Week two EOC: Boston Consulting Group - Video Games

The earliest video gaming system that I can remember was the Atari gaming system, which made it's debut in the 1970's and stayed strong through the 1980's.  Since then, many video game systems have come and gone from the shelves such as the Nintendo NES, Nintendo 64, Game Cube, and the Sega Genesis.  With the decline of video game systems, how long will the popular gaming systems like the Xbox 360 and the Playstation 3 maintain it's popularity with today's youth? The popularity of video game apps, such as Angry Birds and Words with Friends, why would parents continue to shell out $60 for games that are on the decline when they can download games for free.

"The gaming world has found itself teetering at the edge of a financial cliff. In the first eight months of this year retail sales of video games plummeted 20 percent in the United States. That followed a lackluster performance in 2011, when sales fell 8 percent. An analysis on the Web site Gamasutra this year said it was possible that 2012 would be the worst year for retail video game software and hardware sales since 2005." (http://www.nytimes.com/2012/10/07/arts/video-games/video-game-retail-sales-decline-despite-new-hits.html?pagewanted=all&_r=0). 

With the decline of the gaming systems within the last few years, tablets continue to prosper within the gaming communities.  More consumers are turning their backs on their much loved video game systems to purchase tablets such as the iPad and the Kindle Fire HD. 

"The Xbox 360 arrived in 2005 and the PlayStation 3 a year later in 2006. The technology inside each of those boxes is now at least six years old. And with price drops and budget bundles to come, these boxes are probably still at least two to three years away from official retirement. That’s a 10-year cycle, cradle to grave, an eternity in tech-dom. And unless Microsoft and Sony plan to iterate their next-gen consoles every couple years, we’re probably talking another 10-year attempt. Tablets, by contrast, are turning up with better, faster internal components on average of once a year. The iPad, which launched the tablet revolution barely two years ago in April 2010, has since iterated through three generations, each dramatically more capable than the last. Does anyone expect that pace to slow?" (http://techland.time.com/2012/08/09/are-tablets-like-the-ipad-poised-to-dethrone-game-consoles/).

If I was conduct a Boston Consultant Group (BCG) analysis of the video game systems that are currently popular, the gaming systems would go into four different categories:  Cash cow, dog, question mark, and a star.    The Xbox 360 and Playstation 3, I would put into the cash cow category, because I feel that there isn't many more changes and upgrades that can be made, for consumers to continue to shell out $500+ to upgrade to their newer gaming systems that are released in the future.  The Nintendo 3DS, I feel is a question mark because although I don't feel like they are going out the door yet.  Tablets and mobile gaming apps are definitely in the star category. The Nintendo Wii (which is my favorite) is in the dog category, the Wii which has lost it's luster with consumers, soon will be a thing of the past because gaming stores, such as Gamestop, will discontinue it's sales within their stores due to a decrease in sales.

"It’s no secret that the media wants consoles to die so that tablets can take their place as…what, exactly? The new leaders of lackluster gaming? Nintendo is eager to help them, it seems. Instead of fighting like a champion against the toughest of competitors, and instead of reminding consumers why console gaming is and should always be a cherished form of entertainment, Nintendo has done nothing to ensure the success of its next game machine. Rather, the Mario maker has done the opposite."(http://www.forbes.com/sites/benzingainsights/2012/06/06/nintendos-disappointing-wii-u-showing-will-lead-to-the-demise-of-console-gaming/)

With technology continuing to evolve, and gaming systems coming and going. How long before another electronic device dethrones the much loved tablets?  It's amazing that in 10 years, tablets could be just another "Atari" of the past.