Welcome to the next generation gaming console battle of this years holiday shopping season. It’s Microsoft and Sony this time competing for the hearts and minds of gamers worldwide. And both companies use a variety of strategies and marketing tactics in attempt to attract more customers, increase market shares and ultimately become the center of your living room entertainment.
Microsoft’s latest gaming console Xbox One hit the shelves last Friday, on November 22. According to a recent press release from The Guardian, more than 1 million games consoles were bought in the first 24 hours of being on sale in 14 countries.
Let’s have a look at this short 2:40 min. video from ABC News and watch different families try the new video game systems. Which gaming console is right for you?
The big showdown between the PS 4 and Xbox One
Fierce competition between the high-tech consoles
The gaming industry is very competitive. The three main competitors are Nintendo, Xbox and Sony.
In order to gain more customers and stay ahead of each other, the 3 tech brands use strong marketing tactics and strategies:
First of all, they offer limited editions of their consoles. What is scarce becomes very attractive. A surprisingly powerful way to boost demand as consumers are drawn to scarce limited edition products.
Second, they immerse into special deals and offers. The 2 most common strategies game console manufacturers use are bundle deals and captive deals.
- Bundle deal: One brand may offer a game on top of the console you buy thus making sure they keep you away from the competition.
- Captive deal: New consoles aren’t compatible with your old games. For example, PS 4 will not play PS 3 games, and the Xbox One will not play Xbox 360 games. Game console companies make money on software (premium prices for new game releases) not hardware (the console itself).
Third, they set strategic price points based upon the life cycle of the product. When the new console is released manufacturers charge premium prices. Innovators are than the first to rush out and buy the product. As the console moves through the life cycle, the price is lowered until its lowest point. As soon as the console hits this point a new version is already waiting to be launched.
What’s your favorite video game system?
Whether you decide to buy the Xbox One or the PS 4, we’re still talking hundreds of dollars here. Currently, the PS 4 is $100 cheaper than the Xbox One ($499).
Both family-centric consoles have a ton of brand new features, better graphics and games to test. Which one are you going to buy and why?
Describe your favorite marketing tactics. Looking forward to your insights in the comments below.