The paper "Strategic Management in the Video Game Industry" Is a wonderful example of a Management Case Study. The video gaming industry is one that is full of competition. The major competitors, in no specific order, are Sony, Nintendo, and Microsoft. Sony was the main dominating company between the years 1995 and 2006, accounting for almost 60% of the total world sales of gaming consoles. Following Sony was Microsoft, and these two were the main leaders in the market of video gaming consoles. Nintendo emerged some years later and had a very weak start and most people wrote off Nintendo as a competitor in this industry.
Its poor performance was mainly accounted for the poor technological advancement Nintendo used, but there were also many other contributing factors. However, in 2009, Nintendo Wii rose to the top in the video gaming industry, and this unexpected success seems to have brought confusion to the two formerly leading companies in the industry (Wolf 121). One common thing about Sony and Microsoft is that they both viewed the video game console not as a product in its own right but as a component that has multiple functionalities (gaming and internet connection), and they, therefore, used the video gaming consoles as a marketing strategy.
However, Nintendo Wii came with an altogether different idea that worked: it designed gaming consoles and gaming machines that were specifically for the purpose of gaming, therefore selling them as products in their own capacities. Another common thing about Sony and Microsoft was that both targeted male gamers aged between 11 and 30, and they, therefore, designed games and gaming consoles that were very sophisticated or hardcore, and the hardware and software had great capacities and graphics (Rainey 210).
The storylines behind the games, too, were very complex. However, Nintendo Wii also came up with another shocking but successful logic: instead of targeting sophisticated and hardcore gamers, it would target casual gamers, and the capacities of the hardware and the graphics would be way less sophisticated than those of Sony and Microsoft. The idea here was to ensure that the games and hardware provided would be understood by the gamers with speed and ease, not having sophisticated hardware and games that were complex and not easy to learn and enjoy (Wesley & Barczak 102). This strategy was a pure mockery to Sony and Microsoft’ s complex and sophisticated strategies, and these two companies at first labeled Nintendo Wii as an outlier or an outsider, who had chosen to be separate from the mainstream strategy in the industry.
However, the two companies decided that Nintendo’ s strategy worked, then it was not an outlier, but it was absolutely one of the strategies failed (Wesley & Barczak 107). This report is a case study on the three major competitors in the video gaming industry in relation to strategic management.
Strategic management is very important to any business, as good strategic management in its micro and macro environments gives the business a competitive advantage over similar businesses in the market, and the business also gets higher sustainability over its competitors. A summary of the PESTEL analysis and the Industry Level analysis on the case will also be given in the report.