Abstract

US based Microsoft, a major software developer, entered into the gaming industry by launching Xbox in 2001. Microsoft was the first American company to manufacture gaming consoles. By entering the market, the company intended to move ahead of companies like Nintendo and Sony, which had a strong presence in the gaming consoles market. However, Xbox performed below expectations, while Sony’s PlayStation 2 gaming console gained significant share in the market. To compete with Sony successfully, Microsoft planned to launch the next version of Xbox, well ahead of Sony’s PlayStation 3. The new version of Xbox, called Xbox 360, was launched in November 2005. Xbox 360 received rave reviews for its additional features like Media Center, photo archive, music download, and Internet access and for its sleek design. With the subsequent launch of PlayStation 3 and Nintendo Wii, industry experts felt that Xbox 360 would face major competition in the near future.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Examine the reasons for the unsuccessful launch of Xbox
• Understand the importance of product development strategies in the successful launch of a product
• Critically evaluate the features of Xbox 360
• Study Xbox 360’s convergence features
• and Analyze the status and future prospects of the global gaming console industry.

Keywords

Microsoft Corporation, Xbox , Xbox 360, Product Development, US Gaming Console Industry, Design of Xbox 360, Convergence Features, Product Launch, Console Lifecycle, Sony PlayStation 2, Nintendo Wii