Nearly fifty years old, the video gaming is a $180 billion dollar industry globally dominated by three main competitors: Sony, Nintendo, and Microsoft. Over the years these competitors have released system after system aimed at the same hard-core gaming market of boys and young men. The pace of competition has intensified in this industry. Game console manufacturers have stepped up the frequency with which they introduce new consoles that take advantage of newer technology such as memory, chipsets, and networked computing. In the first fifteen years following the 1972 introduction of the first console game system, 6 major new consoles were introduced by a handful of competitors. But in the last fifteen years, 14 new consoles have come out as the industry moved from 4th to 8th generation platforms using more advanced technology. The three major competitors each jockey for the privileged position of coming to market first and trying to lock in consumers. In 2012 Nintendo led with its Wii U, then Microsofy and Sony followed in 2014 with their new Xbox One and PS4 upgraded systems. In 2016 Nintendo's partner companies introduced the new Pokemon Go mobile game app, downloaded over 15 million times worldwide in the first few days. In 2017 Nintendo again led first by introducing Switch, the fastest selling platform of all time in the U.S. That year Microsoft brought out the Xbox One S and X platforms. In 2020 Sony's updated PS5 platform came out. Within a few days Microsoft also released the Xbox Series upgrades. Game on! Each generation of platform pushes the technology envelope in its updated hardware. The Switch married tabletop and mobile capabilities, connected with other mobile devices, and employed controllers that simulated Wii gaming. Microsoft's Xbox One X built in native 4K HDR gaming with triple the graphics core speeds, a built-in Blu-ray player and huge terabyte memory to handle large games. PS5 and Xbox Series consoles have enhanced graphics processing, but cheaper models come with no hard drive since they can now rely on cloud computing. The competitive focus in the industry is also on the suppliers of game software. History shows having robust software development is crucial for a console to be successful. Strong software sales encourages publishers and developers to release new games for the console. A highly successful console launch can net hundreds of millions for the successful video game producer. And so when competitors introduce new game consoles, they also introduce new games to take advantage of the technology. Accompanying Nintendo's Switch were new versions of classic Nintendo titles loved by millions: Super Mario Odyssey, Zelda, Mario Kart 8, Sonic Forces. With the XBox One X came favorites such as Halo 5 and Star Wars Battlefront. In 2022 Microsoft announced it will acquire Activision Blizzard, a leading game developer. QUESTIONS 1. How can any of these companies predict what its competitors will do next, and when? 2. How should Sony and Microsoft respond to the advent of mobile games? 3. How should Sony respond to Microsoft's acquisition of Activision Blizzand? A Galaxy Far From Google 2 Samsung introduced its Galaxy phone in 2009. The phone utilized the Android operating system, which was developed by Google. By the end of 2012 Samsung had the leading worldwide market share of smart phone unit sales, with a 30% share compared to only 19% for Apple's popular iPhone. In 2013 Samsung introduced its S4 smart phone, but significantly downplayed its involvement with Google and its reliance on the Android operating system. The Android "ecosystem" is similar to the PC ecosystem, which combined Windows and Intel chips into what was known as the "Wintel" standard. Samsung needed the system. So it cooperated with Google in the development of its phones, in order to ensure that the hardware and OS software were compatible. But Samsung did not want to rely exclusively on Google, so it developed its own apps in a way that reinforced Android but provided competitive product benefits for its users. Cooperation presents an interesting dilemma for both parties. Google developed Android as an alternative to Apple's iOS systems. They were right: by 2022 over 70% of devices shipped relied on a version of Android. But Samsung is the 500-pound canary, leading in worldwide unit sales and the largest user of an Android OS. Google worried that Samsung would eventually develop its own version of Android relying much less on bther Google services like maps and search. This is what Amazon had done with its Android-powered Kindle Fire. So in 2012 Google acquired the cell phone division of Motorola, solidifying patents and an installed base of its phones that utilized Android. Then in 2014 Google sold the Motorola phone business to Lenovo, and it worked with other manufacturers to create its own Google-branded Pixel phones which were introduced in 2016. Google's efforts over the years have helped establish a balance among competing manufacturers and mobile operating systems. QUESTIONS 1. What are the benefits and risks of cooperation? 2. Why would Google play one company off another and seek "balance" in this industry