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What Is the defining business Essay What is the defining business and economic characteristics of the video game console industry? ? Intensity of competition: the competition in the video game industry is dramatically fierce. There are three largest companies in this industry, which are Nintendo, Sony and Microsoft. Additionally, lots of companies have relatively high level of strength, for example:high technology and meet the social trend, which are able to compete in the market place. ? Market size; the target market for the products cover all over the world ,however,the cumulate sales in Europe, Japan and the U. S are higher compare to other regions. ?Influenced by global recession: video game is not the necessary product, hence,the global economic recession have influenced the sale of video game products. The revenue declines 6% in 2010 compare to 2009, and also continued decreasing in 2011. ?Growth rapidly:the video game industry have been growingrapidly, and also expected to continue growing in the future. What is the industry like? The companies in video game industry refer to provide high technological and innovative products. It includes online game, mobile game, video game console and handheld game. In addition, in order to attract exist and potential consumers and build customer loyalty, these companies multiply their efforts to enhancethe technology of the products. What’s more, video game business sectorupdate very fast, the new generation replaced the old one in short period. Meanwhile, the companies launched latest production rapidly. However, an obviously issue is that the target market is limited, young men are the majority part. What 3-5 key factors determine the success of video game console developers like Nintendo (2009-2012)? 1. Unique concept of video game console: In the original period, the video game companies tend to pay more attention to improving technology, which lead to less market share and high competition, however, after a strategic research, Nintendo intend to create product differentiation advantage over rivals, it avoid pursuing high-tech blindly, focusing on developing unique function of product, such as to allowed consumers to participate in the games by themselves. That characteristic can easily catch consumers’ attention. Having a unique and propriety concept is essential in video game console industry. 2. New market segment: The video game market is almost saturated;hence, these game companies have to seek new target market to survive. In traditional video game console target market, men occupied the majority portion. In order to gain more profit, companies should take effort to attract more women, elderly and so on. In terms of extending market share, companies can’t rely on a small proportion of population. Nintendo designed â€Å"Wii† not only just for men but also for the whole family, the game is very suitable for everyone 3. Technology capability: High technology capability is a vital factor for game companies to be a leader in video game console industry; it can provide more technical advantage over rivals. 4. Various range of products: In today’s world, people have relatively high demand of products, in order to satisfy the needs, it is necessary to produce diverse product to grab more market share. 5. Low cost Undeniably, reducing cost is an effective way to make profit gain, low cost lead to low price, and low price are more acceptable by consumers. Reference: Morris, C. (2011), Video Game Sales Drop 6% in 2010, Second Year of Declines, [Online] Available from: http://www. cnbc. com/id/41062675/Video_Game_Sales_Drop_6_in_2010_Second_Year_of_Declines.