Analysis of relevant markets – Where we are? ...................................1
2.1 Amusement Center Operations .......................................................1
2.2 The Hardware Market ......................................................................2
2.2.1 Costs and profit ........................................................................2
2.2.2 Market mechanisms .................................................................3
2.2.3 Key success factors and why SEGA failed ...............................4
2.3 The software market ........................................................................5
2.3.1 Suppliers...................................................................................5
2.3.2 Substitutes................................................................................6
2.3.3 Complements ...........................................................................6
2.3.4 Potential entrants......................................................................6
2.3.5 Buyers ......................................................................................6
2.3.6 Rivalry amongst existing firms and SEGA’s position ................7
2.3.7 Key-Success-Factors................................................................9
3.
Possibilities of action .........................................................................10
3.1 Amusement Center Operations: Hold? ..........................................10
3.2 Hardware market: Return?.............................................................10
3.3 Software market: Developer and (Third Party-) Publisher? ...........10
4.
Strategic recommendations...............................................................10
4.1 Hardware market – Stay Away! .....................................................11
4.2 Amusement Machines – Hold! .......................................................11
4.3 Software – develop, let develop and publish! ................................11
4.3.1 Become a big developing Publisher! ......................................11
4.3.2 Online gaming is core competence! .......................................12
4.3.3 Main platforms, all regions!.....................................................12
4.3.4 Take care of your content! ......................................................12
4.3.5 Always have the development pipeline filled! .........................12
4.3.6 Blockbusters and special niches!............................................12
4.3.7 Think about a strategic investor!.............................................12
Next Steps.........................................................................................14
August 2002
Page 0
Case Study “Rivalry in Video Games”
All statements and conclusions are based on data, information and hints given in the
Case Study “Rivalry in Video Games”. It’s ‘August 2002:
1. Management Summary
SEGA hit the ground, standing on the ruins of their assets of their long lasting history in operating Amusement Center, developing & publishing game software and producing & providing platforms for videogames. So question arise, how to “survive and prosper”.
Analysis will show, that the new core playing field for SEGA is in games, the market for developing and publishing games for different platforms like
PS2, XBOX and perhaps even PC’s. Here it can show and realise relevant strengths like branding, know-how, publishing capabilities, well known game characters personal resources and so on.
A possible strategic direction is to become a big game publisher with high internal development skills and a special world-leading know-how in internet-based online games and
