WEEK 2 EOC:BOSTON CONSULTING GROUP-VIDEO GAMES

What is a Boston Consulting Group analysis? A BCG analysis is a chart that was created by Bruce Henderson for the Boston Consulting Group to help organizations with analyzing their business and product lines. This helps companies allocate resources. In a 2009 article in the Wall Street Journal titled Video Game Makers Can't Dodge the Recession the video game industry has fallen victim to the recession. How does this affect their BCG? Video games which were once considered to be stars in the industry are now turning into cash cows. The biggest video game markets for Christmas 2010 were Microsoft's Xbox Kinect and Playstation Move. Were the two industry leading giants able to break free from having the cash cow tag removed and were they able to move back to the star level on the BCG scale? It appears that they may have done so. Kinect sold 2.5 million sensors within the first month of release. According to the President of Microsoft Don Mattick " We are thrilled about the consumer response to Kinect and are working hard with our retail and manufacturing partners to expedite production and shipments of Kinect to restock shelves as fast as possible and to keep up with demand" (http://www.investorguide.com/article/7377/microsoft-msft-connects-to-consumers-with-kinect-but-can-it-connect-to-shareholders/) According to gameculture.com "November sales represent the best November on record in terms of new physical retail sales,"says NPD video game analyst Anita Frazier. "It bests November 2008 by roughly $30 million, and that time frame was at the height of the music-dance genre sales." (http://www.gameculture.com/2010/12/20/holidays-should-boost-game-sales) From another quote from itworld.com "We are thrilled about the consumer response to Kinect, and are working hard with our retail and manufacturing partners to expedite production and shipments of Kinect to restock shelves as fast as possible to keep up with the demand." (itworld.com) It appears that the industry has made a come back. I guess now the question is can the video game industry continue increased sales after the holiday season. In my opinion if the consoles sold at a rapid pace then there will be a large demand for the games that are played on these consoles. In spite of the Internet and free downloads of video games I think the industry may be back. At least for now!