The environmental forces against the gaming industry is due
to the countries recession. The only way
gaming companies will survive, is their adaptability. The question is whether the various gaming
companies will come up with strategic planning in order to recover from this
economic downfall.
Upon research, I expect to see Apple INC. to become the
latest cash cow on a slow decline towards the dog category. With the ability to offer an abundance of
different gaming apps for low cost or not cost at all, as well as the
supporting of past years profits, Apple INC will survive this economic down
turn but it is on it's way to peaking due to competitors such as Samsung. According to a post in The Economist, “Yet even if it produces a cheaper iPhone, pushes deep
into China and wows the world with a smart TV, its shares will not reconquering
last year’s peak. Competition is now tougher in its core markets. Rivals will
not let it disrupt new ones so easily. Apple may dip into its $137 billion cash
lake to boost its share price by paying fatter dividends or buying back more
stock. That would delight some investors, but others would see it as a tacit
admission that the firm’s great innovation engine has stalled. Apple won’t
crumble, but it has peaked” (The Economist (from the print edition: Business,
1).
Companies such as Sony, Microsoft
INC, and Nintendo are slowly declining from cash cow's down to the dog
category. “Analysts expect Sony to cut the price
on its PS3 by about $100 this year, leading to price cuts by Microsoft on some
of its Xbox 360 models. The PS3 starts at about $400, compared with the
equivalent Xbox 360, which costs about $300. Though Nintendo has said it won't
cut prices on its $250 Wii this year, it is expected to do so indirectly by
bundling games with the console” (Kane, 2).
Sony decided to reduce prices on the PS3 models in
order to make possible profit; which shows signs of them divesting in their
companies products which supports the idea of their slow decline to Dog. Microsoft is following Sony's lead towards
divesting as well by cutting their prices on Xbox 360 models which will in turn
make many gaming supporters happy, but possibly holding out to see if further
drops will ensue.
Nintendo is trying to hold on to being a cash cow
by refusing to lower prices on game consoles even with their 38% plummet in
profits on Wii (Kane, 1). Instead,
Nintendo has taken a different approach compared to brands such as Sony and
Microsoft. “Many
videogame executives say they remain positive about the industry, pointing to
coming releases of big titles. Nintendo
is launching “Wii Sports Resort,” a collection of resort sports games, this
week.--Though Nintendo has said it won't cut prices on its $250 Wii this year,
it is expected to do so indirectly by bundling games with the console” (Kane,
2).
Nintendo may be taking on different approaches
compared to Microsoft and Sony, the company is still investing into new games
and cutting costs in a much more creative way than the competitor
companies. Nintendo, was in fact trying
to hold tight to the idea of staying a cash cow through innovative thinking;
but profit losses show that their innovative thinking is bringing them down to
the Dog category.
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