese game design, many developers

have seen fit to remain mostly anonymous, even using pseudonyms to a large

degree in video game credits.

Also, the division in labor for video game development is far different. For

example, Japanese game design teams had a dedicated designer, (which they

called a "director") far earlier than American design teams adopted the practice.

Yet it was clear that even with this centralized design process level designers

and character designers were given a lot of leeway to work within their

boundaries as much as possible. For example, almost every level in Super Mario

Bros. 3 has new gameplay concepts within it.

Secondly Japanese game designers throughout history generally had far more

people working on a particular game then a comparable western design team.

For example, Mortal Kombat, an American title, was developed by four people: a

programmer, an artist, a musician, and a background artist. Street Fighter 2, a

comparable Japanese title, had almost one artist working on every character in

the game, plus two programmers, plus a musician with the result being a team of

twenty or more people.

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History of video game consoles (first generation)

Interactive television

Television engineer Ralph Baer conceived the idea of an interactive television

while building a television set from scratch for Loral in 1951 in the Bronx, New

York. He explored these ideas further in 1966 when he was the Chief Engineer

and manager of the Equipment Design Division at Sanders Associates. Baer

created a simple two-player video game that could be displayed on a standard

television set called Chase, where two dots chased each other around the

screen. After a demonstration to the company's director of R&D Herbert

Campman, some funding was allotted and the project was made "official". In

1967 Bill Harrison was brought on board, and a light gun was constructed from a

toy rifle that was aimed at a target moved by another player.

A simulation of Tennis for the Magnavox Odyssey, without overlay

Bill Rusch joined the project to speed up development and soon a third machine-

controlled dot was used to create a ping-pong game. With more funding

additional games were created, and Baer had the idea of selling the product to

Cable TV companies, who could transmit static images as game backgrounds. A

prototype was demonstrated in February 1968 to Teleprompter Vice President

Hubert Schlafly, who signed an agreement with Sanders. The Cable TV industry

was in a slump during the late 60's and early 70's and a lack of funding meant

other avenues had to be pursued. Development continued on the hardware and

games resulting in the final "Brown Box" prototype, which had two controllers, a

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light gun and sixteen switches on the console that selected the game to be

played. Baer approached various U.S. Television manufacturers and an

agreement was eventually signed with Magnavox in late 1969. Magnavox's main

alterations to the Brown Box were to use plug-in circuits to change the games,

and to remove the colour graphics capabilities in favour of color overlays in order

to reduce manufacturing costs. It was released in May 1972 as the Magnavox

Odyssey.

History of video game consoles (second generation)

Early 8-bit home consoles (1976-1983)

The earliest console, the Magnavox Odyssey, had used removeable cartridges

that were nothing but glorified jumpers to activate the games already wired in to

the console. This method was soon replaced during the move to PONG

consoles, where the logic for one or more games was hardcoded into microchips

using discrete logic, and no additional games could ever be added. By the mid-

1970's cartridges had returned with the move to CPU based consoles. With

games now consisting of microprocessor based code, these games were burned

onto ROM chips that were mounted inside plastic cartridge casings that could be

plugged into slots on the console. When the cartridges were plugged in, the

general-purpose microprocessors in the consoles read the cartridge memory and

ran whatever program was stored there. Rather than being confined to a small

selection of games included in the box, consumers could now amass libraries of

game cartridges.

The Fairchild VES was the world's first CPU based video game console,

introducing the cartridge based game code storage format. It was released by

Fairchild Semiconductor in August 1976. When Atari released their VCS the next

year, Fairchild quickly re-named it to the Fairchild Channel F.

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In 1977, Atari released its CPU based console called the Video Computer

System (VCS), later called Atari 2600. Nine games were designed and released

for the holiday season. It would quickly become by far the most popular of all the

early consoles.

In 1978 Magnavox released its CPU based console, the Odyssey 2, in the United

States and Canada. Philips Electronics released this same game console as the

Philips G7000 in many European countries. Although it never became as popular

as Atari, it managed to sell several million units through 1983.

In 1979, Activision was created by disgruntled former Atari programmers. It was

the first third-party developer of video games. Many new developers would follow

their lead in succeeding years.

The next major entry was Intellivision, introduced by Mattel in 1980. Though

chronologically coming long before the "16-bit era", the Intellivision had a unique

processor with instructions that were 10 bits wide (allowing more instruction

variety and potential speed), and registers 16 bits wide. The system rocketed to

popularity alongside the 2600.

Though not the first system to challenge Atari, it was the first to pose a serious

threat to Atari's dominance. A series of Intellivision TV ads featuring George

Plimpton mercilessly attacked the Atari VCS's lesser capabilities with side-by-

side game comparisons. Nevertheless, Atari held exclusive rights to most of the

popular arcade game conversions of the day, and used this key segment to

support their older hardware in the market. This game advantage and the

difference in price between the machines meant that each year Atari sold more

units than Intellivision, lengthening its lead despite inferior graphics. This need for

price parity has influenced every console war since.

Unique among home systems of the time was the Vectrex, the only one to

feature vector graphics and its own self contained display.

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1982 saw the introduction of the Colecovision, an even more powerful machine.

Its sales also took off, but the presence of three major consoles in the

marketplace and a glut of poor quality games began to overcrowd retail shelves

and erode consumers' interest in video games. Within a year this overcrowded

market would crash.

Video game crash of 1983

The video game crash of 1983 was the year long crash of the video game

industry and the bankruptcy of a number of companies producing home

computers and video game consoles in North America in late 1983 and early

1984. It brought an end to what is considered the second era of console video

gaming.

The crash was followed by a gap of two years, during which there was no

significant development for video game consoles. That gap ended with the

success of the Nintendo Entertainment System (NES) that was first introduced in

Japan in 1983 (as Famicom) and then in the United States in 1985 and would

break out in popularity in 1987.

This period is sometimes referred to as the video game crash of 1984, because

that was the year the full effects of the crash became obvious to consumers.

Hundreds of games were in development for 1983 release, most of which ended

up in bargain bins. But few games were developed in 1983 for release the

following year, resulting in a drought of new video games in 1984.

Preface & cause

The worldwide video game console crash of 1983 was caused by a combination

of factors, though with different factors in several markets:

In Europe, the boom years of personal computing (1981–1985) were

trumpeted by very aggressive marketing of inexpensive home computers,

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especially the Commodore 64, with the theme “Why buy your child a video

game and distract them from school when you can buy them a home

computer that will prepare them for college?”[1] Marketing research for both

sides tracked the change as millions of consumers shifted their intention to

buy choices from game consoles to low-end computers that retailed for

similar prices. At the same time, a strong culture of playing and writing

video games for these personal computers arose in Europe, making the

European crash more of a platform shift than a total collapse of the

industry.

A similar marketing campaign occurred in the U.S. without the same

effect, where instead the personal computer industry grew because of the

crash and is not seen as directly causing it.

A flood of consoles on the market giving consumers too many choices. At

the time of the U.S. crash, there was a plethora of consoles on the market:

Atari 2600, Atari 5200, Bally Astrocade, Colecovision, Coleco Gemini,

Emerson Arcadia 2001, Fairchild Channel F System II, Magnavox

Odyssey2, Mattel Intellivision (and its just released update with slew of

peripherals, Intellivision II), Sears Tele-Games systems (which included

2600 and Intellivision clones), Tandyvision, and Vectrex. Each one of

these had their own library of games, and many had (in some cases large)

3rd party libraries. Likewise, many of these same companies announced

yet another generation of consoles for 1984, such as the Odyssey3, and

Atari 7800.

A flood of poor titles from hastily financed startups, combined with weak

high-profile Atari 2600 games based on the hit movie E.T. and the red-hot

arcade game Pac-Man.

The news media sensationalized both the boom days of 1980 and the

problems of 1982–83. In particular, the story of Atari burying thousands of

E.T. cartridges in a New Mexico landfill shifted the outlook of the video

game market in the eyes of many media outlets.

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History of video game consoles (third generation)

In the history of video games, the 8-bit era was the third generation of video

game consoles, but the first after the video game crash of 1983 and considered

by some to be the first "modern" era of console gaming. It began in 1983 with the

release of the Famicom in Japan and lasted until 1987. Although the previous

generation of consoles had also used 8-bit processors, it was in this time that

home game systems were first labeled by their "bits". This came into fashion as

16-bit systems like the Mega Drive/Genesis were marketed to differentiate

between the generations of consoles. This generation in gaming was primarily

dominated by the Nintendo Entertainment System/Famicom.

Overview

During the era, the Famicom (short for family computer) became very popular in

Japan. The Famicom's American counterpart, the Nintendo Entertainment

System, highly dominated the gaming market in North America, thanks in part to

its restrictive licensing agreements with developers. Though the NES dominated

the market, the Sega Master System (which was popular in Brazil and Europe),

and the Atari 7800, were also major players during this era. The Sharp X68000

began its niche run in Japan with its first iteration in 1987.

The latter part of the third generation (argued by some as part of the 4th

generation) introduced the Game Boy, which single-handedly gelled and

proceeded to dominate the previously scattered handheld market for 15 years.

While the Game Boy product line has been incrementally updated every few

years, until the Game Boy Micro and Nintendo DS, and partially the Game Boy

Color, all Game Boy products were backwards compatible with the original

released in 1989.

The post-crash 8-bit era saw the first console role-playing video games, and was

the birth of the side-scroller. Editing and censorship of video games was often

used in localizing Japanese games to North America. It is the era when many

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famous video game series, and the characters starring in them, originated. Some

notable examples include Super Mario Bros., The Legend of Zelda, Dragon

Quest, Metroid, Mega Man, Metal Gear, Castlevania, Final Fantasy, Phantasy

Star, and Bomberman.

This generation is often mislabeled as the "First Generation" as it is the start of

video gaming as it is today (although the grouping of generations is arbitrary).

History of video game consoles (fourth generation)

In the history of video games, the 16-bit era was the fourth generation of video

game consoles. Starting in 1987 with the Japanese launch of the PC Engine, this

era was dominated by commercial rivalry between Nintendo and Sega with their

machines, the Super Nintendo Entertainment System and the Sega Mega Drive

— the latter known as the Sega Genesis in North America. The machines

introduced in this generation retained the majority market share until 1996.

The PC Engine, a collaboration between Hudson Soft and NEC, was launched in

Japan on October 30, 1987 and was followed by the Sega Mega Drive on

October 29, 1988. Both machines were launched in North America during August

1989 and the Mega Drive was launched in Europe on 30 November 1990.

As the market quickly transitioned to the newer hardware, Nintendo saw erosion

of the commanding market share they'd built up with the Nintendo Entertainment

System and responded with their own fourth generation machine, the Super

Nintendo Entertainment System on 21 November 1990. The machine reached

North America in August 1991 and Europe in April 1992.

Although initially popular in Japan, the PC Engine failed to maintain its initial

sales momentum or to make a strong impact in North America, where it became

unavailable by 1994. As a result the market was largely divided between Sega

and Nintendo, who acted as direct competitors.

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Worldwide sales standingsConsole Units Sold Date

Super Nintendo Entertainment System 49 millionFebruary 11, 2006

Sega Mega Drive/Sega Genesis 29 millionDecember 1, 2006

TurboGrafx-16 11 million N/A

History of video game consoles (fifth generation)

In the history of computer and video games, the 32-bit / 64-bit era was the fifth

generation of video game consoles. It featured both 32-bit and 64-bit consoles,

and the market was dominated by three consoles, the Sega Saturn (1994), the

Sony PlayStation (1994) and the Nintendo 64 (1996), with the PlayStation

eventually ending up the most successful and ending Nintendo's longstanding

domination over the market. This era began in 1996 and ended in 2002 .

Demographics in console sales varied overall, but these consoles defined the

System wars of this era (see section below). The 3DO and Atari Jaguar were

also part of this era, but their sales were poor and they failed to make a

significant impact on the market. This era also saw two updated versions of

Nintendo's Game Boy: Game Boy Color and Game Boy Light (Japan only).

Bit ratings for consoles largely fell by the wayside during this era, with the notable

exception of the Nintendo 64. The number of "bits" cited in console names

referred to the CPU word size and had been used by hardware marketers as a

"show of power"; however there was little to be gained from increasing the word

size much beyond 32 or 64 bits - performance depended on more varied factors,

such as processor clock speed, bandwidth, and memory size.

The 32-bit / 64-bit era also saw the rise of emulation. It was during this time that

not only were commonly available PCs powerful enough to emulate the 8 and

16bit systems of the previous 5 or more years, but the internet made it possible

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to store and download tape and rom images of older games, eventually leading

7th generation consoles (such as Xbox 360, Wii, PlayStation 3, and PlayStation

Portable) to make such older games available for purchase or download.

World wide sales figuresConsole Units Sold Date

PlayStation 102.49 million March 31, 2005Nintendo 64 32.93 million March 31, 2005Sega Saturn 9.26 million December, 20043DO 1.2 million N/AAtari Jaguar 250,000 N/A

History of video game consoles (sixth generation)

The sixth-generation era (sometimes referred to as the 128-bit era; see

"Number of bits" below) refers to the computer and video games, video game

consoles, and video game handhelds available at the turn of the 21st century.

Platforms of the sixth generation include Sega's Dreamcast, Sony's PlayStation

2, Nintendo GameCube, and Microsoft's Xbox. This era began on November 27,

1998 with the release of the Dreamcast, and it was joined by the PlayStation 2 in

March 2000. The Dreamcast was discontinued in March 2001 and that same

year saw the launch of the Nintendo GameCube in September and Xbox in

November.

Sony's PlayStation 2 achieved sales dominance, with nearly twice the sales of all

its competitors with over 100 million shipped, making the Playstation 2 the best

selling console in history. Microsoft's Xbox came in second with 24 million and

the Nintendo GameCube was third with 21 million. The Dreamcast, which arrived

prior to all of the others and was discontinued prematurely (1998-2001), came in

fourth with 10.6 million, representing 6.5% of the sixth generation sales.

The release of the Nintendo DS on November 21, 2004 is often considered the

start of the seventh generation. The sixth generation started to come to a close

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when the Xbox was succeeded by the Xbox 360 in late 2005. The GameCube

was discontinued when the Wii was released in late 2006. However, PlayStation

2 sales have continued to be strong as of Christmas 2006, due to the systems

popularity and high demand, as well as the high price point and critical reception

of the next generation PlayStation 3. Games are still being produced for the

PlayStation 2, Xbox, and Nintendo GameCube as of 2006, while Dreamcast

games was officially discontinued in 2001, there are still few games being

released even in 2007.

Worldwide sales standingsConsole Units Sold Date

PlayStation 2 115.36 million shipped December 31, 2006Xbox 24 million May 10, 2006Nintendo GameCube 21.20 million September 30, 2006Dreamcast 10.6 million August 7, 2006

History of video game consoles (seventh generation)

Seventh Generation

The seventh generation is the era in the history of computer and video games

that began on November 22, 2005 with the release of Microsoft's Xbox 360, and

continued a year later with the release of Nintendo's Wii on November 19, 2006

in North America and South America. Sony's PlayStation 3 was released on

November 11, 2006, in Japan and on November 17, 2006, in the United States,

Canada, Hong Kong and Taiwan, and will likely be the final entry into the seventh

generation of consoles. It is the smallest of all console wars with only 3 consoles.

Having only just formally begun, it is not yet possible to determine which, if any,

of the three major consoles will dominate this generation. The Xbox 360 by

Microsoft has gained an early lead in terms of market share, due in large part to

its launch which came a year before its rivals. Sales figures in North America and

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Europe have continued to be strong, despite the launch of the PlayStation 3 and

Wii. Like its predecessor, the Xbox 360 has struggled in Japan due to a lack of

RPGs and the poor reception of some Japanese developed games, such as

Ninety-Nine Nights and Every Party. However, the system's form factor has been

more generally appreciated and sales have increased in the region recently, due

to the release of the highly anticipated Blue Dragon.

It is more difficult to assess whether Sony's PlayStation franchise will be

successful in this generation. It has a comparatively higher price, the PlayStation

3 has been released roughly a year later than its direct competitor, the Xbox 360,

and reliance on very new technology such as the Cell microprocessor and Blu-

ray format have caused difficulties in manufacturing and, some envisage, in

value-engineering the console to make it cheaper in the future. Nonetheless,

despite many initial setbacks and delays, Sony demonstrated the capabilities of

the PlayStation 3 at Tokyo Game Show 2006, with 27 playable demos and

numerous titles ready for launch. It will ultimately be decided by whether or not

players feel that the games are worth the higher price of the console.

Nintendo entered this generation with a new business plan with its Wii console.

The plan is firstly to capture a new market of 'non-gamers' (and lapsed gamers)

through new game play experiences and new forms of interaction with games. If

the new market grows sufficiently large, Nintendo hopes that the new control

aspect will render current conventionally controlled consoles obsolete, leading to

Nintendo capturing a large portion of the existing market as well.

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RESEARCH DESIGN

STATEMENT OF THE PROBLEM: Sony has launched the ‘PlayStation 3’

(PS3), in India, in the month of April in direct competition with Microsoft’s ‘Xbox

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360’. Will Microsoft be able to retain its market leadership or will Sony overtake

Microsoft to become the market leader in Bangalore.

OBJECTIVES:

To gauge the customers perception of the two competing products

To analyze the market strategies adopted by the two companies

To analyze if the launch of Sony’s PlayStation 3 will affect the sales of

Microsoft’s Xbox 360

RESEARCH METHODOLOGY:

Hypothesis:

Ho – The launch of Sony PS3 will not affect the sales of Xbox360

Hi – The launch of Sony PS3 will affect the sales of Xbox360

Population:

all those who have played on game consoles, in Bangalore

all the Microsoft Xbox 360 dealers in Bangalore

all the Sony exclusive dealers in Bangalore

Sample:

Random sample of 30 individuals who have played on game consoles, in

Bangalore.

Random sample of 20 Microsoft Xbox 360 dealers

Sample of 10 Sony exclusive dealers

23

SCOPE OF THE STUDY:

To understand the customers perception of these products and hence

understand the scope for these products in Bangalore.

Could be of help to the competing companies, to see customers’

feedback and understand what they are doing right and what they are

doing wrong. The companies who would like to enter the market could

use this project to better understand the market potential and plan their

entry.

LIMITATIONS OF THE STUDY:

Time constraints for the project – only one month

Complete accuracy not possible due to errors in feedback

Feedbacks might not be entirely truthful

24

PROFILES

25

Microsoft Corporation is an American multinational computer

technology corporation with global annual revenue of US$44.28 billion and

76,000 employees in 102 countries. It develops, manufactures, licenses, and

supports a wide range of software products for computing devices.[5][4][2]

Headquartered in Redmond, Washington, USA, its best selling products are the

Microsoft Windows operating system and the Microsoft Office suite of productivity

software. The company's name is sometimes abbreviated as MS or MSFT.

These products have all achieved near-ubiquity in the desktop computer market.

One commentator notes that Microsoft's original mission was "a computer on

every desk and in every home, running Microsoft software"—it is a goal near

fulfillment.[6] Microsoft possesses footholds in other markets, with assets such as

the MSNBC cable television network, the MSN Internet portal, and the Microsoft

Encarta multimedia encyclopedia. The company also markets both computer

hardware products such as the Microsoft mouse as well as home entertainment

products such as the Xbox, Xbox 360, Zune and MSN TV.[5]

Originally founded to develop and sell BASIC interpreters for the Altair 8800,

Microsoft rose to dominate the home computer operating system market with

MS-DOS in the mid-1980s. The company released an initial public offering (IPO)

in the stock market, which, due to the ensuing rise of the stock price, has made

four billionaires and an estimated 12,000 millionaires from Microsoft employees.[7]

[8][9] Throughout its history the company has been the target of criticism, including

monopolistic business practices—the U.S. Justice Department, among others,

has sued Microsoft for antitrust violations and software bundling.[10] Known for

what is generally described as a developer-centric business culture, Microsoft

has historically given customer support over Usenet newsgroups and the World

Wide Web, and awards Microsoft MVP status to volunteers who are deemed

helpful in assisting the company's customers.

26

Product divisions

To be more precise in tracking performance of each unit and delegating

responsibility, Microsoft reorganized into seven core business groups—each an

independent financial entity—in April 2002. Later, on September 20, 2005,

Microsoft announced a rationalization of its original seven business groups into

the three core divisions that exist today: the Windows Client, MSN and Server

and Tool groups were merged into the Microsoft Platform Products & Services

Division; the Information Worker and Microsoft Business Solutions groups were

merged into the Microsoft Business Division; and the Mobile and Embedded

Devices and Home and Entertainment groups were merged into the Microsoft

Entertainment and Devices Division.[33][34]

Platform Products and Services

This division produces Microsoft's flagship product, the Windows operating

system. It has been produced in many versions, including Windows 3.1,

Windows 95, Windows 98, Windows 2000, Windows 2000 server, Windows Me,

Windows Server 2003, Windows XP, and Windows Vista. Almost all IBM

compatible personal computers designed for the consumer come with Windows

preinstalled. The current desktop version of Windows is Windows Vista. The

online service MSN, the cable television station MSNBC, and the Microsoft online

magazine Slate are all part of this division. Slate was later acquired by The

Washington Post on December 21, 2004. At the end of 1997, Microsoft acquired

Hotmail, the most popular webmail service, which it rebranded as "MSN

Hotmail". Later in 1999 Microsoft introduced MSN Messenger, an instant

messaging client, to compete with the popular AOL Instant Messenger. Along

with Windows Vista, MSN is to become Windows Live Messenger.[5]

Microsoft Visual Studio is the company's set of programming tools and compilers.

The software product is GUI-oriented and links easily with the Windows APIs, but

must be specially configured if used with non-Microsoft libraries. The current

27

version is Visual Studio 2005. The previous version, Visual Studio.Net 2003, was

named after the .NET initiative, a Microsoft marketing initiative covering a

number of technologies. Microsoft's definition of .NET continues to evolve. As of

2004, .NET aims to ease the development of Microsoft Windows-based

applications that use the Internet, by deploying a new Microsoft communications

system, Indigo (now renamed Windows Communication Foundation). This is

intended to address some issues previously introduced by Microsoft's DLL

design, which made it difficult, even impossible in some situations, to manage,

install multiple versions of complex software packages on the same system (see

DLL-hell), and provide a more consistent development platform for all Windows

applications (see Common Language Infrastructure). In addition, the Company

established a set of certification programs to recognize individuals who have

expertise in its software and solutions. Similar to offerings from Cisco, Sun

Microsystems, Novell, IBM, and Oracle Corporation, these tests are designed to

identify a minimal set of proficiencies in a specific role; this includes developers

("Microsoft Certified Solution Developer"), system/network analysts ("Microsoft

Certified Systems Engineer"), trainers ("Microsoft Certified Trainers") and

administrators ("Microsoft Certified Systems Administrator" and "Microsoft

Certified Database Administrator").[5]

Microsoft offers a suite of server software, entitled Windows Server System.

Windows Server 2003, an operating system for network servers, is the core of

the Windows Server System line. Another server product, Systems Management

Server, is a collection of tools providing remote-control abilities, patch

management, software distribution, and a hardware/software inventory. Other

server products include:

SQL Server, a relational database management system;

Exchange Server, for certain business-oriented e-mail features;

Small Business Server, for messaging and other small business-oriented

features; and

BizTalk Server, for employee integration assistance and other functions.[5]

28

As of November 2006 Microsoft has extended itself to Linux and open source

companies to allow Windows server to work harmoniously with servers running

Linux.

Business

The Microsoft Business Division produces Microsoft Office, which is the

company's line of office software. The software product includes Word (a word

processor), Access (a personal relational database application), Excel (a

spreadsheet program), Outlook (Windows-only groupware, frequently used with

Exchange Server), PowerPoint (presentation software), and Publisher (desktop

publishing software). A number of other products were added later with the

release of Office 2003 including Visio, Project, MapPoint, InfoPath and OneNote.[5]

The division focuses on developing financial and business management software

for companies. These products include products formerly produced by the

Business Solutions Group, which was created in April 2001 with the acquisition of

Great Plains. Subsequently, Navision was acquired to provide a similar entry into

the European market, resulting in the planned release of Microsoft Dynamics

NAV in 2006. The group markets Axapta and Solomon, catering to similar

markets, which is scheduled to be combined with the Navision and Great Plains

lines into a common platform called Microsoft Dynamics.[5]

Entertainment and Devices

Microsoft has attempted to expand the Windows brand into many other markets,

with products such as Windows CE for PDAs and its "Windows-powered"

Smartphone products. Microsoft initially entered the mobile market through

Windows CE for handheld devices, which today has developed into Windows

Mobile 5. The focus of the operating system is on devices where the OS may not

directly be visible to the end user, in particular, appliances and cars. The

company produces MSN TV, formerly WebTV, a television-based Internet

29

appliance. Microsoft used to sell a set-top Digital Video Recorder (DVR) called

the UltimateTV, which allowed users to record up to 35 hours of television

programming from a direct-to-home satellite television provider DirecTV. This

was the main competition in the UK for British Sky Broadcasting's (BSkyB) SKY

+ service, owned by Rupert Murdoch. UltimateTV has since been discontinued,

with DirecTV instead opting to market DVRs from TiVo Inc. before later switching

to their own DVR brand.[5]

Microsoft sells computer games that run on Windows PCs, including titles such

as Age of Empires, Halo and the Microsoft Flight Simulator series. It produces a

line of reference works that include encyclopedias and atlases, under the name

Encarta. Microsoft Zone hosts free premium and retail games where players can

compete against each other and in tournaments. Microsoft entered the multi-

billion-dollar game console market dominated by Sony and Nintendo in late 2001,[35] with the release of the Xbox. The company develops and publishes its own

video games for this console, with the help of its Microsoft Game Studios

subsidiary, in addition to third-party Xbox video game publishers such as

Electronic Arts and Activision, who pay a license fee to publish games for the

system. The Xbox also has a successor in the Xbox 360, released on 2005-11-

22 in North America and other countries.[36][37] With the Xbox 360, Microsoft hopes

to compensate for the losses incurred with the original Xbox. However, Microsoft

made some decisions considered controversial in the video gaming community,

such as selling two different versions of the system, as well as providing

backward compatibility with only particular Xbox titles.[38][39] In addition to the Xbox

line of products, Microsoft also markets a number of other computing-related

hardware products as well, including mice, keyboards, joysticks, and gamepads,

along with other game controllers, the production of which is outsourced in most

cases.

30

Sony Corporation is a Japanese multinational corporation and one of

the world's largest media conglomerates with revenue of $68.39 billion (as of

2006) based in Minato, Tokyo.[1] Sony is one of the leading manufacturers of

electronics, video, communications, video games, and information technology

products for the consumer and professional markets.

Sony Corporation is an operating-holding company. It is the electronics business

unit and the parent company of the Sony Group, which is engaged in business

through its 5 operating segments — electronics, games, entertainment (motion

pictures and music), financial services and other. These make Sony one of the

most comprehensive entertainment companies in the world. Sony's principal

business operations include Sony Corporation (Sony Electronics in the U.S.),

Sony Pictures Entertainment, Sony Computer Entertainment, Sony BMG Music

Entertainment and Sony Financial Holdings. As a semiconductor maker, Sony is

among the Worldwide Top 20 Semiconductor Sales Leaders. Its slogan is Sony.

Like no other.

History

In 1945, after World War II, Masaru Ibuka started a radio repair shop in a

bombed-out building in Tokyo.[4] The next year he was joined by his colleague

Akio Morita, and they founded a company called Tokyo Tsushin Kogyo K.K.[5],

which translates in English to Tokyo Telecommunications Engineering

Corporation. The company built Japan's first tape recorder called the Type-G.[6]

In the early 1950s, Ibuka traveled in the United States and heard about Bell Labs'

invention of the transistor.[7] He convinced Bell to license the transistor

technology to his Japanese company. While most American companies were

researching the transistor for its military applications, Ibuka looked to apply it to

communications. While the American companies Regency and Texas

Instruments built transistor radios first, it was Ibuka's company that made the first

commercially successful transistor radios.

31

In August 1955, Sony produced its first coat-pocket sized transistor radio they

registered as the TR-55 model.[8] In 1956, Sony reportedly manufactured about

40,000 of its Model TR-72 box-like portable transistor radios and exported the

model to North America, the Netherlands and Germany.

That same year they made the TR-6, a coat pocket radio which was used by the

company to create its "SONY boy" advertising character.[9] The following year,

1957, Sony came out with the TR-63 model, then the smallest (112 × 71 × 32

mm) transistor radio in commercial production. It was a worldwide commercial

success.[10]

University of Arizona professor Michael Brian Schiffer, Ph.D., says, "Sony was

not first, but its transistor radio was the most successful. The TR-63 of 1957

cracked open the U.S. market and launched the new industry of consumer

microelectronics." By the mid 1950s, American teens had begun buying portable

transistor radios in huge numbers, helping to propel the fledgling industry from an

estimated 100,000 units in 1955 to 5,000,000 units by the end of 1958. However,

this huge growth in portable transistor radio sales that saw Sony rise to be the

dominant player in the consumer electronics field[11] was not because of the

consumers who had bought the earlier generation of tube radio consoles, but

was driven by a distinctly new American phenomenon at the time called Rock

and Roll.

Company name

When Kogyo was looking for a romanized name to use to market themselves,

they strongly considered using their initials, TTK. The primary reason they did

not, is that the railway company Tokyo Kyuko was known as TKK.[12]. The

company occasionally used the acronym "Totsuko" in Japan, but Morita

discovered that Americans had trouble pronouncing that name, during his visit to

the United States. Another early name that was tried out for a while was "Tokyo

32

Teletech" until Morita discovered that there was an American company already

using Teletech as a brand name.[13]

The name "Sony" was chosen for the brand as a mix of the Latin word sonus,

which is the root of sonic and sound, the English word "sunny", and from the

word Sonny-boys which is Japanese slang for "whiz kids". However "Sonny" was

thought to sound too much like the Japanese saying soh-nee which means

business goes bad.[14] Morita pushed for a word that does not exist in any

language so that they could claim the word "Sony" as their own (which paid off

when they sued a candy producer who also used the name who claimed that

"Sony" was just an existing word in some language).[12]

At the time of the change, it was extremely unusual for a Japanese company to

use Roman letters instead of kanji to spell its name. The move was not without

opposition: TTK's principal bank at the time, Mitsui, had strong feelings about the

name. They pushed for a name such as Sony Electronic Industries, or Sony

Teletech. Akio Morita was firm, however, as he did not want the company name

tied to any particular industry. Eventually, both Ibuka and Mitsui Bank's chairman

gave their approval.[15]

As a result of this persistence, Sony has now developed into a leading

international manufacturer producing a variety of products throughout the

electronics market, music and gaming industries, film, finance and many more

besides.

33

Notable Sony products, technologies and proprietary

formats

Sony has historically been notable for creating its own in-house standards for

new recording and storage technologies instead of adopting those of other

manufacturers and standards bodies. The most infamous of these was the

videotape format war of the early 1980s, when Sony marketed its Betamax

system for video cassette recorders against the VHS format developed by JVC.

In the end, VHS gained critical mass in the marketplace and became the

worldwide standard for consumer VCRs and Sony adopted the format. While

Betamax is for all practical purposes an obsolete format, a professional-oriented

component video format called Betacam that was derived from Betamax is still

commonly used today, especially in the film and television industry.

Early Sony products included reel-to-reel tape recorders and transistor radios.

In 1968 Sony introduced its Trinitron brand name for its line of aperture grille

cathode ray tube televisions and later computer monitors. Trinitron displays are

still produced.

Sony launched the Betamax videocassette recording format in 1975. The

Walkman brand was introduced in 1979.

1982 saw the launch of Sony's Betacam videotape family and the collaborative

Compact Disc format. In 1983 Sony introduced 90mm micro floppy diskettes

(better known as 3.5-inch floppy disks), which it had developed at a time when

there were 4" floppy disks and a lot of variations from different companies to

replace the then on-going 5.25" floppy disks. Sony had great success and the

format became dominant; 3.5" floppy disks gradually became obsolete as they

were replaced by more current media formats. In 1983 Sony launched the MSX a

computer for the home and introduced the world with their counterpart Philips the

Compact Disc or CD. In 1984 Sony launched the Discman series which extended

34

their Walkman brand to portable CD products. In 1985 Sony launched their

Handycam products and the Video8 format. Video8 became popular in the

consumer camcorder market. In 1987 Sony launched DAT or Digital Audio Tape

as a new audio tape standard alternative to CD.

In addition to developing consumer-based recording medias, after the launch of

the CD Sony began development of commercially based recording medias. In

1986 they launched Write-Once optical discs (WO) and in 1988 launched

Magneto-optical discs which were around 125MB size for the specific use of

archival data storage.[16]

In the early 1990s two high-density optical storage standards were being

developed: one was the MultiMedia Compact Disc (MMCD), backed by Philips

and Sony, and the other was the Super Density disc (SD), supported by Toshiba

and many others. Philips and Sony abandoned their MMCD format and agreed

upon Toshiba's SD format with only one modification based on MMCD

technology, viz EFMPlus. The unified disc format was called DVD which was

marketed in 1996.

Sony introduced the MiniDisc format in 1992 as an alternative to Philips DCC or

Digital Compact Cassette. Since the introduction of MiniDisc, Sony has

attempted to promote its own audio compression technologies under the ATRAC

brand, against more widely used formats like MP3. Until late 2004, Sony's

Network Walkman line of digital portable music players did not support the MP3

de facto standard natively, although the software SonicStage provided with them

would convert MP3 files into the ATRAC or ATRAC3 formats.

In 1993, Sony challenged the industry standard Dolby Digital 5.1 surround sound

format with its newer and more advanced proprietary motion picture digital audio

format called SDDS (Sony Dynamic Digital Sound). This format employed eight

channels (7.1) of audio opposed to just six used in Dolby Digital 5.1 at the time.

Unlike Dolby Digital, SDDS utilized a method of backup by having mirrored

35

arrays of bits on both sides of the film which acted as a measure of reliability in

case the film was partially damaged. Ultimately, SDDS has been vastly

overshadowed by the preferred DTS (Digital Theatre System) and Dolby Digital

standards in the motion picture industry. SDDS was solely developed for use in

the theatre circuit; Sony never intended to develop a home theatre version of

SDDS.

Sony and Philips jointly developed the Sony-Philips digital interface format

(S/PDIF) and the high-fidelity audio system SACD. The latter has since been

entrenched in a format war with DVD-Audio. At present, neither has gained a

major foothold with the general public. CDs are preferred by consumers because

of their ubiquitous presence in consumer devices.

In 1994 Sony launched its PlayStation (later PS one). This successful console

was succeeded by the PlayStation 2 in 2000, itself succeeded by the PlayStation

3 in 2006. The PlayStation brand was extended to the portable games market in

2005 by the PlayStation Portable. Sony developed the Universal Media Disc

(UMD) optical disc medium for use on the PlayStation Portable. Although Sony

tried to push the UMD format for movies, major studios stopped supporting the

format in the Spring of 2006.

In 2004, Sony built upon its MiniDisc format by releasing Hi-MD. Hi-MD allows

the playback and recording of audio on newly-introduced 1GB Hi-MD discs in

addition to playback and recording on regular MiniDiscs. Recordings on the Hi-

MD Walkmans can be transferred to and from the computer virtually unrestricted,

unlike earlier NetMD. In addition to saving audio on the discs, Hi-MD allows the

storage of computer files such as documents, videos and photos. Hi-MD

introduced the ability to record CD-quality audio with its linear PCM recording

feature. It was the first time since MiniDisc's introduction in 1992 that the ATRAC

codec could be bypassed and lossless CD-quality audio could be recorded on

the small discs.

36

Sony is currently touting its Blu-ray Disc optical disc format, which is likely to

compete with Toshiba's HD DVD. As of quarter one of 2006, Blu-ray Disc has the

backing of every major motion picture studio except Universal. In December

2006 Sony debuted their first Blu-ray player, the Sony BDP-S1 with an MSRP of

US $999.95.

Management

On March 7, 2005, Sony Corp. announced that Nobuyuki Idei will step down as

Chairman and Group CEO and will be replaced by British Sir Howard Stringer,

current Chairman and CEO of Sony Corporation of America, Corporate Executive

Officer, Vice Chairman and COO Sony Entertainment Business Group. Sony's

decision to replace Idei with the British Howard Stringer will mark the first time

that a foreigner will run a major Japanese electronics firm. Sony Corp. also

announced on the same date that current president, Kunitake Ando, will step

down and be replaced by Ryoji Chubachi.

37

ANALYSIS & INTERPRETATION

38

Analysis of the data collected from questionnaire 1

(Category: User)

0

5

10

15

20

25

No

. of

peo

ple

Age <15 15-20 20-25 25-30

age (in yrs)

Figure 1.0

Interpretation: From the above table and figure we can easily see that the

majority of the users of gaming consoles fall in the 20-25 year age group.

Age No. of people

<15 2

15-20 6

20-25 21

25-30 1

39

Gender Number

male 28

female 2

male93%

female7%

Figure 1.1

Interpretation: As clearly shown in the above figure, the majority of the users of

gaming consoles are male.

40

Ownership Number

Own 19

Do not own 11

Do not ow n 37%

Ow n 63%

Figure 1.2

Interpretation: Out of the total respondents interviewed only 63% own a

console. But 100% of the respondents are aware of game consoles and have

played either PlayStation or Xbox360.

41

Type of console Owners

PlayStation 3 1

PlayStation 2 11

PlayStation 2

PSP 2

Xbox360 3

PlayStation 3

PlayStation 2

PlayStation PSPXbox360

0

2

4

6

8

10

12

nu

mb

er

of

peo

ple

Figure 1.3

Interpretation: Maximum number of respondents interviewed, who own a

console, have a PlayStation 2(PS2).

42

Time spent(per week) No. of people

<5 hrs 7

5-10 hrs 15

10-15 hrs 5

15-20 hrs 2

20-25 hrs 1

25-30 hrs 0

>30 hrs 0

<5 hrs23%

5-10 hrs50%

25-30 hrs0%

>30 hrs0%

20-25 hrs3%

10-15 hrs17%

15-20 hrs7%

Figure 1.4

Interpretation: Fifty percent of the people interviewed spend at least almost an hour a day on video games, be it consoles, computer or others.

43

Money spent monthly(in Rs) No. of people

<500 15

500-1000 6

1000-1500 6

1500-2000 0

2000-2500 0

2500-3000 2

>3000 1

Money spent (monthly)

0

2

4

6

8

10

12

14

16

<500 500-1000 1000-1500 1500-2000 2000-2500 2500-3000 >3000

Amount(in Rs)

No

. of

peo

ple

Figure 1.5

Interpretation: Most of the people interviewed are not willing to spend much money on video games.

44

Attributes No.of people

Appearance 10

Price 14

Brand 19

Promotion 7

Online Services 8

Games 20

Attributes preferred for a game console

Appearance13%

Price18%

Brand24%

Promotion9%

Online Services10%

Games26%

Figure 2.0

Interpretation: As can be seen from the above pie chart, the variety of games, the brand of the console and the price of the product matter most to the customers.

45

Sources of information

No. of people

TV 15

Magazines 19

Newspapers 11

Internet 11

Peers 15

Promotions 8

others 1

Sources of information

TV19%

Magazines23%

others1%

New spapers14%

Internet14%

Peers19%

Promotions10%

Figure 3.1

Interpretation : Twenty three percent of the people get their information from magazines closely followed by TV and peers. Companies can think of concentrating more on advertising through these media and creating positive word of mouth.

46

Other kinds of video games

No. of people

Computer games 18

Handhelds 5

Internet gaming 13

Arcade games 10

Other video games played

Computer games39%

Handhelds11%

Internet gaming28%

Arcade games22%

Figure 4.2

Interpretation: Since most houses have a computer, computer gaming is far more common. This is followed by internet gaming since people are more used to computers. Due to the lack of arcades in India this form of gaming has not caught on here as it has in Japan and the US.

47

Xbox 360No. of people

played 23

not played 7

Xbox360

played77%

not played23%

Figure 5.3

PlayStation(any model)

played 93%

not played7%

Figure 6.4

PlayStation(any model)

No. of people

played 28

not played 2

48

Preference

Xbox36053%

PlayStation 347%

Figure 7.5

PreferenceNo. of people

Xbox360 16

PlayStation 3 14

49

PlayedNot played Preference

Xbox360 23 7 16

PS 28 2 14

Xbox360

PS

Xbox360

PS

Xbox360PS

0

5

10

15

20

25

30

No

.of

peo

ple

Played Not played Preference

Figure 3.0

Interpretation: Those who know of consoles in India have almost surely played any one of the PlayStation models. Also Xbox 360 due to its kiosks present in many electronic stores in most metropolitan cities in India, has been played or at least tried by many gamers.

50

Analysis of the data collected from questionnaire 2

(Category: Sony dealers)

Duration of dealership(SONY)

No. of dealers

0-3 yrs 4

3-6 yrs 2

6-9 yrs 3

9-12 yrs 1

0

0.5

1

1.5

2

2.5

3

3.5

4

No

. of

dea

lers

0-3 yrs 3-6 yrs 6-9 yrs 9-12 yrs

years

Duration of dealership(SONY)

Figure 3.1

51

Sony exclusive dealers

No. of dealers

YES 4

NO 6

Are you a SONY exclusive dealer?

NO60%

YES40%

Figure 3.2

Dealers who sell PS

No. of dealers

yes 5

no 5

Dealers selling PlayStation

no50%

yes50%

Figure 3.3

52

Dealers Interested in keeping PS No. of dealers

interested 6

not interested 4

Interested in keeping PlayStation

not interested40%

interested 60%

Figure 3.4

Sony dealers dealing in PS3

No. of dealers

yes 5

no 5

Dealers dealing in PlayStation 3

yes50%

no50%

yesno

Figure 3.5

53

Dealer expectationsNo. of dealers

Good launch 2

Promotions and advertising 5

Better Pricing 1

Customer schemes 6

Dealer expectations

Good launch14%

Promotions and advertising

36%Better Pricing

7%

Customer schemes

43%

Figure 4.0

Interpretation: PS3 is being sold mainly by the exclusive dealers of Sony. Some other dealers are also interested in keeping PS3. Customer schemes and promotions & advertising are what most dealers are looking for.

54

Analysis of the data collected from questionnaire 3

(Category: Microsoft dealers)

Duration of dealership(Xbox360)

No. of dealers

0-3 months 8

3-6 months 5

6-9 months 3

9-12 months 2

>1 yr 2

Duration of dealership(Xbox360)

0

1

2

3

45

6

7

8

9

0-3 months 3-6 months 6-9 months 9-12months

>1 yr

No

. of

dea

lers

Figure 4.1

Interpretation: Microsoft dealers are relatively young with most of them being no more than 3 months old.

55

Promotions and Advertising

No. of dealers

satisfied 20

dissatisfied 0

Satisfaction of dealers with Microsoft w .r.t PROMOTIONS & ADVERTISING

satisfied100%

dissatisfied0%

Figure 4.2

Customer schemes

No. of dealers

Satisfied 15

Dissatisfied 5

Satisfaction of dealers with Microsoft w.r.t CUSTOMER SCHEMES

Satisf ied75%

Dissatisf ied25%

Figure 4.3

56

Pricing No. of dealers

Satisfied 12

Dissatisfied 8

Satisfaction of dealers with Microsoft w.r.t. PRICING

Satisfied60%

Dissatisf ied40%

Figure 4.4

Margins and commissions

No. of dealers

Satisfied 17

Dissatisfied 3

Satisfaction of dealers with Microsoft w.r.t. MARGINS & COMMISSIONS

Satisfied85%

Dissatisfied15%

Figure 4.5

57

Satisfied DissatisfiedPromotions and Advertising 20 0Customer schemes 15 5Pricing 12 8Margins and commissions 17 3

Satisfied

Dissatisf ied

Satisf ied

Dissatisf ied

Satisf ied

Dissatisf ied

Satisf ied

Dissatisf ied

02468

101214161820

No

. o

f D

eale

rs

Promotionsand

Advertising

Customerschemes

Pricing Margins andcommissions

Satisfaction of Microsoft Xbox dealers

Figure 5.0

Interpretation: As we can see easily from the graph, most dealers are dissatisfied with the pricing of the product, whereas all are quiet content with Microsoft with respect to promotions.

58

Do you deal in Sony products?

No. of dealers

yes 10

no 10

Do you deal in SONY products?

yes50%

no50%

Figure 5.1

Are you open to Sony dealership for PS3? No. of dealers

yes 8

no 12

Dealers open to Sony dealership for PS3

yes40%

no60%

Figure 5.2

59

Do you have a contract with MS prohibiting dealing with Sony? No. of dealersyes 3no 11no answer 6

Do you have a contract w ith Microsoft which prohibits you from dealing w ith Sony for the PS3?

no55%

yes15%no answ er

30%

Figure 5.3

Interpretation: Since, for most dealers, there are no contracts prohibiting them from dealing in Sony PS3, this could be a viable option for many dealers.

60

Hypothesis testing

Ho – The launch of Sony PS3 will not affect the sales of Microsoft

Xbox360

Hi – The launch of Sony PS3 will affect the sales of Microsoft Xbox360

Calculation:

High Medium Low

Customer interest 10 15 5 30

Impact of PS3launch 5 19 6 30

15 34 11 60

Expected

7.5 17 5.5

7.5 17 5.5

O-E (O-E)² (O-E)²/E

2.5 6.25 0.83

2 4 0.23

0.5 0.25 0.04

2.5 0.625 0.08

2 4 0.23

0.5 0.25 0.04

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X² = 1.45

Degrees of freedom = (row – 1) (column – 1) = (2 – 1)(3 – 1) = 2

X²(table) = 5.991

X² < X²(table)

Therefore, ACCEPT Ho.

Ho – The launch of Sony PS3 will not affect the sales of Microsoft

Xbox360

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FINDINGS & RECOMMENDATIONS

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FINDINGS:

Awareness about the product (gaming consoles) is relatively low due to the fact that this is something new in India

Microsoft Xbox360 was released at least six months prior to the release of Sony PS3, which helped it to conquer the market

Price of the products are very high(Xbox360 costs Rs. 27,750 approximately and PS3 costs Rs. 39,990)

Price of accessories are also high(game cds cost Rs.1000-Rs.2800)

Training given to salesmen, on the product, is not sufficient.

There exists strong brand loyalty in this industry

This product is more suited for older children and adults due to the graphic nature of the games

There exists untapped markets, especially among young girls, families and young working professionals

Provides scope for new business opportunities

Marketing approach of the two companies is completely different. Xbox 360 is available in many electronic outlets around the city whereas PS3 is available in mainly the Sony exclusive outlets only.

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RECOMMENDATIONS:

There needs to be more promotions and advertising to create awareness of the product. Especially mall promotions are recommended by the dealers.

Pricing needs to be reconsidered to make the product more accessible to those interested.

Better and more choices for customer schemes should be made available

Since brand loyalty plays a major role, companies need to look into this aspect carefully. For eg. After sales service and customer retention strategies should be looked into.

Salespeople should be better trained about the product

Untapped markets like those of young working professionals must be exploited

More educational games for younger children is a good way to convince parents to buy this product for their children. Also more games for girls and families would be a good idea. Family games are too few and there are practically no games for girls.

Since the game cds are too expensive for most people to afford the companies should look into renting out cds.

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BIBLIOGRAPHY

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REFERENCES:

www.sonyworld.com

www.microsoft.com

www.wikipedia.com

www.gameguru.com

www.xbox.com

Philip Kotler, ‘Marketing Management’, 12th edition, Prentice-Hall India, New Delhi, 2006

C.R.Kothari, ‘Research Methodology’, 2nd edition, Wishwa Prakashan, New Delhi, 2001

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