driven the industry in the past. Product innovation and technological change were key. The fact that Nintendo lagged behind in introducing a 16-bit system has cost it 50% of the 16-bit market share and allowed SEGA to gain a firm foothold in the industry. Marking has also played a large part of video games sales. TV commercial & magazine ads helped boost sales for video games and created "hit" games. SEGA and Nintendo are the dominant companies in the fight for market share in the video game industry. In 1994, Nintendo's net sales were 4.7 billion and SEGA's net sales were 4.0 billion. Each of the companies had market shares of 45% of the video game industries. The other companies Atari, 3DO-based, and Philips CD-I has 1%, 7%, and 1% respectfully. Sony's playstation did not come out until 1995. Before 1996, SEGA and Nintendo had 90% of the market share of the video game industry, leaving little room for other companies. The introduction of next generation platforms changed all that. The six main companies; Nintendo, SEGA, ATARI, 3DO-based, Sony and Phillips reshuffled the market-shares to 37%, 27%, 2%, 21%, 10%, and 3% respectfully. Nintendo and SEGA were still the dominant powers, but 3DO and Sony took away large portions of market-share from the two industry leaders. The key factors that determine the competitive success or failure of a company in a marketplace are the particular strategy element, product attributes, resources, competencies, competitive capabilities, and business outcomes. Each company must have good technology, manufacturing, distribution, marketing skills and organizational capability. Technology in the video game industry is one of the most important factors. They need to always be on the cutting edge and never lag behind. SEGA introduced the Genesis, which was the first 16-bit system on the market, 18 months before Nintendo 16 bit Super ...
