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Video Games Console Prizing Puzzle in Microsoft and Sony

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case study
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  1. Introduction
  2. Industry
  3. Effect of the lifecycle for gaming and entertainment consoles on its pricing and profitability
  4. Pricing puzzle
  5. Analysis of the prizing puzzle
  6. Ways in which Microsoft (Xbox) and Sony (Playstation) make money in the video game industry

Entertainment is a big part of the developed countries economies. A greater part of the entertainment is mainly on the video games, software products, which exist solely for the amusement of the users. Video games can run on modern computer platforms but there are also dedicated machines that only run games. The machines are known as consoles (video games), and touches on various aspects of computer hardware and software development (Ellis 22).
This research paper will investigate the video game consoles (Xbox and Playstation) [Prices compared to their cost of production. In addition, the paper will cover ways in which Microsoft (Xbox) and Sony (Playstation) make money in the video game industry
The video game Entertainment and devices businesses are very competitive, having rapid product life cycles, frequent introduction of new game titles and new products. The industry is characterized by cyclic nature, network effects, and first-mover advantages. Competitors in this field vary from small companies to very large, diversified corporations with great amount of financial and marketing resources. Companies compete on the basis of timing of product releases, product quality and variety, marketing, and effectiveness of distribution.

The purchase of video game consoles depends on currency variety, game quality, expected future game variety, and the initial console price. The video game consoles business has competitors with console platforms from Microsoft, Sony and Nintendo who are large and have a large customer base. The lifecycle for gaming and entertainment consoles is about five to ten years. Microsoft released Xbox 360, the second generation console, in November 2005. Sony and Nintendo released their new versions of the video game console in late 2006.

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