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Xbox

In November 2001 Microsoft entered the hotly contested video games console market shared by Sony and Nintendo with it's Xbox console. In a market that has traditionally only been able to support 2 contenders, increased consumer demand driven by changes in technology and consumer behaviour has given Microsoft hope of muscling in on a highly lucrative market.

At the time of the Xbox's entry, the latest generation console market was already approaching the second stage of it's product life cycle. The "market growth" stage, where Sony whom previously had dominated it's duopoly with Nintendo and had already sold it's Playstation 2 console 20 million times over. Microsoft had a lot of catching up to do and it was riding on the technological superiority of it's console and a highly publicesed launch to be competitive. The entrance of the Xbox brought a worthy contender to Sony's dominance of the video game consoles market. The year of Xbox's entry into the market saw a flurry of price cutting and dealing by all players in their bid to maintain market share and at years end only did prices finally settle. In the course of a year where consoles once sold for more than $600 with nothing more than a controller, consumers can now purchase bundle packs that includes games, peripherals and even movie rentals for around $400. Only the quality of games can now determine the winner in the gaming market as producers are now selling consoles at a loss.

The video games console market is a very global one and video game producers have geographically segmented the global market in to four main markets. These are the United States, Japan, Europe and Australia. The United States is undoubtedly the biggest market for video games with Japan coming second. Microsoft has organised it's Xbox launch dates accordingly with the US coming first, followed by Japan, then Europe and Australia. All four are major markets for video game producers and a lot of money is spent in...