BASM 580A – Responding to the Wii Case
Analysis and Recommendations
Presented By:
Davin Luke, Jesse Goranson, Kelly Moss, Jorge Lobo, Kyler Tebbutt, Howe Gu
Responding to the Wii Case
Executive Summary
Responding to the Wii Case
2
Historical Positioning Strategy
In recent dynastic cycles Sony has dominated the gaming console industry. However, with the introduction of the
Nintendo Wii, Sony’s competitive position has been dwarfed by its inability to penetrate non-traditional customer
segments.
Nintendo
Microsoft
Sega
Sony
NEC
Nintendo
Atari
Fairchild
Coleco
Casual
Mixed
Responding to the Wii Case
Serious
3
Current Industry Assessment – Porter’s 5 Forces Framework
Although Sony has few competitors (Microsoft & Nintendo) due to high barriers-to-entry and startup costs, buyers
and suppliers (game developers) have high bargaining power and low switching costs – they can easily choose
between console systems that provide the most innovative attributes.
Supplier
Power
Entry
barriers
Internal
rivalry
Buyer
Power
High
R&D costs
Network
Brand equity
Aligned developer
High
PS3 & XBOX
core player
Wii causal player
& core player
High
Many (cheaper)
options
Low switching
costs
Substitutes
HIGH
MEDIUM
LOW
Hardware: Low
Many suppliers
Low switching cost
Software: High
Developers chose
Responding to the Wii Case
Low
Other living room
entertainment:
TV, PC & Movies
4
Problem Statement and Scope
The main problem facing Sony is that they are competing fiercely with Microsoft’s XBox for the serious gamers while
Nintendo Wii has also been stealing market share and opening new opportunities within the casual gamer segment.
External
Internal
How can Sony regain its market leadership
position for video game consoles by the next
“Dynastic Cycle”?
How can Sony improve operating margins by at
least 10% during the next “Dynastic Cycle”?...