A microeconomic analysis of the competition in the home console videogame industry

Abstract

The $70 billion and 40 year old [83] traditional videogame industry is a fascinating example of intense and dynamic competition, where over eight generations new players could enter the market and reach the leadership while old leaders were pushed out of the market. The fierce competition has been pushing all the manufacturers and game developers to the constant cutting-edge innovation to keep themselves in the market even sometimes literally paying to be there. This work will focus on reviewing the competition in the eight videogame consoles generations, analyzing the seventh generation results from the console and game sales and understanding the factors that influence the competition. For supporting the analysis, this study will use a Microeconomics Dynamic Model for Platform Competition on the current generation market data.