Boston Consulting Group

When a person first reads this article they understand that the gaming industry has been a victim of the recession and how the industry went in a downwards spiral. As a person keeps reading they may start to think this article has nothing to do with the recession and all it talks about is the different games within the different gaming companies. Then it hits them, this article is about how the three gaming companies; Nintendo, Microsoft, and Sony Corp.; were forced to compete with each other on a new level because all three were affected by the recession. “The tentacles of the recession have reached into the videogame industry, a business that was long considered downturn-resistant.” Videogame Makers Can't Dodge Recession JULY 28, 2009 YUKARI IWATANI KANE Page 1 The recession caused Microsoft and Nintendo’s sales to plummet 38%. As it becomes more and more popular to buy games online less and less people are going to the stores run by Microsoft and Nintendo. The recession also hit the customers of Microsoft, Nintendo, and Sony. Nobody wanted to spend their money on games when they weren’t making much at all. “The weakness stems from more consumers sitting on the sidelines and tightening their purse strings.” Videogame Makers Can't Dodge Recession JULY 28, 2009 YUKARI IWATANI KANE Page 2 This forced the gaming industries to cut their prices on their gaming consoles. Sony cut their prices by $100 on its play station 3 making Microsoft to cut their prices on their x-box 360’s. Instead of Nintendo cutting their already $250 low price, the company bundled its Wii with games.  Industries tend to organize their companies into different groups. A question mark is a product that needs a lot of money to stay “alive”. Microsoft’s X-box 360 would be the Question Mark. “Question marks are low-share business units in high-growth markets.” 2 Company and Marketing Strategy Partnering to Build Customer Relations Page 11