SegaNet vs. MSN Gaming Zone A Strategy Comparison

Outline Framework for Analysis The Gaming Industry Comparison The Winner

Framework: Determinants of On-line Success Context and Competition Content Community Connectivity Communications

Context and Competition Information Content Value Proposition Customer Acceptance Differentiation via Personalization Industry Structure First Mover Advantage Switching Costs and Lock in Issues facing incumbants Issues facing new entrants

Context $8B computer games market. 2% are On-line games. Gamer Population Growth $8B computer games market. 2% are On-line games. Gamer population to double from 1997 to 2002. Revenues to grow from $127M to $770M in 2003

Competition Platform/Game Specific Networks Platform-Neutral Networks First and Third party games for specific platforms Subscriptions and pay-per-use. Platform-Neutral Networks Access to different gaming platforms No cross-platform gaming Advertising and subscription revenues On-line PC Game Networks Simple on-line PC games like solitaire, Bingo Based on advertising revenue

Content Types Quality Presentation Delivery

Content SegaNet Game Zone Console network Limited title selection compared to console selection Action, RPG, Sports, Strategy No test ability Dynamic site graphics PC Network Numerous titles Free, Retail, Premium Static graphics

Connectivity Types of Alliances Affiliation Programs Link with Portals Connectivity with Suppliers Channels

Connectivity SegaNet Game Zone Focus on Alliances Content: Third party publishers Traffic: Genuity Services: Amazon.com Technology: Innomedia Entertainment: FamilyWonder, Nike Mainly Internal Alliances External Content: Third party publishers Technology: WildTangent Entertainment: Cases Ladder

Community Types of Communities Mechanisms for Nurturing Transaction Interest Fantasy Relationships Mechanisms for Nurturing Email Multi-user Dimensions Chat Channels Conferencing systems/Bulletin Boards etc.

Community SegaNet Game Zone Traditional New Some traditional methods. Society Insider Information New VMU Voice-Over IP Some traditional methods. No special mechanisms to unite users.

Communications Types Mechanisms Stakeholder coverage Message Customer Service/Personalization

Communications SegaNet Game Zone Targeted to its niche market customers. Message: “You’re an insider.” Leverages MSN. Message: “Welcome to Las Vegas”

The Future Gaming will be included in our definition of entertainment. Technology Improvements Next generation consoles Built-in entertainment features Game evolution Broadband connectivity

The Winner First-mover advantage may not matter. Xbox on the horizon. Responsiveness to technology counts. Hit Games count more. Intense entertainment experience will win. Time for a new market leader?