Entering the Economic Models of Game Console Manufacturers
Communications & Strategies, No. 73, p. 23, 1st Quarter 2009
20 Pages Posted: 30 Jun 2009
Date Written: June, 29 2009
This paper deals with the video game console market. We are not interested here in portable consoles nor in PC games. Our work focuses on the role of core competencies in console wars, analyzing the way these competencies are activated within the firms' business models. The home console market also exhibits crossed network externalities, which requires console manufacturers the ability to conciliate the interests of both developers and gamers. From a strategic point of view, core competencies are closely related with market performance. Today, Sony's and Microsoft's business models are quite similar. However, Microsoft and Sony remain far behind Nintendo and its Wii, which suggests that core competencies do not discriminate on performance as much as the positioning choices made upstream when the strategy is crafted. The link between core competencies, economic model and strategy is at the heart of this study.
Keywords: video game console, business model, core competencies, two-sided market, platform
JEL Classification: L1, L82
Suggested Citation: Suggested Citation