"Pricing Games: Sony Playstation and Microsoft Xbox" and "The Walt Disney Compnay and Pixar Inc.: After reading, reaect on these two stories and how they relate to oligopolies and game theory.
Pricing Games: Sony Playstation and Microsoft Xbox: Summary
The home video game industry in the United States started in 1972 with the release of the first home television game console; Magnavox Odyssey. Though the game has no sound and no color, the sales grew from 100,000 in the first year to 350,000 units by 1975. As is characteristic of many industries, many major video game manufacturers entered the market and this brought competition into the home video game market. Since 1985, there has been great technology development in the production of home video games with the introduction of Nintendo cartridge- based format, followed by Sega’s CD-based console in 1995 and Sony CD-based PlayStation. Sony’s PlayStation was an instant hit selling over 1.5 million units within the first 14 months. Nintendo would follow suit releasing their Nintendo 64 cartridge console at a low $199 and sold more units on the first day than Sony sold in their first 13 weeks Ever since there has been fierce competition in the industry leading evolution of differentiated products with better technology at competitive prices. Early 2000s witnessed an influx of new-age consoles with the release of Sony’s PlayStation 2 and Microsoft Xbox each priced at $299. After several years of redesigning its console Microsoft released much-anticipated Xbox 360 in late 2005 while Sony introduced the PlayStation 3 (PS3) in November 2006. This marked the beginning of a period of fierce competition between Sony and Microsoft each engaging in different pricing strategies to gain control of the market share for their products.
The Walt Disney Compnay and Pixar Inc: Summary
Soon after Robert Iger took over as CEO of the Walt Disney Company in late 2005, he turned his attention toward Pixar, the animation studio with which Disney had worked since 1991 and was responsible for producing hits such as Toy Story and Finding Nemo. Disney's own animated film business had been in decline since Jeffrey Katzenberg left to establish rival studio Dreamworks and the business relied on revenue from its partnership with Pixar to maintain performance. With the Co- Production Agreement between the two studios coming to a close in 2006, Pixar was looking to negotiate better terms with another distribution partner. Could Disney risk losing them?