Case analysis presentation for a third year strategic leadership course

Microsoft 's XBOX A Case Study Presented by

Contents History of the Industry Microsoft 's Strength and Weaknesses Nature of the Videogame Industry SWOT Analysis Corporate Strategy Business Strategy Microsoft Structure and Control systems Recommendations History of the Video Game Industry Generational Release of Competing Consoles Current Players are Sony , Microsoft , Nintendo Generations spaced roughly 5 years Succeeding generations feature faster and better features and graphics Microsoft has been a player for past two generations , Sony three and Nintendo five Microsoft 's

strength and weakness Huge war chest Can afford to lose a lot of dollars before profitability Can afford to purchase smaller companies Large Technical Know-how Already a player in PC Games market Has no established videogame franchises Weak presence in the Asian Market Last to Enter the Market Opportunities and Threats Videogame market is growing market Generational aspect guarantees new wave of sales every generation Growth of Online Gaming Microsoft capitalized on this with Xbox Live Use of PC components made it easy to program Huge boon for startup developers Microsoft had to lose money on every console made SWOT Analysis Entering Video Game Market was a huge gamble Clear that Microsoft was going to have to dedicate itself to Videogames for next few generations Only way to recoup losses Only way to realize full potential of XBOX Microsoft will have to capitalize on its size and PC experience Videogame Industry Players Console Manufacturers Game Developers Make the actual game Publishing Companies Market and Manufacture games Retailers Distribution Channel for videogames and consoles Cash Flows between players Videogame Industry Trends Most titles are released over all platforms Publishers increase sales by releasing on all titles Blur differences between platforms Platforms are sold on Exclusive Titles ' which are not released on other platforms Important that exclusives are must-haves Some exclusive titles are co-developed by the console company (example : Mario games

Current and Previous Generations Sixth Generation (2000-2006 Sony Playstation - 111M units sold Nintendo Gamecube - 21 .5M units sold Microsoft XBOX - 24 .189M units sold Seventh Generation (2006-present Microsoft XBOX 360 - 16 .187M units sold Nintendo Wii - 22 .257M units sold Sony Playstation 3 - 10 .6M units sold

Sales of 6th generation consoles from launch date Seventh Generation Update Microsoft was first to release giving it largest install base XBOX 360 plagued with design flaws Cost Microsoft billions in returned units Wii divided market by targeting nontraditional markets Girls and Elderly Implemented by designing Wii to have unique control instead of sheer powerful graphics Successful Strategy Sales of 7th generation consoles from launch date Microsoft XBOX Business Strategy Library Expansion Microsoft started to work on gaining own Exclusive Titles strived to port Sony exclusives to the Xbox Was extra courteous to game developers Release of Xbox 360 early into the next product cycle Established large install base early on

Corporate Strategy Windows Everywhere Push to have Microsoft products in as many aspects of consumer lives Xbox is way of bringing Microsoft to the living room space Windows as the language...