Side by Side Analysis of each of the 3 Consoles

I've been pleasantly amused by the amount of activity regarding the 3 coming consoles. It seems people are quick to jump to extreme conclusions such as PS3 Rocks or PS3 Sucks. This is why I decided to compare them, from a simple point of view, and see which is stronger in which aspect. In the end the final decision is to be made by consumers who I believe to be quite bright.

I wanted to sift through all the bad mouthing and rumors to finally compare the 3 next-gen consoles using all the info I have up to this point in time. This is my final conclusion on the positve and negative characteristics of each.

Advantages of Each System

X360:

1) Early launch and this means it will soon have a huge library of games.
2) Creating good games: It seems that Gears of War would be a lot of fun. I also enjoyed playing Halo and Halo 2 so MS seriously have started to create good games
3) Xbox Live: I remember when we all used to wish for online playability on a console and MS has done it and pretty well
4) Great Support services for damaged systems

PS3:

1) Created to be a multimedia hub. (before you start complaining just look at the disadvantages section)
2) Has next-gen multimedia (Blu Ray disc) allowing for huge storage space for games
3) Comes out of the box with a Hard Disk so there is a slight advantage when it comes to loading times
4) Has great franchises on previous platforms which can be played easily on the next gen
5) Great history when it comes to supporting system in terms of games. (We can still see there are great games coming soon to the PS2 even though the Xbox and GCube have stopped)

Wii:

1) Going to be cheap
2) Innovation at its best. (Nintendo has really outdone themselves this time when it comes to creating something new)
3) Learning from their mistakes Nintendo has tried to accumulate third party support
4) The ability to play multiple older generation games
5) Nintendo's huge fan base (lets admit they have rabid fans)

Now lets look at the disadvantages of each

X360:

1) Creating a next gen system that is basically an upgrade of the old one. When comparing the Xbox and Xbox 360 the only improvement difference is the increase in console graphics, display (i.e. HD Display) and maybe a few minor things like wireless controllers. The problem here is that MS did not bring anything new other than software. Think about it, MS buffed up the old system the 360 still uses DVD format, It still has the same controller as the Xbox with no new functionality.
2) MS does not support its previous console owners (They really got screwed on backward compatibility) in addition to the lack of new releases for the old system.
3) Reports on damaged systems are very concerning and even though MS has fixed them quite quickly the fact that they have gotten so much attention means that they are serious
4) Lack of worldwide support. MS might be doing all it can in the US but around the world gamers cannot simply dial an 800 number expecting to get another xbox if the one they own stops functioning. In some parts of Asia X360 systems are US systems and are sold with a electricity converter. That is lame

PS3:

1) The Price (you knew it). The PS3 is extremely pricey. I know there are those that think it is justified but that does not work for everyone and in a just comparison it does play a factor.
2) Multimedia Hub? (told you it was coming) As appealing as that is some people already have their home entertainment systems and simply want to play games without connecting to the internet, playing movies or any contacting alien starships
3) Huge risk in Blu Ray disks but unlike many people I honestly don't think Sony simply put in a Blu Ray player on a whim. However trying to force new technology on people = not good idea
4) Release date is delayed. This means many releases from now until November will not be making it on the PS3 (not critical point)
5) What the hell can you do with that motion sensing system. It looked more uncomfortable than simply using analogue sticks. This may be to their detriment
6) Removal of Rumble. This I cannot forgive since many games have given us a taste of what rumble does. It allows games to use a sense different from sight and sound and we all know the more senses use to interact the more interesting things become. Hopefully third party controllers will have rumble.

Wii:

1) The Wii is dependant on Innovation. As good as that is it may have a reverse effect since gamers may not be inclined to wave their arms around to play games.
2) Games across consoles will be extremely difficult to play and that includes all the previous games on older systems that the Wii is going to play. How do you play Game cube games using the Wii mote.
3) Easy to pick on yet not 100% sure is lack of HD gaming. (not such a big deal in my book)
4) Graphical Marvel it aint !! The weakest of the three systems in terms of graphics is the Wii. Nintendo does not plan to battle based on graphics but to some that is a huge factor when comparing consoles. I can understand this view since many people are inclined to think if I can buy a Ferrari why buy a Camry, who cares if I only drive two miles a day? PC Gamers especially have the tendency to think: I had better get the best system first and then worry about if there are any games that are actually gone use it to the max..

If you have gotten this far I applaud you for your patience and please notice that I have given only my honest opinion as many have hopefully all the different console supporters are willing to admit there is a bad side as well as a good to every console. However it will all be revealed by the end of the year so there is no point in bickering about it at this point in time.

Console Wars

It seems that any website related to technology has already noticed the coming war and it seems coverage is extremely well since things have gotten a lot more complicated since the creation of the Gameboy back in the 80's. This year seems to be one of the toughest in terms of competition among the three main companies: Nintendo, Sony and Microsoft. The latter two dominated the last generation with Sony eating up the largest share by far. This year things have taken an interesting twist. The three companies are each competing differently.

Nintendo has given up on competing on visual updates instead concentrating on giving gamers a fun system that will not cost much. The new consile was codenamed "Revolution" for almost a year, indicating what they plan to do to the game videogame industry. The new system uses a motion sensitive remote that is used in different positions to play a variety of games. Nintendo has announced that it will launch its new console entitled "Wii" which is pronounced "Wee" at a price below $250. This is even cheaper than the Playstation 2 launch price. Nintendo has decided that they will look to new markets rather than compete for hardcore gamers. They have created a system that they hope will reach the mass market. Any marketing student would tell you mass marketing is a thing of the past but Nintendo is not reluctant to announce their plans. Some may doubt but Nintendo could end up obliterating the competition. In a recent poll conducted by Famitsu, a Japanese magazine, 70% of the people surveyed said they were most exited about the Wii. It seems that the strong showing of Nintendo's console at E3 (electronics entertainment expo) this year really blew away any fears people had of Nintendo's movement away from the usual battle for better visuals. Nintendo also has the most fanatical supporters who never give up on them. It seems that Nintendo is set for success but it can all change in an instant if they do not pull off their strategy with great accuracy since gamers now have a choice of where to go for their fun unlike the old days of the Gameboy.

The Xbox 360 has been on the market for almost a year and has sold out in many shops and online retailers including Amazon.com. This is great for a short period of time but what is Microsoft doing? The Xbox 360 has been out of stock on Amazon.com for almost 3 months now and it seems that the shortage will continue. Microsoft is almost a year ahead of the other consoles. They chose to release their console in November of 2005 but since they have had many problems, most of which they have dealt with, including the overheating and failure of many of the devices. The Xbox 360, in my opinion, is not exactly going to rule the next generation even with its current establishment in the gaming market. The reason being they have not done any improvements other than an increase in visual splendor. To give them credit they have done an amazing job at improving the graphics on their current games but if taken in comparison to the old Xbox then it is clear that they are still using the same contoller with no additions except a change in the placement of two buttions and they are still using DVD as their medium even though the new High Definition war is on the verge as the home electronics manufacturers duke it out to see which format will dominate. Will it be Blu-ray (Backed by Sony) or HD-DVD (Backed by Toshiba)? Microsoft has thrown its money on HD-DVD which makes this even more exiting as they battle the big S on 2 fronts. Not surpringly they have announced an add on drive to the X360 that will enable it to play HD-DVD. One of the biggest mistakes Microsoft made with the original Xbox is that it failed to tempt Japanese audiences. This was a huge mistake seeing as Japan is the second largest video game consumer in the world. They tried to correct this with their new console but unfortunately they cannot get enough Japanese companies on board. This online comic created by cubetoons.com gives you an idea of how bad Microsoft is doing in Japan.

From cubetoons.com

Microsoft's primary advantage comes from their web service named Xbox Live. MS has managed to create a world where players can interact with each other through their consoles. It was the first widely accepted method of online play using a console. This gave Microsoft an edge when they released the Xbox 360 which also took advantage of this online system.

The final and most interesting fate yet to be revealed is Sony's. Sony is having major problems all over its empire. The movies created by Sony Studios seem to consistently flop with the exception of Spiderman. Their music labels are also not doing so well in addition to that their LCD televisions are only now starting to become popular due to the late entry by Sony. The video game market was their safe haven and now it seems they are planning to take a gamble that could end up making or breaking them. Sony's strategy works a little like this: Sony needs to increase their profits and they are planning on using their most profitable products to do that. The Playstation 3 set to be released in November is what they are betting their hopes on. The Playstation 3 includes a Blu-ray drive which is fighting to become the most adopted high definition format.

If Sony succeeds in becoming the most dominant player in the video game market they will manage to boost their sales on Blu ray disks and movies, thus increasing profits in their other sectors. What Sony hopes to acheive is all home electronics consumers are watching Blu-ray movies on their Sony LCD screens through their Playstation 3's. I personally don't see this happening since the Playstation 3 is priced way above any console ever created but it is cheap for a High Def movie player which is why it still has a chance of success. Sony has tried to move away from conventional gaming, instead they have called the PS3 a computer that happens to play games. they have even hinted at future upgrades that could be implemented to their systems.

Three industry giants. One will remain victorious when the dust settles. Who will it be? My guess is if Sony plays its cards right and are a little lucky they will remain on top for a thrid generation in a row but if they falter then Microsoft will use their muscle to take up market share. Nintendo on the other hand is the wild card. Both MS and Sony are probably more concerned about Nintendo than they are about each other since they have very little information about their new system as well as the extremely positive E3 showing of their system. By the end of the year things should hopefullybecome a little clearer.

Dell takes a bite out of the gaming market

Link to article: Dell agrees to buy Alienware

The article I decided to analyze this week is about the acquisition of Alienware, a well known high-end PC manufacturer, by Dell. I have decided that the most appropriate method to analyze this article is through Barney’s VRIO framework.

The high end consumer market is a very profitable one which Dell has realized that it needs to have a stronger presence in this market. Dell has already entered the market with its XPS line of gaming computers and has probably realized that it is a great market to make money.

Question of Value: With the acquisition of Alienware dell adds an already very lucrative business into its business. However this is not all since with the purchase of Alienware Dell has the chance to learn from an industry leader what it takes to create award winning powerful computers. This knowledge will help Dell with the XPS line targeted towards gamers. In addition Alienware also brings with it rewarding contracts from the government and other large buyers. With this acquisition Dell also reduces the competition it faces in this new market it hopes to establish itself in.

Question of Rareness: Alienware has long been established in the gaming community as a leader, so with the acquisition Dell has gained a reputable brand. The knowledge of the market that Alienware brings with it is also very rare since it has been in the gaming industry for much longer than Dell and can provide it with insight on what it is that gamers are looking for.

Question of Imitability: The brands reputation is not something which can be easily challenged by competing game manufacturers. Alienware’s brand image is also something which cannot be copied. However the article does mention that Dell should be careful about how it treats Alienware since the brand name may be compromised if Dell attempts to make changes.

Question of Organization: Dell has decided not to make changes to the company’s already successful management. They have decided that they should probably not risk the wrath of Alienware followers who are not inclined to see things change. Alienware will continue and will probably work as an independent subordinate of Dell. In addition the founders of Alienware are going to remain with the company, as well as their vision of how the company should be run.

Dell has probably made very profitable deal and is in sync with any goals of expanding into the gaming market however it is yet to be seen how Alienware’s clients will view this arrangement. Will they view it as Alienware selling out to a multinational? or will they view it as a long awaited expansion which will help them make better systems? I guess that depends on consumer sentiment.

A website where people enjoy watching ads.

link to article

Heavy.com is a website that makes money from advertising products to visitors to it’s site. Sounds pretty average doesn’t it but in fact Heavy.com manages to squeeze the advertising into a website that incorporates all the elements of a good time for young men. This article describes how Heavy.com functions and how it has managed to become unique among competitors in the market. Unfortunately however we, UAE residents, cannot view this site as it is currently blocked by our ISP.

I will be looking at this article from a Hamel Perspective.

Core Strategy:

Heavy.com advertises to young men in ways that will attract their attention by building ads around items that interest them. While this idea seems simple it is in fact quite hard to pull off.

Product Market Scope:

Heavy.com focuses on males who are in their late teens to early thirties. This means that the companies they hope to attract to their website are those targeting this segment of consumers. This includes Burger King, Virgin Mobile and Sony Entertainment.

Basis of Differentiation:

By using interactive features with almost no text the site constantly keeps visitor’s eyes glued to the screen. They also use a different approach to advertising than is usually used in the industry. They often refuse to use the same adds the company employs in its campaigns. Heavy.com creates its own ads by using icons and brands in a more creative way. They also blend the ads they create with the content of the website so as to make them less obtrusive. The two founders are also unique in their vision of how their website works. They refuse to compromise their vision of how advertising should take place on Heavy.com

Core Competencies:

The site creators have managed to understand the way the age group they are targeting thinks. They have also managed to stay on top of the game and follow the trends that emerge in the market. The most important skill they seem to have mastered is the formulation of content that appeals to their most frequent visitors.

Information and Insight:

The two founders are in tune with what visitors to their site want to see. This allows them to place ads on their site effectively. Both the founders have worked in marketing to the same age group that Heavy.com targets so they bring with them some experience as to what this age group wants to see.

Relationship Dynamics:

Heavy.com seems to have a very detached method of working with the companies that advertise on the website. They prefer to do things their way. This is done in order not to compromise the main idea behind the site. The creators want to keep the gritty approach to advertising they are currently pursuing. They are not afraid to refuse to use ads provided by their potential sponsors so as to constantly provide a unique atmosphere at Heavy.com.

Pricing Structure:

They offer games and videos for free while making the money off advertisements that are constantly running on the site. Also many videos which are featured on the site are created by amateurs who send in their work. This means that they do not have to pay huge sums of money to the creators.

Vista "Destroyer of Spyware and Viruses"

The article entitled "Spyware-killing Vista could take out rivals" gives an insider look at the new measures Microsoft is taking to insure its next generation of Windows software is widely received by consumers everywhere.
The new Windows entitled “Vista” is looking to take over as the new operating system starting in late 2006. The new Windows however has added quite a bit to its functionality. It is aiming eliminate the need for anti-virus and spy ware removal software.
From a Porter’s stand point this new function will undoubtedly be a success since buyers will no longer need to look for anti-virus solutions which will reduce the costs of purchasing a new computer. In addition to that the cost of switching is extremely low since the software will have it integrate into the system already. The quality of the product will be undoubted since it is backed by the largest software company in the world.
Microsoft will be able to enter the market with almost no problems since any purchaser of the next generation of Windows will be forced to have this new software installed in their computer. This new entry by Microsoft is probably due to two reasons. The first is that Microsoft has received many complaints about the use of spy ware and viruses in Windows XP, and the second reason is probably the huge increase in the market for Antivirus software. With such huge industry growth Microsoft has decided to enter this lucrative market. Microsoft will be entering in competition with experienced companies such as Symantec, the creator of Norton Antivirus, and McAfee. This new rivalry will be quite hard on these companies but they are counting on their experience to bring users back to them. According to the article they are mostly hoping to attract businesses if they lose home users.
Microsoft naturally has an advantage of economies of scale with huge sales of their Windows software. However a few entry barriers may appear. One of the most prominent is government control. If Microsoft attempts to horde the market as it did with its internet explorer software then the US government will most likely interfere.
The market will most probably never be saturated since spyware creators are constantly trying to come up with ways to compromise computers. This will surely cause antivirus and antispyware software creators to attempt to beat the Juggernaut known as Microsoft by distinguishing themselves based on services and the speed at which they respond to emerging threats to consumers.

The next generation war hurts consumers

Link to article: http://gear.ign.com/articles/691/691408p1.html

The next generation video media war will be fought between the Blue Ray Drive, supported by companies such as Sony, Apple, Sharp, TDK and Dell, and the HD-DVD or High Definition DVD which is supported by Toshiba, Sanyo and recently Microsoft. Both of these coalitions will be severely affected by the new issues which have arisen.
In this article it is safe to say that the bargaining power is in the hands of the suppliers as they are the ones who will decide how we view next generation media. They have already decided that an initial loss of customers due to the strict regulations they have initiated is warranted. This barrier to entry for movie pirates seems to have made it harder on consumers to enjoy their movies.
The production companies will probably have to deal with this issue when the next generation of DVD players is released since consumer advocates, which is an interest group, will probably not let this issue pass easily especially since many of those who bought HDTV’s in the past few years are unable to use them to their full potential. The article also mentions that any television without HDCP (High-bandwidth Digital Content Protection technology) will not be able to play these movies. This means that any LCD or plasma televisions bought to play HDMI (High Definition Movie Input) is almost useless since none of them have the ability to play HDCP compliant video. This is another barrier of entry set up by the AACP (Advanced Access Content System) since this means that any company wishing to manufacture a next generation DVD media player needs to go through several steps which include licensing by various companies who produce the hardware required by the AACS. Another problem that consumers will face from this is that there will be high switching costs to move to the next generation of media since they will have to pay for a HDCP compliant television which will be extremely expensive.
The AACP probably wants to make it impossible to imitate the next generation of media in order to protect their investment. They seem to not be satisfied with the government’s barrier to entry and have decided that they will take matters into their own hands from now on.

Comments on "Seniors at Senior Level"

This article tells the story of the aging of senior managers in America. Aging is usually viewed as a sign of weakness but in today’s world that might not be the case. Experience comes with age. We all know that experience is highly sought in the business world and it is considered as an entry barrier in Porters 5 forces framework. Experiences as those gained by top management such as Warren Buffet and Dana Cable Sr. are impossible to copy by new comers to their industries. This is probably a result of the Social Complexity (Barney, p56) Also experience helps to add value to the company. By gaining experience these management gurus are more likely spot opportunities and threats that younger counterparts cannot. Another positive aspect of gaining experience is that it increases the Strategic Assets of a firm by increasing their core competencies. By hiring these ageing managers the firm can stand to gain a great deal from their know-how and insight into the industry. Another thing that can increase is profit boosters. Increasing returns are affected by learning effects, which as means as the firm learns more the firm has a higher potential for profit.
However there is a down side to all these managers staying in place for long periods of time. These managers may be experienced and knowledgeable about their respective industries but they also need to step aside and allow for new people to take care of the business. The article mentions that older workers are becoming needed however younger workers will also need jobs which are becoming less available as the working population becomes older.