Home video game industry Essay Example for Free

Home video game industry Essay In 1972 founders Nolan Bushnell and Ted Dabney scrounged $50,000 from family, friends and local banks, formed their own company. They hired Alan Alcorn who created Pong and put a sample unit in Andy Capps Tavern in suburban Sunnyvale to see if anyone would play it. Twenty-four hours later, the owner called Bushnell in a rage and demanded that he get over to the bar with his tool kit as soon as possiblethe prototype game had broken down because it was being flooded with money. Pong was more than a game of Ping-Pong on a video screen. This was the beginning of Atari, while Atari made millions off the game consoles, they sold the software to many other major companies, and in turn they came out with their own version of pong. Although Atari saw profits from software royalties they kicked themselves out of the video game markets as other companies were using the pong model to penetrate the market. At the time of the U. S. crash, there were numerous consoles on the market, including the Atari 2600, Atari 5200, Bally Astrocade, ColecoVision, Emerson Arcadia 2001 Magnavox Odyssey 2,and the Vectrex. Home computers had more memory and faster processors than a console, they permitted more sophisticated games. They could also be used for tasks such as word processing and home accounting. Games were easier to duplicate, since they could be packaged as floppy disks or cassette tapes instead of ROM modules. This opened the field to third-party software developers. In 1986, Nintendo president Hiroshi Yamauchi noted that Atari collapsed because they gave too much freedom to third-party developers and the market was swamped with rubbish games. In response, Nintendo limited the number of titles that third-party developers could release for their system each year, and promoted its Seal of Quality, which it allowed to be used on games and peripherals by publishers that met Nintendos quality standards]. The North American video game crash had two long-lasting results. The first result was that dominance in the home console market shifted from the United States to Japan. When the video game market recovered in the late 1980s, Nintendos NES was by far the dominant console, leaving only a fraction of the market to a resurgent Atari battling Segas Master System for the number-two spot soon after. By 1989, home video game sales in the United States had reached $5 billion, surpassing the 1982 peak of $3 billion during the previous generation. A large majority of the market was controlled by Nintendo, whose NES ultimately sold more than 35 million units in the United States, exceeding the sales of other consoles and personal computers by a considerable margin With the introduction of the Sega Genesis in America, Sega of America launched an anti-Nintendo campaign to carry the momentum to the new generation of games, with its slogan Genesis does what Nintendont. This was initially implemented by Sega of America President Michael Katz. When Nintendo launched its Super Nintendo Entertainment System in 1991, Sega changed its slogan to Welcome to the next level. Sega re-branded itself with a new game and mascot, Sonic the Hedgehog. This shift led to a wider success for the Genesis and would eventually propel Sega to 65% of the market in North America for a brief time. On May 11, 1995, Sega released the Sega Saturn in the American market. Segas first CD console that was not an add on, utilized two 32-bit processors and preceded both the Sony PlayStation and the Nintendo 64 The lack of a strong Sonic and its high price in comparison to the PlayStation were among the reasons for the failure of the console. The 3DO Company lacked the resources to manufacture consoles themselves, and instead licensed the hardware to other companies for manufacturing. Trip Hawkins recounted that they approached every electronics manufacturer, but that their chief targets were Sony and Panasonic, the two largest consumer electronics companies in the world. Founder trip Hawkins thought by selling his software to the main markets he could penetrate the market with a high price brining in a high profit margin. The launch price of the Play Station in the American market was US$299, undercutting their competitors, but knew that they would sell more consoles and make profit in the long-term. Xbox entered the console market because of a direct threat from Sony. They thought that consoles would take over web-browsing and directly hurt their main network in home computer systems. With annual revenues of close to 20 billion dollars Microsoft decided to invest 4 billion to develop the Xbox. With already a huge brand name and high product value in the computer market, Xbox was a massive success in the gaming network knowing they had the capability to keep up with the technical aspects of the other competitors. While Nintendo’s Game Cube was a bust, Nintendo knew they needed to use knew software in order to compete with the dominating Xbox and Play Stations new motion sensitive technology was cheap to integrate in software and Nintendo took advantage of that market. The Nintendo Wii launched in 2007, used old game that branded the Nintendo name including The Mario Brothers, which appealed to both old and new generations. Technology is driving the new markets, but Nintendo, Sony and Microsoft control the gaming market of today because of their ability to create affordable gaming while still being innovating.