The Future of Gaming: Xbox one

The Future of Gaming: Xbox One

Microsoft has been one of the most successful names of our generation. They were named the second most valuable brand by Forbes Magazine. They had over 86 billion dollars in sales in the year 2014. A big portion of the sale comes from its well-known product the Xbox One. The Xbox had its ups and downs in the past few years, but currently the Xbox One holds a strong position against its competitors because of Microsoft’s marketing strategy and decision making.

Competition:

Xbox One’s direct competitor is Sony’s console PlayStation 4. They both provide a unique gaming experience however, the Xbox One differentiates itself as Microsoft focuses more on offering the customer a wider multimedia experience with the inclusion of apps, TV, music and skype. Also they introduced the new “snapping” feature which allows a user to multitask different games and apps on the screen at one time, while the PlayStation 4 is more based on pure gaming experience. Furthermore, looking at the exclusive games for two consoles, most exclusives marketed for the PlayStation are more single player oriented, while those for the Xbox One are more online multiplayer based. Another competitor for the Xbox One is the Nintendo’s Wii U. The Wii U, however, retails for $249, and is more of an indirect competitor as it is has much less graphical capabilities, instead focusing on motion based gameplay and party play, and generally targeting at a younger audience.

Industry trends:

As with all technology-based products, the general industry trend is to constantly try to innovate and make additions to the product. For the console industry, the innovation means pushing consoles gaming capabilities further not only in terms of the graphical capabilities, but also of how you perceive the games by adding features like a touchpad to the PlayStation or “rumble triggers” for the Xbox One. Rumble triggers in the finger buttons, vibrates on activation to give the player a sense of being part of the game. Moreover, both Microsoft and Sony with the help of new features like TV, apps and web browsing, trying to reposition their consoles in the mind of the consumers, attempting to move them from being solely a gaming platform to an all-around media entertainment system. Furthermore, this console generation and the console industry is also affected by the general technology trends of the era, meaning that games have started moving from a tangible product to a digital, nonphysical copy you pay for and download online. This is an innovative move by the producers as it allows for extremely low production costs since no disk or box is involved, as well as instant and free distribution. Looking into the future of the console industry, trends like the innovation of the systems into “more than just consoles” is likely to be continued. This can be seen as Microsoft and Sony is introducing Virtual Reality goggles within the next few years, which in the case of release, would allow the systems to be played like a real world simulator.

Environmental threats and opportunities

The major environmental threats to the Xbox One and the console industry in general is rapid development of computer components, software and technology. As many know, the PC will always have an edge over consoles as its components are much more configurable. Furthermore, the computer can be used for things other than gaming, and its components can easily be upgraded with parts such as graphics cards or hard drives. Currently, however, the biggest current threat to the console industry and computer industry is the rapid growth and development of tablets and smartphones. Now more than ever these devices are getting smarter, faster and more powerful. Additionally, the supplies of games and apps offered on both the app store and android market is growing exponentially. Based on the pace at which the smartphone and tablet industry is moving forward, the console industry has to evolve within the next few years or it will be outrun by the portability, mobility and speed of its smaller counterpart.

The market:

The main target market for the Xbox One is more casual gamers, all around media users and price conscious consumers, as it provides all the gaming capabilities of a computer, but at a lower price tag. The target audience for the Xbox One is mostly young adults between the age of 14 and 30, as this covers the age of the average gamer. Also the Xbox One differentiates itself from both the computer and smartphones as it allows you to play on your TV, and connect all your cable boxes and TV into one.

Marketing Strategies:

Microsoft’s Xbox one was released on November 22nd, 2013 in North America. In the past two years it has taken different market positions to attract users and stay in the competition with Sony’s PlayStation 4. At launch Xbox one tried to use skimming price strategy and sell the console at $499 but fell short to the PlayStation in terms of sales which was available in the market for only $399. The Xbox was forced to drop its price to stay in the competition with the PlayStation. Unfortunately because of Xbox one’s bad marketing strategy at the start it was shy of 2 million units to the PlayStation at the end of the year 2013. PlayStation’s success continued in the following year with 18 million units in sale where the Xbox one was at 11 million.

Finally at the year 2015. Microsoft has decided to change its price strategy to penetrate the market. Microsoft partnered up with other gaming industries to offer bundles of Xbox at an unbeatable lower price. With the recent release of Xbox One exclusive games such as Halo and Rise of the Tomb Raider the popularity of the console has increased significantly. Xbox One’s penetration pricing strategy made them really successful this year especially this holiday season. Furthermore, Xbox clearly gives the consumers more value for the price offering two games and the console only for $299, allowing the Xbox for the first time in two years to go even with the PlayStation in terms of monthly sales.

Microsoft’s main distribution channel is its own website which arguably has the superior deals. Also major electronics retailers such as Target, BestBuy and GameStop have their own customized deals for the Xbox One. Online only stores such as Amazon, Dell and New Egg are also huge part of Microsoft’s recent success behind the Xbox One.

Microsoft has taken numerous strategies to promote the Xbox One, bundle pricing being the biggest one. You can get