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Michele Della Briotta Yeganeh Mashayekh Stephen Stokols Steven Sesar Charlie Zhong

The document summarizes Microsoft's Xbox gaming console. It describes Xbox's features, specifications, the gaming market size and Xbox's competitors. The gaming market is valued at $50 billion in 2001. Xbox's main competitors are Sony's PlayStation 2 and Nintendo's GameCube. The document also outlines Microsoft's current marketing strategy, which targets sophisticated gamers ages 18-34. It recommends increasing Xbox's price to $349 to position it as higher quality, focusing on online gaming as a differentiator, increasing game development partnerships, and communicating Xbox's superior capabilities.

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122 views17 pages

Michele Della Briotta Yeganeh Mashayekh Stephen Stokols Steven Sesar Charlie Zhong

The document summarizes Microsoft's Xbox gaming console. It describes Xbox's features, specifications, the gaming market size and Xbox's competitors. The gaming market is valued at $50 billion in 2001. Xbox's main competitors are Sony's PlayStation 2 and Nintendo's GameCube. The document also outlines Microsoft's current marketing strategy, which targets sophisticated gamers ages 18-34. It recommends increasing Xbox's price to $349 to position it as higher quality, focusing on online gaming as a differentiator, increasing game development partnerships, and communicating Xbox's superior capabilities.

Uploaded by

saajanra
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 17

 



     


  

Michele Della Briotta


Yeganeh Mashayekh
Stephen Stokols
Steven Sesar
Charlie Zhong
Introduction

What is Xbox? Product Description


Gaming Market
Competitive Landscape
Microsoftðs Current Marketing Strategy
Recommendations
What is XBOX?
Xbox is an entertainment hub that provides users:
² High Quality Video Games
² DVD Player
² Internet Support
- Online gaming
- Web surfing, Checking E-mail, etc.

² Audio/Video System
- Create soundtracks
- Supports HDTV and TV resolutions up to 1920 x 1080.
Product Specifications

ëelease Date November 15, 2001


Cost $299
CPU 733 MHz Intel Pentium
III
Memory 64 MB of RAM
Hard Disk 8 GB
Online Capabilities Broadband
Capability
GPU 300 MHz Custom 3D
Storage Medium 5 x DVD
Market Size
Total Gaming Market Size: $50 Billion, 2001
2001 total market served by Xbox: $18.5 Billion
2006 total market served by Xbox: $47 Billion
MAë  SëD
2001 2006
þ 
   
þ   
   
   
Market Share
The console market has few players
² Sony owns 45% of the console market
² Sega exited the console market this year
  



  

 



  

  


Gaming Value Chain
The value chain in the game industry
² A few strong incumbents are leading the market
² Content companies and console makers are
creating the capabilities to control the consumer
² Content companies are creating platforms and
consolidating to create economies of scale

Create Select Sell & Provide Provide


Content Package Distribute Access Game Play
(developer) (publisher) (distributor) (retailer) (console)
Top Competitors
Sony PlayStation 2 Nintendo GameCube
Sony is the market Leader GameCube is $199 only
PS2 has entered market a Nintendo has historically
year earlier than Xbox and successfully game brands
GameCube
PS2 has achieved critical Nintendo has most
mass advantageous royalty
Sony has the largest structure
selection of video games GameCube is targeted at 7-
PS2 is targeted at 18-34 16 year old consumer
year old consumer market market
Product Comparison
Competition Microsoft Sony Nintendo
Basis Xbox PlayStation GameCube
Video game Numerous game 2Over 200 titles, In-house + heavy
variety (most developer winning this 3rd party support
important basis) partnerships basis (due to new
royalty)
Price $299 $299 $199
Differentiation Broadband, DVD, DVD Strictly gaming
733 MHz

Marketing budget $500 million ($111 Comparable Comparable


million this year)

Graphics quality Best among the


three
Competitive Landscape

High

echnology
Sophistication

‰  Gamers Ages 18 - 34


 
 
 ?  

   


Sony Playstation 2  

  

   Sony Playstation



  
Gamers under 18
„intendo Game Cube ?  

 


 

Low

0 300+
„umber of Games Offered

§ 
    
§   !    "  #
Current Marketing Strategies
Target Market
- Sophisticated gamers
- Men, ages 18 to 34
- Consumers who want more than just games
Pricing
- Console is priced at $299
- Bundling issues
Distribution
- Sell 1 to 1.5 million consoles by the end of the year
- Xbox will be available at most major retail outlets
- The product will be launched in Europe and Japan next year
Current Marketing Strategies Cont.
Supply
- Flextronics: regional Xbox manufacturing operations in Mexico
- Retailers started taking advanced orders in early September
Partnerships
- The company has signed more than 200 of then worldAs top
game developers and publishers to create Xbox games
- Marketing partnerships have been formed with Taco Bell and
Sobe
Communication
- $500 million worldwide marketing budget
- $111 million domestic this year
- Primarily print and television advertising
- Only $500k spent on online advertising
Long Term Strategy
M$
M %&M
Generation I: Generation II: Generation III:
Just plays games ntertainment hub All-ncompassing
(1990¶s) (2003) unit like PC (2005)

Competing consoles run on different OSs


Microsoft must ensure that Xbox, and more
importantly, its OS, is the dominant standard.
Keeping Xbox at the forefront of migration to PC
² Introduce new features closely related to PC to
accelerate the consoleðs transition to a PC
Positioning Strategy
Xbox is positioned as possessing higher quality and more
functionality than existing consoles
High

echnology Microsoft Xbox


Sophistication Gamers Ages 18 - 34

‰  Gamers Ages 18 - 34


 
 
 ?  

   


Sony Playstation 2  

  

   Sony Playstation



  
Gamers under 18
„intendo Game Cube ?  

 


 

Low

0 „umber of Games Offered 300+

§ 
    
§   !    "  #
Recommendations: 3 P¶s
Pricing: Increase price point $50, to $349
² Aid in positioning as higher quality: XPrice = Performance
² Reduce loss per unit
² Non-Price Competitive signal to Sony and Nintendo
Positioning: Target online gaming niche by focusing on
Internet Gaming as the KEY differentiator
² Ability to improve prices as a result
² Dominate online gaming market niche
Partnerships: Increase game development network
² Tap entertainment industry for band and creativity
² Online gaming developers
Recommendations Cont.

Distribution: Create Incentives for Retailer


² Increase margins on console and/or Video
Games
² Develop joint promotion and advertising
campaigns
Communication: Focus communication of
superior capabilities
² Specifications vs. Capabilities
² Co-Promote games
² More co-advertising online with e-tailors
¢ 

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