VIDEO GAME INDUSTRY

The Home Video Game Industry: Atary Pong to the Nintendo Wii C35

Table of Contents

Video Game Industry1

The Home Video Game Industry: Atary Pong to the Nintendo Wii C351

History and Development of the Company3

Internal Strengths and Weaknesses6

Strengths6

Weaknesses6

External Environment6

SWOT Analysis7

Corporate Strategy8

Business Strategy8

Company Structure and Control System8

Recommendations8

References9

The Home Video Game Industry: Atary Pong to the Nintendo Wii C35

History and Development of the Company

In 1968, Nolan Bushnell developed a simple space war game with integrated circuits with a 19-inch black and white screen. It was an advanced and simple version of the game developed by Steve Russell. The features that distinguished the game developed by Bushnell with other games were that they were simple to use, less costly and used only for computer games.

Bushnell loved to design latest video games and wanted to take it professionally, for that purpose he joined a small pinball company that manufactured 1,500 copies of video games but due to the complex instructions, the games did not become a hit. The games were hardly purchased by the customers. In this context, Bushnell left the company and introduced his own new video game which started immediately; it was easy to use and could be played with a single hand. A table tennis based games which could be batted with a ball back and forth with paddles that could be moved up and down sides. He named the game “Pong”, the game became a massive hit and around 10 games were sold daily. Valentine provided Bushnell capital to expand the business and production who was impressed with the growth of Atari game (Bushnell company name).

Till 1974, a total of 100,000 Pong-Like games had been sold worldwide, although Atari sold only 10% of these games but still earned $3.2 million in the specified year. Atari's pong was a better product than Magnavox's game in terms of picture quality and cost but still it did not get much recognition hence Bushnell thought of other options to succeed. In 1976, Bushnell sold the Atari to Warner communication for $28 million and kept on running Atari. With Warner Communication support and financial assistance Bushnell developed cartridge-based system known as Atari 2600. The cost of associated articles was in a range of $25 to $35. By 1977 Christmas season; Atari sold 400,000 units of 2600 VCA in which 50% of them were cartridge based (Hill, 1984).

The year 1978 brought a significant decline in sales of the whole industry only Atari and Coleco survived this downturn. Atari was taken over by Warner Communication Executives and Bushnell left the company due to a disagreement on a strategic decision.

In 1979, the sales of the industry recovered and in 1982 it surged to $ 3 Billion. Atari dominated almost half of the industry with significant sales. But the recovery in sales was temporary as the sales fell to a very low level of $ 100 million in the year 1983 and this decline in sales was attributed to the fact that huge inventory remained ...