Mr.
...including hardware and games, was worth between $15billion and $20billion worldwide in 2000. North America, Europe and Japan are the three most important markets for home videogames.
It is the games, which drive console sales. The variety and quality of games available for a console are the key purchase criteria for console buyers .
The industry is also characterized by a generational nature. Every generation has its cycle, and when it is over, another generation arrives to replace the old one. In each generation, consoles are introduced to compete against each other, and in general most of them have the same technical capacities. Once new technology comes up, it is a new generation and companies offer new machines and compete again every four to five years. The tradition in the industry is that the generations are classified according to the improvement in Bits. Although this does not always mean superior technology, it has become the criterion to characterize different generations.
The market size has more than tripled over the last ten years. The overall market declined by about 5% in 2000, following rapid growth from 1996 to 1999, when it grew more than twice as fast as the market for movies or music (See Chart 4). Growth subsequently declined due to Sony and Nintendo’s product transition to the fourth generation.
3.2 Brief history
The videogames began in arcade forms, specifically with Atari whose Pong arcade game was so successful that it was adopted the home videogames in 1975. Atari dominated the industry until 1981. The story of Atari’s rise and fall is often told as a tragedy. Atari did not know how to control the market; a flood of bad games software for its machine led to its downfall as people became less and less interested.
3.2.1 The First generation: 8-bit
From 1981 to 1984, the industry suffered a crash but everything...
View Full Essay
