International Science and Investigation Journal
ISSN: 2251-8576
2015, 4(2)
Journal homepage: www.isijournal.info
Received January 2015; Accepted February 2015
The effective factors on Microsoft Company’s success in the
production of game console device
Negin Moghaddasi Jahromi*
Sogol Mahmoudkhan Shirazi**
*Department of Industrial Design, University of Tehran_ Kish International Campus, Kish,
Iran
[email protected]
**Department of Industrial Design, University of Tehran_ Kish International Campus, Kish,
Iran
[email protected]
Abstract:
This research has been formed about the effective factor on Microsoft
Company’s success in the production of game console device. This issue that
how game console of X – box Microsoft received such an considerable place
in the world and also successes in receiving the title of the most popular console
in 2011, regarding to this matter that Microsoft experienced the production of
game consoles for the first time, was interesting. After studying and identifying
the effective factors on marketing and successful policies of this factory, the
most important of these factors at the beginning was the high hardware and
International Science and Investigation Journal
Vol. 4(2)
software capability, the form of the systems designing and the development if
it's designing.
The effective advertisements, appropriate designing of the controller's handle,
special plays of X – box, the ability to create a relationship between different
systems and having capability like a home multimedia have an important role
on this process. Providing online services has improved this project which
wasn't employed by other firms. The other important factors in X – box success
which was used in future stages, were policies and marketing management of
Microsoft factory which provided new and innovative ideas and they had high
speed and appropriate timing in the project's performance. The Microsoft
company considers itself in debtedton time policies so successedto increase it's
system's sale with an annual growth of 27 % and played 475 million dollar for
receiving such a place in the world. We can find reasonable result and high
profitability by considering, identifying, and using these policies by
professionals.
Key Words:
Microsoft, X – box, Microsoft Marketing, best consoles, Microsoft Marketing
Management
Introduction:
By considering technological improvements and with increasing advance in the
people's welfare, the need for some systems for more entertainment increased.
Among this, different firms produced entertainment systems or game consoles
and the name of several famous firms was seen including Nintendo, Sony and
Microsoft which arrived recently in this field and in fact is one of the largest
producers of computer software's in the world (jame jam click journal, 2010).
This firm provided the services in the final users level in addition to the
production of software's in the producers level including the motors of game's
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production and underlying platforms and produced computer gamed and
provided game consoles (Iran mobile market journal, 2011).
The most sold products of Microsoft were Windows’s operating system and
Microsoft office software. According to the main slogan of this firm “a
computer on every table or in every house that run Microsoft software” these
two products with 90 % in 2003 for Microsoft office and in 2006 for windows,
found a considerable place in the market of home computers and table
computers (shabake Magazine, 2010).
Monopology always criticized Microsoft which created several counts for
Microsoft because of neglecting monopology's rules in judicial ministry of USA
and European Union's (Muniz and O’ Guinn, 2001, p.412).
Microsoft is active in other fields in addition to the operating system of the
market and administrative software, like MSNBC channel, MSN site and
multimedia license of Ankarta. Microsoft is active in production of computer
hardware with producing some products like Mouse – like and home
entertainment such as X – box 360 Xbox, Xenon and MSNTV Microsoft that is
popular more because of business tactics than technological innovations, wants
to perform quite non microsoftical and wants to be innovative, flexible and
change itself basically.
On 15thNovember in 2001, Microsoft invested milliard dollars and produced
and distributed X – box in north America so arrive in computer games and
introduced (Microsoft and Windows news Magazine, 2012) and it’s first game
console called X – box, also on 22th February in 2002 in Japan and 14th March in
2002 in Australia and Europe, this console was presented which shows that
Microsoft has business aims and home aims at the same time.
Microsoft could present a consul with the help of Intel processor and graphic
processor of NVIDIA which was stronger than PlayStation 2 but couldn’t
compete with this console (O ' Brien, 2009).
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Until 2005, X – box was placed at the second place after PlayStation 2 and
before game cube Nintendo in America sale Market (In world market, it was
after these two). Microsoft sold 22 million systems compared to 100 million
systems of PlayStation 2, mad lost 4 milliard dollars.
In November of 2005, Microsoft presented it’s own second gamed consuls
called X – box 360 (the first version of Microsoft console was X – box). So this
popular console needed a meaningful and attractive name, After selecting
several names such as NEXT X – box, FS X – box, Xenon, NEXT, X – box 2
and finally it 's name changed to X – box 360. The aim of this selection was that
this console not only simplified relative needs of the game for the user, but also
could be used as a multimedia center at home and could cover the user 's digital
needs, but the main aim of buying this console for uses was 3D games.
The first problems that should be solved was that how should the appearance of
new X – box was big be?!! This problem isn’t simple, the previous X – box was
big and dreadful (the figure number one, left). It was placed in a black and green
X – box which associated with poison, but it was excellent for professional
game players.
The aim was a smiling appearance and also non stupid so it can attract the
mothers who like sports and also the fathers who like cars and like cars and the
girls who like fashion without losing beloved boys of Halo (Gamespotpress. Com,
2010).
Figure 1: The first X-box and X-box 360, 2011 (http://news.cnet.com)
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In Microsoft, there is a 147 page book called Xenon book. Xenon is mysterious
name which is selected by Microsoft for X – box 360 and Xenon book
illustrates the firm's whole and comprehensive strategy.
A major part of Xenon book is about a thing which is called Dell in the book.
Dell means life 's model with digital entertainments and considers this fact that
all media such as film, video, game, picture, TV and etc. are all digitalized, and
this issue influences our way of relationship digital media all are changed to a
form of single, cohesive media according to our needs. this is the same thing
which is considered as convergence in technical language of ninetieth decade. X
– box can distribute sound CDs in addition to the games and can change the
songs of a CD to another format and play it according to their system 's hard
disk. we can attach Ipod to X – box 360 and listen to it 's song from their system
's hard disk. We can watch DVD with this system and it can be attached to X –
box 360 and watch the picture on TV, so all of the family members doesn’t have
to go to the work's room and look at the computer's monitor, even you can
attach X – box 360 with Wifi to PC if you are familiar with technology and gain
access to music's, films and pictures saved on the computer (javan Journal, 2011).
But can it play the songs which are received from an online music store
belonged to Sony? Can it accept the messages sent from AOL Instant
Messenger? Can it create a network with computers with MAC OSX operating
system and not windows? If a platform were very open, you can't earn money
from this. If it were very close and monopoly, every less people can use this and
it will gradually disappear and die.
this isn't the whole problem. X – box 360 can perform as a communication
system. In contrast to Sony or Nintendo, Microsoft created an online services
called X – box LIVE fir completing it's game console Device. As it shown in
figure 2, this service was introduced with the name of X – box LIVE for the
first time (Hew, eta, 2010).
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Figure 2: X-box LIVE project in 2005 (Wikipedia)
The final stages of this project were related to the internal contents of X – box.
Microsoft should make it’s appearance attractive. In addition to X – box's
Appearance that is like Ipad's style. Peter moor has created strange and nonMicrosoft Cal advertisements for it. Moor held a party for X – box 360 like the
first public show of a film and it was played on MTV and Elijah wood was it 's
host and famous group of killers were participated.
Moor bought the license of one the famous songs of B – side for X – box's
theme song 360.
Another effective factor on X – box's success was Natal's project. Natal project
was introduced by Microsoft in E3 conference in 2009 and released in 2010. In
this project, one controller mechanism was added to X – box using video and
sound techniques of processing, so the user can guide and use the games and X
– box capabilities only with his member's movements and without any
controller system (Figure 3). The name of this project was changed to kindect (X
– box, 2011).
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Figure 3: Kinect, 15th November 2010
The marketing idea of Microsoft firm for X – box console contained three rules
which composed of organized issues that required the customer's estimation, the
market's needs and fulfilling the ideal needs of the customer and it is the
customer which is more effective than other competitors in this area.
Microsoft could achieve these three rules and tired hardly for the needs and
potentials of the customers. The research was done on main users, those who
played for more than 25 hours in a week. This group was studied as the main
statistical society and contained young customers who considered the
importance of the console's speed and graphical quality, so X – box was
designed modernly and had fast and strong processors and the games were
played with higher speed and quality and better sound or Dolby technology
while X – box was the first system whose handles were presented wirelessly
and this was ideal for the profession users who always deal with this system
(business.Com , 2000).
At first the limited number of X – box made Microsoft anxious but this firm
solved this problem by entering 5000 game users and game producers by paying
500 million dollars. For entering X – box console to the market, Microsoft lost
150 dollar for the sale of every console at the beginning with distribution of X –
box in the market and the firm abandoned it 's profit at the first stage of the sale,
in fact Microsoft preferred long lasting profits to short lasting profits.
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Microsoft considered three aims for X – box 360. The first aim was achieving
the main part of video game's markets. The second aim was varying the firm's
working field, and paying attention to home entertainments from home
computers. The third aim was the firm's fame and popularity in recent years as a
result of judicial laws.
If Microsoft wants to increase X – box 's addresses, this system should seem
more friendly and noble so the main idea of design was based on encouraging.
Microsoft was trying to find a solution to gain it's first credit (Lecher, 2004).
At first Microsoft encouraged the men to buy X – box by saying “the most
powerful computer that is designed for game playing” (Mossier and Boehner,
2005).
Since PlayStation 2 was weaker than the main X – box, Sony increase it 's
future console 's ability that is PlayStation 3 and solved it's problems. So
Microsoft benefit from Sony 's delay and entered game console of X – box 360
six month sooner but Microsoft benefit from video games which were presented
by it's competitor's, and created this definition for the people that video game is
considered a global action which is an advertisement for Microsoft 's product
(Wonko – ga, 2005).
In fact X – box marketing success by combining several cases such as price,
considered product, improved products and system’s package. Microsoft should
present a system to provide game 's experience for the players and be equal with
it 's competitors from the price 's point of view to encourage them to buy this
consul, so management in system price and capability guarantee 's it 's success.
Microsoft also tries to find a solution for solving this problem for X – box's
users and players that why a special console should be used instead of
computer.
The first idea of X – box was formed by a firm called Flextronics located in
North-west of Guadalajara in industrial park complex. If there wasn’t this firm,
X – box remains as an original idea. Microsoft firm considered a budget
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according to this project but when they forced to build a factory, they didn't
produce this project. The manager of Flextonic told this issue that If there were
the people like us; the firms like Microsoft wouldn't perform hardware projects
and it 's risk was very high (O ' Brien , 2009).
The load of Microsoft was assigned to flextonic. Sony faced silicon equipment's
of PlayStation 2 and Nintendo was trying to introduce it 's new console "game
cube" at that time. Microsoft benefit from the delay of these firms and Microsoft
had a time to introduce it 's new console X – box and means that "this project 's
aim in fact is doing an action in an appropriate time and place" (O ' Brien , 2009).
The cited figures show Microsoft 's success rate in producing game console of
X – box (Mazzon, 2005).
Sales
Region
(as of May 10, 2006)
North America
Europe
Asia
WorldWide
Units sold
16 million
6 Million
2 Million
24 Million
First available
November 15, 2001
March 14, 2002
February 22, 2002
Material and methods:
With interviewing and distributing questionnaires among 32 professional
people, we found some date. The participants were between 7 to 37 years old.
The place of distribution of these questionnaires was among professional people
in Shiraz and Kish Island in Iran. These people all mastered on this system or
used this system. The collection of data was done by interviewing with X –
box's sellers and also questionnaires via internet forms and social sites. The
questionnaires were distributed among professional people in P.C center and
Mola Sadra shopping center in Shiraz. The data were collected and analyzed in
Excel software and the results were said by following diagrams.
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Conclusion:
According to the statistical society and distribution of questionnaires among
these people, the data were obtained which were analyzed by drawing relative
diagrams. Considering the success's frequency of Microsoft by the users, now
the factors that affect this success were studied. According to the obtained data
from questionnaires and also studying the diagrams 1, the most important
characteristics which effects the sale if this consul was the high graphic of this
system and 16 people among 32 people, considered the system is graphic as the
most important factor.
(diagram number 1: The most important factor affecting the game consul 's sale form the
users of this system point of view)
16
14
12
10
8
6
4
2
0
X-box
‫اﯾﮑﺲ‬
‫ﻟﻮازم ﺟﺎﻧﺒﯽ‬
equipment
‫ﺑﺎﮐﺲ‬
’s
The‫از‬convenient
The‫ﻫﺎي‬
special
‫دﺳﺘﻪ‬
‫ﻣﺨﺼﻮص راﺣﺘﯽ اﺳﺘﻔﺎده‬
‫ﺑﺎزي‬
use
it’s
games
‫ ﺑﺎزي‬of
‫ﮐﻨﺘﺮل‬
‫ﺑﺎﮐﺲ‬
‫اﯾﮑﺲ‬of Xhandle
box
Game
‫دﺳﺘﮕﺎه‬
‫ﮔﺮاﻓﯿﮏ‬
console
graphics
andspe
Game
The ‫ﻗﯿﻤﺖ‬
Price of
‫دﺳﺘﮕﺎهﺳﺮﻋﺖ دﺳﺘﮕﺎه‬
console
this system
speed
Following a high competition among several high firms in producing game
consoles, some factors were studied in the questionnaires that what was the man
advantaged of X – box over other game consoles which has increase it's sale.
Microsoft according to it 's new idea that is providing LIVE system in special
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International Science and Investigation Journal
Vol. 4(2)
games has attracted many users which is evident in diagram number 2 and this
system is better than other consuls from X – box 's users point of view.
(Diagram number 2: Advantage of this consul over other consul in the market from the
user’s point of view)
12
10
8
6
4
2
0
The console’s
of ‫راﺣﺗﯽ‬
‫ﻗﯾﻣت ﮐﻧﺳول‬The ease
‫دﺳﺗﮫ‬
‫اﯾﮑس‬X-Box’s
‫ﺑﺎزی ھﺎی‬
price
console’s handler
games
‫ﺑﺎزی‬
‫ﺑﺎﮐس‬
Variety
Being
user
‫ﻟوازم‬
‫ در‬in
‫ ﺗﻧوع‬user
friendly
equipment’s
friendly
‫ﺟﺎﻧﺑﯽ‬
‫ﺑودن‬
The
‫ﺳﺧت‬hardware
‫ﻗﺎﺑﻠﯾت‬
capability
‫اﻓزاری‬
Regarding to this the fact that the participants were in different younger ranges,
the diagram number 3 showed that the data which obtained, 75 % of console
users of X _ box in people between 15 to 21 years old.
(The diagram number 3: the age of main users of x box users)
25
20
15
10
5
0
14 ‫ ﺗﺎ‬7
21 ‫ ﺗﺎ‬15
29 ‫ ﺗﺎ‬22
37 ‫ ﺗﺎ‬30
The question which should be considered was that why Microsoft entered risk
able area of producing game consoles, considering this fact that this project is
the first project for producing game consoles for Microsoft. Regarding Figure
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International Science and Investigation Journal
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number 4, 37.5% of console users knew the growing market for game consoles
as the reasons of arriving Microsoft firm in to consoles.
(The diagram number 4: The reasons of arriving Microsoft firm in to consuls production)
12
10
8
6
4
2
0
‫ ﮔﺳﺗرش‬products
‫ﺑﺎزار رو ﺑﮫ‬
Entertainment
‫ﺑﺎزی‬market
‫ﮐﻧﺳول ھﺎی‬
growing
‫ﻧﺷﺎن دادن‬Change
‫ﺑﮫ ﺳوی‬the
‫ﻣﺳﯾر‬
‫ﺗﻐﯾﯾر‬
‫ ﺑرﻧدھﺎی‬competition
‫رﻗﺎﺑت ﺑﺎ‬
Indicate‫ھﺎی‬
the‫ﺗواﻧﻣﻧدی‬
company
main
aim to ‫دﯾﮕر‬Having
‫ﺷرﮐت‬
‫ﮐﺎﻻھﺎی ﺳرﮔرﻣﯽ‬
capabilities
entertainment
products
with other brands
Discusson and result:
The reason of Microsoft's success is the importance of software and hardware
for it. According to the user’s views, 50 present of people considered high
graphic of the system as the most important fact of X – box success. X – box
graphical 's processor was designed by ATI and was called Xenon.
X – box 360 graphical processor is equipped with a cohesive structure (unified
shading Architecture) and a result there aren't any special units, this issue is
pixel or vertex.
According to the second diagram, this issue is evident that special game of X –
box is effective for selling this system and this advantage is a benefit over other
consoles in the market. At first, the limited number of X – box caused a kind of
anxiety for Microsoft firm but this firm solved this problem by entering 5000
game users and game's products and paying 500 million dollars. The issue
which helped the importance of X – box 's games was X – box LIVE.
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International Science and Investigation Journal
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By studying the third diagram, the most participants were among 15 – 21 years
old that composed 75 present of X – box users, so Microsoft introduced some
popular games according to this issue and by considering the special games
importance and paid 500 million for these games and all of them agreed with
this group.
Sometimes a question is raised that while Microsoft is considered as the largest
producer of computer software in the world, why arrived at the risk able area of
game console's production with paying so much money?!
According the obtained result from the fourth diagram in results part, the
increasing market of consoles is the most important factor for attracting
Microsoft in this area, but in fact Microsoft considered three main aims for X –
box 360. The first aim is obtaining the main part of increasing market of video
games. The second aim was varying the firm's work area and paying attention
from home computers to home entertainments. The third purpose was the first 's
fame and popularity in recent years as a result of judicial claims related to
windows sale, so they tried to find a solution for obtaining it's original credit.
By selling 535000 system in February 2011, X – box 360 was introduce as the
first global console that it's sale increase 27 % annually. Microsoft firm paid
475 million dollar for achieving such a place in the world.
X – box tried very hard and paid much money for it 's production to show a
symbol of innovative idea of Microsoft.
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mobile journal, number 30, p. 20
 Hew, K., Gibbs, M. R. & Wadley, G., (2010) Usability and Sociability of
the Xbox Live Voice Channel, The University of Melbourne, p. 1.
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Xbox Marketing concept and Strategy, Deakin University (Faculty of
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 Mossberg , W. S., Boehret, K., (2005) Discontinuation of Xbox LIVE for
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 Wonko-ga, (2005) Xbox 360 Marketing analysis (Industry, Competition,
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Internet Refrences:
 www.Business.com, 2000
 www.Gamespot Press.com, 2010
 http://news.cnet.com, 2011
 www.Wikipedia.org/wiki/Xbox 360 Hardware, 2008
 www.Xbox.com, project Natal, 2011
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