Last time we did a detailed swot analysis on Sony. In this article, we are going to break down the SWOT of Xbox-a video gaming brands.
The objective is to help you gain insights about Xbox’s overall performance and factors affecting the decision-making. We will try to understand the strengths, weaknesses, opportunities, and threats of Xbox.
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Now before we dive into the swot analysis of Xbox, let us learn a little about the company.
About Xbox
Microsoft’s video gaming brand Xbox was Microsoft’s first endeavor in the entertainment zone. The original Xbox console was produced and first introduced in the United States in 2001. This was the first video game console offered by an American company after the discontinuation of Atari Jaguar in 1996.
In 1999, Microsoft began to see Sony’s Playstation 2 as a threat to personal computers. In an attempt to compete against PlayStation 2, four engineers from Microsoft’s DirectX team—Kevin Bachus, Seamus Blackley, Ted Hase and DirectX team leader Otto Berkes, began to envision what a Microsoft console would be like. As a result, Xbox was born.
Today, Xbox comprises five video game consoles, as well as games, streaming services, an internet service known as Xbox Network, and the Xbox Game Studios production arm.
| Founder | Kevin Bachus, Seamus Blackley, Otto Berkes, Ted Hase |
|---|---|
| Year Founded | 2001 |
| Origin | United States |
| No. of Employees | 7000 |
| Company Type | Public |
| Market Cap | $2000 Billion (2021) |
| Annual Revenue | $2.3 Billion (2020) |
| Net Income/ Profit | $3.7 Billion (2021) |
Services of Xbox:
Xbox offers the following products and services:
- Consoles
- Accessories
- Xbox Games
- Xbox Game Pass
Competitors of Xbox:
The company faces tough competition with some top players. Some of its competitors are as follows.
- Sony
- Amazon
- Nintendo
SWOT Analysis of Xbox
SWOT Analysis is a technique that is used to identify and understand the strengths, weaknesses, opportunities and threats of an organization. It helps a company or a person identify factors that impact a company’s functioning and also helps in planning.
We shall now do a thorough SWOT Analysis of Xbox to gain insights into factors affecting Xbox’s functioning. Let us begin by exploring the strengths of Xbox:
1. Strengths of Xbox
Strengths are known as capabilities or available resources that a company uses efficiently and effectively for its development and overall growth.
- Second Highest Market Share- Xbox has the second-highest market share in the console operating system market. It stands right behind Playstation. In September 2021, its market share stood at 41.38%.
- Competitive Pricing- Prices have always been one of the key aspects in the console wars. Xbox’s products are generally priced below Sony’s Playstations giving it a competitive advantage over it. This proves to be a strength for Xbox.
- Consumer Friendly Console- Over the recent years, Microsoft has been successful in surpassing Sony and Nintendo to become the most consumer-friendly console out there.
2. Weaknesses of Xbox
Weaknesses in the SWOT analysis of a company are referred to as those factors that affect the growth of the company and thwart the company’s process from achieving its goals.
- Behind Playstation- Xbox is always behind PlayStation in its overall sales and has rarely taken over the number 1 spot.
- Frequent Upgrades –In the console market where every 2-3 years the console changes and the gamers have to adapt to the new console in the market and buy new games for it. This results in loss of customers.
3. Opportunities of Xbox
Opportunity is an external factor that helps a company to get a competitive advantage by using expected market trends.
- Xbox Game Pass- Xbox Game Pass is a subscription service from Microsoft for use with its various video game series. Xbox Game Pass is the biggest consumer-oriented opportunity for Microsoft since Windows itself.
- Online Gaming – Online gaming is catching up in a big way. Xbox should capitalize on this heavy penetration of the Internet to come up with its arcade-type online games that customers will be happy to play.
4. Threats of Xbox
Threats are the external factors that can cause harm and hinder the development of the company.
- Competitors: According to Microsoft’s head of gaming and Xbox, Phil Spencer, the greatest threats to its own video game business will come from Amazon and Google
- Cyberbullying and Harassment: A 2019 survey by ADL’s (the Anti-Defamation League) Center on Technology and Society revealed that 66 percent of players experienced severe harassment while gaming online, which includes threats of violence, sustained harassment and stalking. This acts as a threat to Xbox
- Desktop Gaming is Cheaper: Many console gamers have switched back to Desktop gaming as Desktops don’t get upgraded so frequently like consoles and the operating system as well as the specs can be modified to have the best experience.
Conclusion
Xbox is a big player in the console operating systems market. In the SWOT Analysis, we discovered that Xbox has a consumer-friendly console with competitive pricing, however, it is still not able to overtake PlayStation in terms of overall sales. The changing business environment further provides various opportunities and threats for Xbox.
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