NINTENDO: COULD THE SWITCH TURN ON GAMERS? The Nintendo Switch is a gaming console that comes with a pair of new and innovative controllers called Joy-Con Controllers, a bybrid of an attachable game pad and a controller that could be used separately for multiplayer game play. When it was introduced in 2017, Nintendo's management was highly optimistic about the Switch, and Nintendo believed that it could sell about 10 million units of Switch consoles within a year after the launch." As of January 2019, Nintendo's latest gaming console Nintendo Switch had exceeded 32 million units sold, and software sales for the console had reached 163,61 million units, A pair of Joy-Cons was included in the $299.99 price tag of the Switch console. The Joy-Con came in two color options for customers to choose from, one grey and red/blue and the other grey and black. A more innovative feature in the new gaming console was that it could be transformed into a 6.2-inch high definition on the go gaming screen if a user decided to move away from the TV. The Switch console also marked the release of Nintendo Switch's very first epic game called "The Legend of Zelda: Breadth of the Wild," which could be played both on Switch and Wil U consoles for a price of $59.99. Nintendo of America's COO and president, Reggie Fills Aime, said, "Nintendo Switch makes it casy for anyone to enjoy their games in the living room and then quickly take them on the go."" The new gaming console design meant that console-gaming was not only limited to one stationary TV anymore and could be experienced anywhere anytime. The launch of Nintendo's Switch caught the attention of convomen and mostly received a positive response, but apparently the news did not impress the investors, leaving the company's stock tumbling. This may have reflected concerns regarding the battery life of the portable console, its price, and third-party support. Nevertheless, a flood of customer orders led to stock shortages in stores like GameStop and Toys R Us. among others. Addressing the stock shortage. Reggie Fils-Aime said. "our focus is making sure that the consumer who wants to buy a Nintendo Switch can buy a Nintendo Switch."The initial plan had been to ship 2 million consoles. Nintendo decided to double the production to deal with the shortage and meet the strong demand. The stocks had surged high by mid-2018, a year after Nintendo Switch's launch. According to The Wall Street Joumal, to meet demand for one year out (ending April 2018), the company's management decided to manufacture 16 million Switch comoley-double the yearly quantity of 8 million units, Nintendo's traditional production target." One of the key topics of discussion in the popular press was whether or not the Switch console defined the "next generation" of gaming. This echoed similar press concerns after the launch of Nintendo's previous console, the Wii U. Prior to the launch of the Switch, it's predecessor the Nintendo Wii U console had been on the market for only a short while, with the addition of innovative controls and new game titles. Then there had been uncertainty among industry experts, such as Gabrielle Shraper of Ubisoft and Mikael Haveri of Frozenbyte. as to whether or not the improved power and new controller interface justified that system's being considered a "new" generation." The Wii U initially was launched with 50 available games and a new controller interface. termed the GamePad, While the GamePad offered a new take on the Wil's controls, the new console was still compatible with the same motion sensing controllers of the original Wii. However, the Wii U console was not sold with these controllers included. Instead. it came with just one of the new GamePads. Incorporating traits from tablet devices, the Game Pad integrated both traditional input methods such as buttons, dual analog sticks, and a D-pad (directional pad) and a touchscreen. The touchscreen could be used to supplement a game by providing alternative functionality or an alternative view of a scenario in a game. With the OfI-TV Play function, the screen could also be used to play a game strictly on the GamePad screen, without the use of a television display at all. With the Wil U comoke turned on, the GamePed could be used to display the same picture on its screen as would be seen using a TV display. There were the nongaming functions, such as the ability to use the GamePad as a television remote. While Nintendo was the first of the competitors to release its new gaming console. there was no doubt that both Sony's PlayStation and Microsoft's Xbox would be close behind in releasing their own upgraded systems. Although Nintendo is slightly behind in comparison to competitor, the company saw a significant improvement in its pet wiles ifter Nintendo Switch (sec ( Exhibits I and (9 1).Google Stadia Google Stadia is looming on the paming horizon, and not just on mobile phones. After its announcement in the Game Developers Conference 2019, a lot of gamers are anticipating its arrival. Stadia could be great for gamers who cannot afford the latest hardware. One of the features of Stadia is that it will let players view a game clip from the creator on Youtube and then hit "play now" to instantly stream a playable version of the title to any device that can run a Chrome browser. Google says it expects to support up to 4k at 60 fps at launch over an Internet connection with around 30Mops of bandwidth, and it is planning to support up to 8K resolutions and 120 fps in the future."" To power all of this cloud streaming. Google is leveraging its global infrastructure of data centers to ensure servers are as close to players around the world as possible-a key part of Stadia, as lower latency is a necessity to stream games effectively across the Internet. "If it catches on, Stadia could be a significant player in gaming The Future of Switch While Sorry and Microsoft envision long-term profits on software sales for Play Station 4 and Xbox One. both companies caperience losses producing their consoles. Among the three rivals, Nintendo is the only one carning a significant profit margin on each Switch unit sold. Sony's and Microsoft's gaming consoles are commonly thought of as superior to Nintendo's, however. perhaps the Switch's smaller processing unit and hardware but simplicity and family-friendly appeal have assisted it to become profitable. These traits altract not only end users but game developers as well, allowing the Nintendo to have the largest selection of games compared with its competitors. Although there was not enough data about the number of games for Switch at the time of writing this case, historically, the number of its games indicated that Switch's predecessor Wii was obviously a successful system one that has drawn a good amount of interest from game developers and gamers around the world, Microsoft and Sony have started to invade the casual family-user market, a key market for Nintendo, expanding beyond their former customer base of mainly hardcore gamers. The Xbox and PS4 are becoming more like entertainment hubs for families. Now, with the Switch on the market, and introductions from competitors expected soon, the competition seems to be beller positioned to combat Nintendo. As motion-sensing gaming the undisputed next best thing to come out of the gaming industry is a capability that all competitors now possess, it is a matter of whose system is most desirable to the gaming population, and whether or not sales volume solely will determine which system comes out on top. With similar technology being widespread across the industry. it may prove to be more difficult for Nintendo to set itself apart and portray itself as the family favorite, as it did in its early days of the Will. But the three rivals have another competition-Google. With Stadia, Google has placed itself against the industry's largest players: Microsoft, Sony, and Nintendo. While unveiling the service, Google CEO Sundar Pichai said, "We are starting our next big challenge: building a game platform for everyone. I think we can change the game by bringing together the power and creativity of the entire community. people who love to play games. people who love to watch games, and people who love to build games. "- Sony's CEO Kenichiro Yoshida and Xbox boss Phil Spencer have said that both companies are working on hardware for the future, which many believe will be released next year. But does Nintendo have to worry about the new competition yet? There is some concern for Nintendo with high competition in the market. Nintendo is known to be a unique brand with games that are limited to its platform. Its Mario and Zelda fans might not be incentivized easily to switch to multiple devices In February 2019. Nintendo Switch outsold Xbox One and P54. and generated its highest February-month hardware dollar sales since February 201 1. " Having sold up to 32.27 million units by December 2018. Nintendo said that they expect there are still plenty of people who have played Nintendo games in the past but have not yet purchased Nintendo Switch. " Will Nintendo be able to communicate the appeal of Nintendo Switch to consumers? or Is Nintendo counting on power of nostalgia to maintain its consumer base?EXHIBIT i income Statement Year Ended March 31 2019 Millions of |Millions of [Millions of Yen dollars] Net sales 1.055.602 1,200.340 109 Cost of sales 652.141 699.370 6.357 Gross profit 403,540 501,189 4556 Soling, general and administrative cuporeos 225,983 251488 2 786 Oporing income 127 557 249701 2,270 Non-operating income Interest income 9064 Forpign Exchange gains snare of profit of entries accounted for wang equcy mathod 4126 Tolal non-operating Income 23,509 28,315 253 Non-operating expenses Sales discount Foreign exchange losses 760 Loss on redemption of securities 140 150 221 Totel non-operating expenses 1710 Ordinary income 199.356 277353 2.521 Gain on sales of non-current meets 321 1 Gain on sales of investment securities 490 Reversal of loss on logation 1929 Total extraordinary incong 5,240 Impairment 1036 1612 42 Loss on disposal of non-cumrent ascot 356 278 Loss on sales of iestnam securties 2 Loss on valuation of vestment securties Loss on ligation Totel extraordinary losses 1507 5.504 Profit before Income taxes 201090 271772 2.470 Income taxes . current 56.977 88 07 801 Income taxes . deferred 3.107 (10.9021 Total Income taxes GO.14 77.204 701 Profit 140945 194.568 L768 Profit attributable to non.controlling interests 1354 Profit attributable to owners of parent 139,590 194009 1,763 "I USD - 112.3095 JPY is of March 1. H Source: Financial Morning Ster.EXHIBIT 2 Balance Sheet Year Ended March 31 2018 2019 Millions of (Millions of IMillions of yenj dollars 1 Assets Current 23505 Cash and deposits 744 595 844,550 7677 Notes and accounts receivable - trade 69 829 78,109 710 Securities 243,431 238,410 2.167 Inventories 141795 135,470 1231 Other 66.405 48.453 4:40 Allowance for doubtful accounts (87) (0) Total current assets 1205.929 1344,972 12 227 Non-current assets Property, plant and equipment Buildings and structures, net 36.094 37.592 341 Machinery, equipment and vehicles, net 1450 1,575 14 Tools, furniture and fixtures, net 3.915 4.015 Land 41.812 38,223 347 Construction in progress Total property, plant and equipment 83.926 81,550 741 Intangible assets Software 1487 1.952 108 Other 2.533 2,17 8 Total Intangible assets 14.020 14,090 Investments and other assets investment securities 198.538 167134 1519 Deferred tax assets 37.094 57,932 527 Net defined benefit asset 7931 7.056 54 Other 15.503 17.535 159 Allowance for doubtful accounts 130) 10) Total Investments and other assets 259.037 249,690 2 269 Total non-current assets 350,984 345,331 3,139 Total assets 1633,748 1690.304 15,366Liabilities Current liabilities Notes and accounts payable - trade 138.015 59.689 542 Income taxes payable 43.390 52.6-46 Provision for bonuses 3.217 3.891 35 Other 28.457 118.781 1079 Total current abilities 278,076 245009 2.227 Non- current Mabellities Net defined benefit liability 16.609 15 068 Other 13 487 15.427 140 Total non-current Babies 32,097 30/490 217 Total liabilities 310.173 275 509 2,504 Net assets Shareholders equity Capital Stock 10,065 10 065 Capital surplus 13742 12.069 109 Retained eamings 1,564.240 1.556.881 14.153 Treasury shares (250.672) (1567557 (1475) Total shareholders equity 69EZEEL 1427 260 17.929 Accumulated other comprehensive Income Valuation difference on available for sale 16,402 17.665 160 securities Foreign currency translation adjustment (34,736) (30.2141 (274) Total accumulated other comprehensive (18.334) (12,548) (114) Income Non-controlling Interests 4.540 5.086 Total net assets ILS EZEL 1,414 798 12,861 Total liabillies and net assets 1633,748 1,690 304 15,306 #I USD - 112 1095 JPY as of March 31, 2019 Source: Nintendo Annual Report 2018.Background Although Nintendo dated back to 1839 as a playing-card maker, Nintendo's first video-game systems were developed in 1979 and known as TV Game 15 and TV Game 6.' In 1930, Nintendo developed the first portable LCD video game with a microprocessor. In 1985, Nintendo created the Nintendo Entertainment System (NES), an &-bit video game console. The original NES was very successful, as its graphics were superior to any home-based console available at the time. As a result, more than 60 million units were sold worldwide."The NES set the bar for subsequent consoles in platform design, as well as for accepting games that were manufactured by third-party developers. When competitors began developing 16-bit devices, such as Sega's Genesis system and NEC's PC Engine, Nintendo responded with its own 16-bit system. the Super Nintendo Entertainment System (SNES). The Super Nintendo was released in 1991 and. when purchased, came with one game-Super Mario World. In 1996. Nintendo released Nintendo 64. The Nintendo 64 was the company's third generation video game console and was named after the 64-bit processor. During its product lifetime, more than 30 million Nintendo 64 units were sold worldwide." The Nintendo 64. like its predecessors, used cartridges to play its games, but at the time the competing sony and Sega C 160 systems were using CDs for parte storage. Cartridges could store of megabytes of data, while CDs could store around 700 niegabyies. Also, CDs were much cheaper to manufacture, distribute, and create; the average cost of producing a Nintendo 64 cartridge was $25, compared to IO cents to produce a CDD. Game producers passed the higher expense to the consumer, which explained why Nintendo fid games tended to sell for higher prices than Sony PlayStation games. While most Sony PlayStation games rarely exceeded $50, Nintendo 64 titles could reach $70. To increase profits and to take advantage of the programming possibilities of the larger storage space. many third-party game developers that had traditionally supported Nintendo platforms began creating games for systems that used a CDD platform (such as the Play Station), In 2001, Nintendo released its GameCube, which was part of the sixth-generation cra of video game systems. These systems included Sony's PlayStation 2, Microsoft's Xbox, and Sega's Dreamcast. Although the GameCube did not use cartridges, Nintendo began producing its games using a proprietary optical disk technology. This technology. while similar in appearance to CDs, was actually smaller in diameter and could not be played using a standard CD player. When Nintendo released the Wii video game console in 2006. it was already in the midst of a very competitive market. The previous generation of video game consoles consisted of the Sega Dreamcast, Sony Playstation 2. Nintendo GameCube, and Microsoft Xbox. These systems were all released between 1999 and 2001 in the United States, and although the Game Cube sold more systems than did the Sega Dreamcast, it fell into third place behind the PlayStation 2 and the Xbox. The PlayStation 2 sold more than 115 million units worldwide, more than twice the combined unit sales of the GameCube and Xbox (21 million and 24 million, respectively ). By 2019. Nintendo had gone beyond its Nintendo DS and Wil U, and was banking on Nintendo Switch to beat the competition. But it was accompanied by rumors of a Play Station 5 that was set to release in 2021. In May 2015. Sony Interactive Entertainment CEO John Kodera told reporters, "We will use the next three years to prepare the next step, to crouch down so that we can jump higher into the future." This came shortly after he remarked that the P54 was entering the "final phase of its life cycle." The Term Wii In 2006. Nintendo released its direct successor to the GameCube. the Will (pronounced "we' ). There were many reason cited as to why' the name W/ was chosen, but perhaps the most compelling reason was that ""Wil' sounded like 'we." which emphasized that the console was for everyone. Wii could be remembered casily by people around the world, no matter what language they spoke. No confusion." "Initially the system was known by its code name, Revolution, but later the name was changed to Wii. Nintendo stated that it wanted to make the Wii a system that would make anyone who tried it talk to his or her friends and neighbors about it The Making of the Remote The original Wii was created to establish a new standard in game control, using an innovative and unprecedented interface, the Wii Remote. The Wii Remote was what made the Wii unique. The remote acted as the primary controller for the Wii. Its motion sensor capabilities allowed the user to interact with and manipulate objects on the screen by moving and pointing the remote in various directions. The Wii Remote was the size of a traditional remote control, and it was "limited only by the game designer's imagination." " For example, in a game of tennis it served as the racket when the user swung his or her arm. while in a shooting game it served as the user's gun. Not only did the remote serve as a controller, but it also had a built-in speaker and a rumble feature for even greater tactile feedback and game involvement. ! Exhibit 3 shows the Wil and Wil Remote.Nintendo Switch Features Nintendo Switch came with a portable game console with a built-in screen, a pair of Joy Con controllers, Joy-Con Straps, a Joy- Con grip, and a Nintendo Switch dock. The controllers' straps were detachable from the grip to be used with the portable screen to turn the Switch into a portable video game. The 6.inch detachable screen console came with a standard USB plug for charging. Along with the traditional method of playing games by using buttons, the Joy-Cons could also be used for motion- sensitive games just like their predecessors, Nintendo also offered an additional controller called Nintendo Switch ProController, which could be bought separately at a price of $69.9%: it had the same features as Joy-Con. but looked like a traditional gaming controller. This was not the first time Nintendo had surprised the market with such a new design. For instance. the company had done it in the past when it introduced motion-sensitive controllers. However, this time. in a way. Nintendo had combined the GamePad controller with the Wii U console to design the Switch. Gamers could play games by attaching the Nintendo Switch dock with the TV or could convert it into a portable handheld game by attaching the controller straps with the 6.1 inch high- definition screen (720p), which also included a kickstand to be placed on a flat surface and multi-touch features for various compatible games to enhance the gaming experience. The gamers could also take a screenshot of the game they played using a capture button on the left Joy-Com, which users could then share with their friends or put on social media. Similar to the past Nintendo controllers. both Joy-Cons included the motion controls (see Exhibit 5). EXHIBIT 5 Switch Console and Joy-Con Controller SWITCH Dmitry Leahkin/23RF Switch supported the Nintendo eShop. an online game store that could be used to download games from different publishers and developers. Switch also supported the games by third-party publishers including Electronic Arts, Activision, and Ubisoft, among others. The user interface of the Switch software was a UI design. The home screen displayed several different icons, including icons for featured games, settings, controllers, albums (screenshots, videos), Nintendo cShop, and options. Users could make different player profiles to sign in to maintain exclusive game progress similar to what most people do using their personal computers. The top right corner of the screen showed battery status along with the time. Prior to Nintendo Switch, the company had introduced Amiibo figurines that depicted popular Nintendo characters, and each contained a wireless antenna and flash memory. They allowed consumers to include digital versions of their favorite characters in compatible video games. Nintendo's first round of Amiibo characters were Mario, Peach, Yoshi, Donkey Kong. Link, Fox, Samus, Wii Fit Trainer, Villages, Pikachu. Kirby, and Marth. By 2019, the company had introduced a number of new games for Nintendo Switch including The Legend of Zelda: Breadth of the Wild, Super Mario Maker 2, Pokemon Quest, and a few others. In March 1019, it released the updated version of its latest game, Yoshi's Crafted World In the past. Nintendo had hoped to penetrate the segment and boost sales of its Wi U console and 3DS handheld in the C 162 process. However. In 2017. the company combined both Wil U console and 3DS into a single gaming platform that was Nintendo Switch. The results for the fiscal year ended December 31. 2018 show a very positive trend in global hardware sales for Nintendo Switch, which sold a total of 32.27 million units during this fiscal year.Demographics According to Nintendo, one of the key differences between the Switch and competitors' systems was the broad audience that the Switch targeted. Many of the Switch games could be played by people of all ages and experience, and the Switch's Joy-Cons were casicr to use than the complicated controllers of the Sony Play Station 4 or Microsoft's Xbox One. Nintendo's TV commercials for the Switch showed people playing the Switch at home by connecting the game console to TV and outdoors by connecting the Joy- Cons with the portable screen. According to the company. the Switch offered something for both the advanced gamer and the person who had never played a video game before. The advanced gamer would enjoy the remote's unique features, whereas the nowice gomer could use the remote as his or her hand and would not need elaborate instructions on how to play a new game straight out of the box. Although the Nintendo games were easily played by a greater range of ages and featured improved graphics, the company's competitors Xbox and Sony were offering 4K resolutions, best in the market at the time. While Nintendo hoped to target people of all ages, it had long been soon as a system that made video games for children, as evident from its Mario, Zelda, and Donkey Kong series. However, despite the limitation of this reputation, the innovation and uniqueness of its game play were enough to lure the masses, and sales were excellent. Success, of course. bred competition. Upon seeing the success of the movement-sensing Switch. Microsoft and Sorry moved quickly to release competing systems. Microsoft released its Kinect for the Xbox, while Sony released the Move for the PlayStation. Both the Move and Kinect used camera systems for their motion detectors, but in different ways. Move's camera sensed the movement of the light-up Move controller, whereas Microsoft's Kinect sensor tracked skeletal motion, eliminating the need for a controller. " While it was inevitable that gamers would have their favorite of the bunch, the relevant point was that it didn't take long for Microsoft and Sony to catch up to Nintendo. They moved forward to the new generation(s) of gaming quickly. maintaining an even playing field among competitors for gamer interaction and motion detection. In the Game Developers Conference (GDC) 2019, Nintendo, along with its other competitors, witnessed another player in the market-Google. Google unveiled Stadia, a cloud gaming service that streams games from the cloud to all types of devices including the Chrome browser. Chromecast, and pixel devices. Gaining the Interest of Game Developers As evident from the history of game consoles, game developers had tried to make games more and more complex with each new generation of systems. This meant that more money was invested in the production of each subsequent generation of games. Because game developers were spending more money on developing games, they were at great financial risk if games did not succeed. Thus, many developers felt more secure in simply creating sequels to existing games, which restrained innovation. The Switch's innovative controller, the Joy-Cons, now required a rethinking and reengineering of the human interface by game developers and programmers. Another issue with developing games for the Switch was that its graphics were not quite as good as those of the Playstation 4 and Xbox One. and therefore game developers had to be more creative and develop special Switch editions of their games. Many game developers used virtual-machine software in developing new games. It was believed that game developers could develop games for the Switch and then make them for other platforms on the basis of the same programming, thereby reducing production costs. However, while the Jay Can distinguished itself from its competitors, it created a hurdle for developers. When developers created a game for the PlayStation, they could create the same game for the Xbox and vice versa. When developers created a cante for the Switch, however, it required significant rework to deploy the title for the other platforms. Converting a title from the Xbox or Playstation also required significant work to modify the game to incorporate code for the Joy-Con's special features. While this uniqueness had served Nintendo well in the past. the Joy-Con's incompatibility with the likes of Microsoft and Sorry limited the selection of games immediately available to the Nintendo Switch's audience. The selection of games had to be fulfilling enough to keep Nintendo's audience happy. without leaving them feeling like they were missing out on games available only on the other platforms. The Competition If the launch of Nintendo's Switch was a foray into the fierce competition among such existing models as Xbox One and PS4. Switch's competitors were offering many features that Nintendo did not. The price of $299 for the basic Switch included a portable game console with a bulk-in screen, a pair of Joy-Con controllers. Joy-Con Straps. a Joy-Con grip, and a Nintendo Switch dock. The price of the PlayStation 4 was also $299 (300 GB edition). and the new Xbox One was $219. At a base price of $299 the Switch was intended to compete with the upper echelon of the next generation of gaming consoles unlike the low-cost position of the original Whi. Apart from pricing, there were many differences among the performance specifications of Switch in comparison to its fiercest competitors ( for examples, soc Ll Exhibits 6 and ( J)C ISE EXHIBIT & Game Systems Comparison, 2019 Feature xbox One P54 CPU: Cores Ix ARM Cortex A57 8x AND Jaguar Ex AND Jaguar OUT Clock speed 1020MHI 1.750MH? 1.600VH7 CPU: Cores 256 Nvidia CUDA 768x AMD Shaders 1152 AMD shaders CPV. Docked speed 708MHE 853MHZ 50OMHE CPU: Undocked speed 307.2MHz NA NIA HDR No Yes (One 5) Memory 8GB Storage 32GB flash [microSD-expandable) 500GB HDD SOOGB HIDD Physical game formats Game Card USB ports 2x USB2, 1x US83.0 3x USB 3.0 2x USB 3.1 (gant) Video output HDMI HOMI HDMI (HDR supported Audio ports None Optical Optical Networking ports None Gigabit Ethernet Gigabit Ethemet Power consumpoor UitTown Source: Passingham, Michael, Nintendo Switch vs Xbox One and P54 - How do they compare? Trusted Reviews, December 12. 2015. EXHIBIT 7 Game Controllers Comparison, 2019 Feature Joy-Con pair Switch Pro Xbox One P54 P34 Move pair Control buttons 18 touchacicen 17 17 touch Andloque STICKS 2 Vibration YOS You Wireless Yes Yes Battery capacity 525mAn (each) 1300man COComAn 1520man teach Battery Me 20h (official) 40h jofficial Variable Motion controls Yes Yes Yes VOS No No No No Removable ballenag"- NO NO Yes No NO Play and charge Yos Headphone Jack No No Your No "With optional Charge Grip #*Play and charge bait available #"Without voiding warranty Source: Passingham, Michael. Nintendo Switch vs Xbox One and P54 - How do they compare? Trusted Reviews, December 12. 2018.Microsoft Xbox One In 2019. Microsoft was investing in new services like Mixer-which blurs the line between watching and playing and Game Pass, a now unlimited subscription service. "The company released Xbox One S and Xbox One X in August 2016 and November 2017, and investing aggressively in content, community and cloud services across every endpoint to expand usage and decpen engagement with gamers. The latest Xbox One X was available at two different prices $150 for the 500-GB model and $399 for the 1-TR model as of 1019. One of the important features of the Xbox One was Xbox Live. This feature allowed individuals to play online spains other users around the world. Thus. Microsoft had created a community of individuals who were able to communicate with one another by voice chats and play against each other in a video game. In 2019. Xbox live had 57 million monthly users. Another service offered by Xhas Live was the Xbox Live Marketplace. which enabled users to download movies. game trailers, game demos and arcade games, It was estimated that more than 70 percent of connected Xbox men were downloading comtent from the Xbox Live Marketplace, totaling more than & million members. Microsoft introduced Kinect for Xbox One in 2014, which was based around a webcam style add on peripheral for the Xbox One console. It enabled users to control and interact with the Xbox One using gestures and spoken commands, without the need to touch a came controller. Kinect allowed the Xbox One to see the user and act according to the wor's motions and gestures. This took the concept of the Wii and pursued it to its natural culmination. making the user the game controlkr. Kinect used software technology that enabled achanced gesture recognition. facial recognition, and voice recognition. Some critics believed that the concept used by Kinect had potential far beyond games and might even become a new way of controlling computers of all kinds. It automatically Identified who one player was and paused when the player left its vicinity, so it was not hard to Imagine this ingenuity controlling all kinds of devices, such as a PC, smartphone, or tablet.""Microsoft also released Xbox One S following the release of Xbox One. The Xbox One S was more compact in design, lighter in weight, had slight performance and graphic improvement, and supported better HDMI connectivity options. However, these changes were not so significant that critics would count Xbox One S as a next generation Xbox. Sony Playstation 4 In April 2019. Sony unveiled the details of its upcoming console-PlayStation S. PlayStation lead system architect Mark Cerny spoke about the PS4's successor. While mentioning that the next-pen is backwards-compatible. Cerny also revealed that it is not an all-digital devier. and will accept physical discs. "The last console. PlayStation 4 was released in November 201 3, As of 2019. it is wallable at two different prices in two variations: Playstation 4 Pro was priced at $400 with 4K resolution, and Playstation 4 was priced at $300 with Blu-ray video quality. The P54 Included 3 GB of GODKS memory, which enabled rapid performance. Also, a player could use the loading power off this memory to power down the PS4 mid game and then later turn it back on and within seconds be playing again right where he or she left off. The PS4 supported Blu-ray discs, DVDs, and HDMI output, as wel as analog and optical digital output. In comparison to the P34. the next console is set to house an AMD chip that has a CPU based on the third-generation Ryzen. It will have eight cores of the seven-canonicter Zen 2 microchip. Although the console will support IK. displaying at this resolution will be dependent on TV's catching up. Sony launched the Play Station Virtual Reality headset in October 2016 that was developed by Sony Interactive Entertainment. Although Playstation VR had a price tag of $400. it was the only one of its kind at the time of release, hence the company was able to charge the high price. It was a step up in gaming technology as Play Station VR could be med with PS4 console that could mirror the television screen in a virtual reality view for the user. Play Station VR could be ward with PS+ DualShock controllers as well as with the PlayStation More, PlayStation VR had an OLED panel that supported a 5.7-inch display with a full high- definition resolution of 1080p. As of February 19. 2019. Play Station had sold shout 4.3 million units of Phy Station VR PS4 also launched with the ability to stream games directly to the PS Vita, Sony's handheld gaming device. As with the Switch. this allowed users to play on the tablet controller through a wireless connection, without the use of a TV display. A number of games were released for the P54 including Onimusha: Warlords. Resident Evil 2. Over Watch. Mass Effect: Andromeda, and Bacilefield One, among others Part of the PlayStation Network's success was the abslay to play games online. This allowed individuck in play with other players located in other parts of the world. The Play Station Network allowed users to download games, view movie and game trailers, send text messages, and chat with friends, and there capabilities were sure to continue. As of January 9, 2019, Sony had sold over 91.6 million units of PS4 worldwide.- Mobile Gaming Recently, another form of competition in the gaming industry had become widely available. Mobile devices such as smartphones and tablets allowed casual gamers the ability to download and play a wide variety of free or low priced games. The games could be seamlessly downloaded to the handheld device. While the interactivity on these devices was limited by a lack of controls and features, the convenience and price were something that console makers were starting to notice. In the span of a decade. mobile gaming will have grown from the smallest segment in 1012 to a 100-bilion-dollar industry in 1021. "Mobile gaming companies The Super Cell and Machine Zone have crossed the billion-dollar threshold in annual revenues, Although these companies charge Toile per purchase, the huge member of worldwide users enables them in collect enormous total revenues. The number of amortphone users has grown dramatically during last decade, which automatically grows the potential users for mobile gaming companies without having to sell crime consoles. Just having a smartphone opens the option of thousands of games for mobile camers at a single platform for a minimal price. The growing trend and popularity of mobile gaming is definitely posing compotition for gaming companies like Nintendo, among others