stry. In 1994, Nintendos net sales were 4.7 billion and SEGAs 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 NES. The SEGA CD was released well before any competing system. SEGA has introduce its 32-bit system, Genesis 32X, a full year before similar system from Nintendo or SONY. So far, SEGA has been the first to come out with; in return Nintendo was forced to play catch up. With Nintendo the strategy was characterized by the industry as slow & steady wins the race The video game industry is attractive and there are above average profitability possible. There is tremendous industry growth potential. In 1994, the video game industry was a 15 billion-dollar industry worldwide. In 19...
