SWOT Analysis for Xbox One

SWOT Analysis for Xbox OneThe Xbox One is a video game console developed by Microsoft and launched on 21st May 2013. The Xbox One is the popular successor to the Xbox 360 and is the third console in the Xbox family. Below is a full SWOT analysis for the Xbox One.

Strengths:

  • Very large user base: Microsoft’s previous console, the Xbox 360, has sold almost 85 million units. Xbox is well known brand in the gaming industry so it is easier to introduce a new product to the market. There is lots of potential for the product.
  • Xbox Live: Microsoft first introduced Xbox Live in 2002. It was first console online service in the market. Many critics have stated that it’s still the best online experience in the console market. This is the service how Microsoft can differentiate from its competitors.

Weaknesses:

  • US-centric: Most Xbox One sales come from USA. The USA is a really big market area but it’s still too small market to get enough money to cover all the cost that designing and marketing new gaming device take. Also every new feature that comes to the Xbox One is firstly launched in USA. Maybe after year or so the same feature comes to the European market. There are 500 million consumers in the Europe so there is a really huge market opportunity to expand.

Opportunities:

  • China: After 14 years China removed their console ban and Xbox One had a first-mover advantage. They were first company that start selling video game consoles (Xbox One) after that ban. $13 billion Chinese gaming market has lot of future potential and first-mover advantage is really big opportunity to any gaming company. Microsoft also has some brand visibility in China due to their other non-gaming products.
  • Xbox Live: Xbox Live unite players all around the world. With this service Microsoft can also start selling games and other products directly to the customer. In the future they can change console markets and cut all middlemen and start providing different products only this way – digitally.

Threats:

  • PlayStation 4: PS4 is the major competitor for Xbox One. PS4 have same target group and they release similar games for their system. If PS4 wins majority of the market it is possible that game developers start to release games mainly on PS4 and gamers choose PS4 platform. It is really important to grow Xbox One install base at the beginning of the life cycle and beat PS4 in the major markets.
  • Game markets: Consoles are only one platform to play games on. More people are moving to play games with different devices like tablets and mobile phones. The change is already seen in handheld markets and it’s only a matter of time when people find cheaper and not so time consuming ways to play games.

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