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Unformatted text preview: egion. For video games to comprise of 15% market share in toys and games of a given
country, 60% of the population must earn incomes above US $15,000 (see figure x).
Business cycle-The sale of consumer electronics andnovelty products are influencedby macroeconomic
factors of a country. If there are recessionary or inflationary pressures, sales are likely to be affected
sincechanges in consumers behaviour is determined by the perceived increase or decrease in the level of
disposable income. This is, however, likely to have a short term impact and in the long run will have
negligible changes on the sales of video game consoles, as business cycles return to a favourable position
for higher consumer spending.
Demand elasticity- Video Game consoles have a price elastic demand (for a portion of the consumer
market) and combined with a high substitutability factors creates susceptibility to changes in competitor¶s
prices or quality hence impacting the size and share of the market for our product. Factors that change the
cross price elasticity of our product need to be considered and addressed.
Innovation R&D- Technology, particularly technological innovation is a critical factor in the video game
console market, and the leading competitors Microsoft, Sony, Nintendo have significant R&D invested in
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- Spring '11