Week 2 EOC: Boston Consulting Group- Video Games

          In a world where video games and video gaming is almost as serious as professional sports, it comes as no surprise that these consoles: Xbox One, Playstation 4, and Wii U, control the consumer market. The next natural question one would ask would be “who’s on top?” Though die-hard fans of each brand, respectively, would argue their favorite, numbers don’t lie. However, just because one console in this console war might be on top now does not mean the trends and future market may change. To best understand this, let’s look at a comparison between the big 3. Coming out on top out of the three consoles is the Playstation 4. Market research clearly shows the wide margin Playstation 4 has amongst its closest competitors. “In April, the PS4 not only bested the competition, but it sold more than the Xbox One and Wii U combined. VGChartz estimates that Sony sold a whopping 579,850 PS4 units, while Microsoft sold a respectable 335,101 Xbox Ones and Nintendo sold only 120,568 Wii U units. If you do the math, that works out to the PS4 selling over 73 percent more than the Xbox One and over 380 percent more than the Wii U.” (http://wallstcheatsheet.com/technology/xbox-one-vs-ps4-vs-wii-u-sony-and-nintendo-keep-strong.html/?a=viewall) Although the margin has since grown smaller, [Xbox One sales are slowly rising with Microsoft’s move to sell the Xbox One at a lower price point and separate from kinect] Playstation still dominates the playing field. Therefore, a Boston Consulting Group analysis would deem the Playstation 4 a cash cow in the market. “Much has been made of the fact that Sony launched the PS4 for $399, $100 less than the starting price of the Xbox One. But a more important comparison to explain its fast start is that the PS3 was released all the way back in 2006 for $499 or $599. The pricier model was far more desirable and adjusting for inflation would be $708 today. A $399 PS4 is 44% less expensive in constant dollars.” (http://www.forbes.com/sites/markrogowsky/2014/08/21/dear-sony-heres-why-so-many-people-are-buying-the-ps4/) Furthermore, a more recent finding from Forbes provides some insight on who’s buying Sony’s newest innovation, “According to data given to Re/code, Nielsen surveyed 1,200 gamers from age 7 to 54 and found that 31 percent, almost a third, bought a PS4 after owning an Xbox 360 or Wii, but not a PS3.” (http://www.forbes.com/sites/insertcoin/2014/08/25/nearly-one-third-of-ps4-owners-switched-from-xbox-360-or-wii/) Clearly, a substantial portion of PS4 owners aren’t merely Playstation fan boys or loyal Sony users, but rather, a consumer who never came from the Sony franchise at all.
          Moreover, the Xbox One is the question mark in this equation. Its numbers prove [through a steady increase of sales since April] that the market growth is there. The only question would be the relative market share which, currently, is up in the air. How Microsoft approaches sales and marketing in the coming holiday season will determine how well Microsoft’s prize child will do. 
          Finally, we’re left with the Wii U. The Wii U has been out for consumers for almost two years now and their results aren’t as impressive as once expected. “Through June 30 of this year, Wii U has sold 6.68 million hardware units and nearly 37 million games. Both of those totals are under what Nintendo had at one point projected it would sell in a single fiscal year.” (http://fortune.com/2014/09/14/nintendo-wii-u-turnaround/) Nintendo has consistently been on the bottom for the duration of the console wars and for that reason; the Wii U lacks market power. Therefore, I would be inclined to say that the Wii U, in this point in time, remains the Dog in the market. There really hasn’t been any market growth nor and the market share value of the Wii U simply doesn’t compare to the Xbox One or Playstation 4.
          In final analysis, all three consoles hold a special place in a gamer’s heart. Even if your company didn’t make it on top, the fact still remains that gaming is a huge industry and cash crop in this digital age we live in. In the meantime, let’s all sit back, relax, and game on.