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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 l.jpg

Waging a Standards War

Wonsoo Chang

Petur Gislason

Patrick Léger

Joe Stamps


Overview l.jpg
Overview

  • Game console industry

  • Launch of Xbox

  • Managing expectations

  • Market opportunities

  • Competitive outlook

  • Microsoft’s weaknesses

  • Discussion


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Game Console Industry

  • $6.5B industry

  • Mature market

  • Increasingly competitive

  • Generally not reverse-compatible

  • Lack of interchangeability


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Microsoft’s Xbox

  • Scheduled launch: Fall 2001

  • Pentium III processor

  • Compatible with PC games

  • Evolutionary system

  • Proliferation of Windows platform in low-end devices


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Managing Expectations

  • Vaporware strategy

  • Entice potential PlayStation 2 users to wait for Xbox

  • Solid track record in creating positive feedback

    • Windows 95


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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)


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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


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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


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Discussion

  • Will vaporware strategy work?

  • How should Sony respond?

  • What is the long-term outlook for Microsoft?

  • How will increased piracy affect game development?