Nick+Benjes

toc

Strategy report
TO: Proximity video team FROM: Nick Benjes DATE: September 25, 2009 SUBJECT: Xbox 360 strategy analysis

Here is my Xbox 360 strategy analysis. Although the Xbox 360 is currently in second place in sales of the three top gaming consoles, the battle for first place critically depends on price, games, and accessories. Whether Gen Y users will purchase an Xbox 360, however, depends on whether Microsoft can offer the console for the right price with the best accessories.


 * Profile**

The Xbox 360 is a high-profile seventh generation video game console manufactured by the Microsoft Corporation. The gaming console was first developed in early 2003 and first released November 22, 2005 (Wikipedia 2009). A total of 30.2 million units have been sold to date (Wikipedia 2009).

Xbox 360’s revenues comes from four main sources:


 * //consumers// who purchase Xbox 360 console
 * //game manufacturers// who produce games for the Xbox 360
 * //netflix subscribers// who use Xbox 360 to watch movies
 * //xbox live subscribers// who pay for online gaming

Xbox 360 revenue fell twelve percent in fourth quarter revenue compared to the prior year. Microsoft sold 1.2 million consoles in this quarter compared to 1.3 million one year ago. Xbox 360 revenue declined to a $169 million profit for the fiscal year due to decreased sales and price reductions (Punch Jump 2009).


 * Competitive landscape**

The primary force driving competition in the gaming marketplace is the selection of other gaming consoles and the enhancements they offer. Although Microsoft dropped the prices of the Xbox 360 consoles, Sony and Nintendo also lowered their prices. Sony’s “Playstation 3” and Nintendo’s “Wii” offer accessories the Xbox does not, ranging from blue-ray disc players to motion activated controllers (Piatt 2009). Sony also offers free online gaming compared to a costly Xbox live membership.


 * Xbox 360’s strategy**

Microsoft has chosen to continue the battle with Sony and Nintendo to hopefully climb to the top of sales with the Xbox 360. Although Xbox charges for online gaming, every five seconds a new member joins “Xbox Live” adding to its 12 million-plus member lists (Piatt 2009). Microsoft has increased their revenue by teaming up with Netflix to offer streaming videos directly to the users Xbox 360. Xbox Live members are able to rent more than 10,000 movies compared to Sony’s 300 movies (Piatt 2009).

Microsoft has also decided to enter the family scene, which rocketed Nintendo’s “Wii” to the top of the charts. Microsoft has developed an enhancement for Xbox Live called “Xbox Live Primetime.” This feature allows users to play the same game shows that are aired on television. Xbox also caters to music fans and competes with Nintendo Wii Music with the “Rock Band” game series (Piatt 2009).


 * Gen-Y implications**

Although Xbox 360 may remain second in the number of sales to the Nintendo Wii, there is not much more Microsoft can do to appeal to Gen Y. Even though the Xbox is appealing to Gen Y, the Nintendo Wii gains more revenue because it appeals to family consumers. The bottom line is that families have more money to spend on such entertainment than Gen Y. If Microsoft could develop a new way to appeal more to families and Gen Y together, they may claim the most sales.


 * References**

Piatt, Christopher. Sony vs. Microsoft vs. Nintendo. (2008, July 21). Retrieved September 24, 2009 from [].

Punch Jump. (2009, July 25). Microsoft Xbox 360 division revenue falls 25%. Retrieved September 24, 2009 from [].

Wikipedia. (2009, September 27). History of video game consoles (seventh generation). Retrieved September 25, 2009 from [|http://en.wikipedia.org/wiki/History_of_video_game_consoles_(seventh_generation]).

Wikipedia. (2009, September 25). Xbox 360. Retrieved September 25, 2009 from [].

Blog proposal
TO: Proximity video team FROM: Nick Benjes SUBJECT: Blog post proposal DATE: October 25, 2009

I propose that we do our Proximity blog post on Netflix making their service available for Sony Playstation 3 users. This post can be used to attract a new group of clients who want to access Netflix on their gaming consoles.


 * Rationale**

Making streaming video available on the Playstation 3 will attract many new Netflix subscribers. Playstation 3 users will now be able to access streaming video just like Microsoft’s “Xbox 360” users. This could spike sales in Playstation 3 consoles and increase the demand for Netflix on other gaming consoles such as Nintendo’s “Wii.”


 * Sources**

I recommend that we organize the post around [|GameSpot's: Netflix breaks down PS3 deal] which contains a question and answer with Netflix Vice President, Steve Swasey. We can then use other sources that contain figures and assumptions associated with this deal.

[]

[]

Report proposal
TO: Proximity Video Team FROM: Nick Benjes DATE: November 21, 2009 SUBJECT: Proposal for report on Xbox 360

Microsoft’s Xbox 360 first dominated the seventh generation gaming market with its high-definition and online gaming technology. It now seeks domination with in a quickly advancing gaming market with very strong competition. I propose to write a report on how Xbox 360 is evolving a brand strategy to utilize new technology to gain edge on competition.


 * Need**

The want for features such as social networking and hands-free gaming is increasing.


 * Nintendo’s Wii is utilizing a wireless remote that can be used as a pointing device and can detect movement in three dimensions


 * Viewing and storing premium video content is becoming a must on video game consoles


 * Social networking will be merging into gaming consoles which will be highly demanded


 * The competition for the best gaming console is becoming more intense and requires more features to gain an advantage over the other

No gaming console on the market offers all three of these features. The future of gaming demands all three of these features as well as a reasonable price.

Clients of Proximity who wish to target Gen-Y consumers need this report to understand Xbox360’s strategy and plan to deliver interactive ads suited to the future gaming landscape.


 * Topics**

The proposed report, “Xbox 360 Evolving Strategy for Next-Generation Gaming,” will cover the following topics:


 * The proposed changes in future gaming


 * The strategy Xbox will utilize to compete in the new era


 * New technology that will be incorporated in gaming consoles


 * Competitors and their strategies compared to Xbox

The report will also include partnerships that Xbox has/will acquire in order to gain a competitive advantage over other consoles.


 * Sources**

The following items are key sources for the report.

Schiesel, Seth. Microsoft Reveals New Strategy for Xbox (2009, June 1). //New York Times.// Retrieved November 18, 2009 from [].

Schiesel reports on Microsoft’s entertainment strategy of making Xbox 360 a gateway for movies, television, and social networking. Schiesel notes relationships that will develop with outside sources such as Facebook and Twitter. Schiesel also mentions the new technology Microsoft will incorporate for the next generation of gaming.

Laker, Freddie. How Xbox’s Social Strategy Could Change Gaming Forever (2009, June 6). //Advertising Age//. Retrieved November 18, 2009 from []

Laker reports from the E3 Expo, news that gamers worldwide have anticipated for great time. Laker analyzes company statements and further concludes that Xbox could possibly release a deathblow to the competition with their new market strategy.

Edwards, Cliff. Game Console Makers at a Crossroads (2009, November 18). //BusinessWeek//. Retrieved November 20, 2009 from []

Edwards notes that gaming consoles such as Xbox 360, Playstation 3, and Wii must formulate new strategies in order to compete with new gaming platforms such as smartphones. Edwards analyzes smartphones and notes that the ultimate competition is a consumer’s free time. Edwards’s stresses that console makers need to focus more on addressing the creation of exclusive games.

Details leak on Microsoft’s Project Natal game control strategy (2009, November 11). //VentureBeat//. Retrieved November 20, 2009 from []

This article explains Microsoft’s strategy on the new technology that Xbox will incorporate into a future system. This technology is crucial in taking a competitive advantage over other gaming consoles. It also discusses information pertaining to future sale predictions worldwide.

Facebook, Twitter coming to Microsoft Xbox 360 next week (2009, November). //Telegraph.// Retrieved November 20, 2009 from []

This article discusses the new online update for Xbox 360 users that will enable them to use social networking devices such as Facebook and Twitter. This article features quotes from general managers discussing new ways of pioneering video entertainment. It also discusses partnerships with other companies, seeking to become the main entertainment hub in family homes.

Team conference presentation proposal
//paste team conference presentation here//