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Waging a Standards War. Wonsoo Chang Petur Gislason Patrick Léger Joe Stamps. Overview. Game console industry Launch of Xbox Managing expectations Market opportunities Competitive outlook Microsoft’s weaknesses Discussion. Game Console Industry. $6.5B industry Mature market

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wonsoo chang petur gislason patrick l ger joe stamps

Waging a Standards War

Wonsoo Chang

Petur Gislason

Patrick Léger

Joe Stamps

overview
Overview
  • Game console industry
  • Launch of Xbox
  • Managing expectations
  • Market opportunities
  • Competitive outlook
  • Microsoft’s weaknesses
  • Discussion
game console industry
Game Console Industry
  • $6.5B industry
  • Mature market
  • Increasingly competitive
  • Generally not reverse-compatible
  • Lack of interchangeability
microsoft s xbox
Microsoft’s Xbox
  • Scheduled launch: Fall 2001
  • Pentium III processor
  • Compatible with PC games
  • Evolutionary system
  • Proliferation of Windows platform in low-end devices
managing expectations
Managing Expectations
  • Vaporware strategy
  • Entice potential PlayStation 2 users to wait for Xbox
  • Solid track record in creating positive feedback
    • Windows 95
market opportunities
Market Opportunities
  • Sony’s failures create an opportunity for Microsoft:
    • Poor architecture hinders game development
    • Underestimation of demand weakened potential for positive feedback
  • Lack of uniform platform for game development (need for Pentium III)
competitive outlook
Competitive Outlook
  • Lack of installed console user base
  • Existing base of game developers for PC market
  • Lower costs for game developers
  • Game availability increases value of game console
weaknesses
Weaknesses
  • PC games may not appeal to console users
  • Threat of low quality PC games
  • Lack of dominant console game developers
  • Answers/outcomes:
    • Market efficiency
    • Partnerships with key developers
discussion
Discussion
  • Will vaporware strategy work?
  • How should Sony respond?
  • What is the long-term outlook for Microsoft?
  • How will increased piracy affect game development?