Week 2 EOC: Boston Consulting Group - Video Games

Week 2 EOC: Boston Consulting Group - Video Games

 This article positions the upcoming Nintendo Wii U in the Star category of the BCG model and the Sony Playstation 3 in the Cash Cow area.

 “The Wii U has been generating a huge amount of buzz in the video game industry lately. Already we can see how the long list of cross-platform and exclusive Wii U games is turning the focus away from the Wii U’s supposedly underpowered graphical capabilities and toward its robust content offerings. If these exclusive deals continue,  we could see a transformation of the Japanese video game market, especially given Microsoft’s poor footing and Sony’s current struggles.” -http://www.forbes.com/sites/erikkain/2012/09/18/how-nintendo-is-taking-over-the-japanese-video-game-market-one-ip-at-a-time/

Meanwhile, another article postulates that the demise of Nintendo console games to the smartphone market is premature, thus while Nintendo consoles may not be the star that they used to be, they are cash cows. It goes on to say the smart phone gaming is not gaining in market share, putting them in the cash cows or dog segment:

“He acknowledges the arrival and growth of smartphone gaming, but says it’s just not the threat to handheld gaming some have made it out to be. “I think a lot of this discussion is based on the premise that the handheld gaming device market is shrinking or vanishing and I don’t think that is true,” said Iwata. History’s on his side. Nintendo remains the predominant handheld tastemaker. For all the ballyhoo about smartphone gaming, it looks an awful lot today like it did last, and the year before that. And that’s where Iwata makes his best argument: Smartphone gaming is really about killing time, he says, whereas handhelds like the 3DS are about having a “rich experience.”” --http://techland.time.com/2012/08/23/is-the-handheld-video-games-market-shrinking-or-just-changing/

This article too also supports the idea that while the rest of the video game market is floundering, putting Sony and Microsoft into the cash cow category and risking falling into the dog category, Nintendo, with the upcoming arrival of the Wii U, despite competition from phones, is a star:

Videogame sales continue to fall off a cliff — down 42 percent in April. The problem? We’re at the end of a console cycle and consumers are spending more time on social and mobile games on their smartphones and iPads. This year’s E3 is missing the big news of a splashy new video game console from either Microsoft’s Xbox or Sony’s PS3. Nintendo will be rolling out details of its new console, the Wii-U, which it first announced last year, and which is going on sale this holiday season. Nintendo has a unique window to snag new customers for its console — it’ll be another year before Microsoft or Sony come out with a next-generation product.

The Wii U aims to embrace social networking with what it calls the “Miiverse,” to allow gamers to see what others are playing, and to share game content and tips. Nintendo will eventually allow gamers to connect to the “Miiverse” not just through the console, but also through its 3DS handheld, as well as computers and smartphones. --http://www.cnbc.com/id/47674049/Videogame_Dilemma_Old_Hardware_Shrinking_Market