Nov 12 2007

SAS Economists Podcast #6: The oligopolistic nature of the video game console market

by Annie Sung and Kristie Chung

Which do you prefer, the Wii? the XBox 360? the PS3? How about other video game consoles? Can you even think of any other video games consoles? Hmm… let’s see… how about the Sega? Wait, no, haven’t seen any of those in a while… what about the Atari? Oh, shoot, nope! Oh yeah, don’t forget the Caleco Vision (for the record, Mr. Welker’s earliest video game memory was of playing Smurfs on a Caleco Vision).

The fact is, today, the market for video game consoles has shrunk to three dominant firms: Nintendo, Microsoft and Sony. This podcast will investigate the video game console market, examine its characteristics, including the elasticity of demand for the different consoles, and conclude whether it exhibits the features of an oligopoly.

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About the author:  Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course. Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this author

5 responses so far

5 Responses to “SAS Economists Podcast #6: The oligopolistic nature of the video game console market”

  1. [...] Welker’s Wikinomics Blog wrote a fantastic post today on “SAS Economists Podcast #6: The oligopolistic nature of the video game console market”Here’s ONLY a quick extract consoles has shrunk to three dominant firms: Nintendo, Microsoft and Sony. This podcast will investigate [...]

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  2. Tim Con 12 Nov 2007 at 5:23 pm

    Wow yeah.. i havent played the sega for a loong time. anyways just something to add on to your topic. I heard somewhere that Microsoft actually loses money from selling the X Box system. They sell the system for less than what it's made for. But that they rely on the games themselves to make money: eg Halo 3.

    The Nintendo however makes money with each system sold and with it's current popularity, Nintendo should really be raking in the cash by now.

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  3. P Patelon 17 Dec 2008 at 9:37 pm

    A fascinating article, I was wondering where you obtained your information on as my dissertation is based on competition in the games console industry and i'm having difficulty locating data for the three competitors! If you have any suggestions I'd be very thankful if you could let me know! many thanks

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  4. Sakktion 22 Oct 2009 at 2:19 am

    This video is very interesting and it was a great idea to have a survey in the school on the preferences of the latest game consoles. In the video it was stated that the main reason why the Nintendo Wii had a greater demand and popularity was because of its revolutionary remote controller and the new gaming method and movement. However, I think the main reason why more people have the Nintendo Wii is because it is far less expensive than the other two consoles and it was released earlier around the world. Consequently, most of the gamers around the world purchased the Nintendo Wii first rather than waiting a year for the Xbox 360 or the PS3.

    Something that I was thinking about while watching this video was a rumor that I heard from many friends and I also read on a website that Apple would come out with its own gaming console soon. It was suppose to be a competition for Microsoft’s Xbox 360 and be a much more revolutionary game console than the Nintendo Wii. I would not be surprised if Apple did create its own gaming console after Microsoft, a company mainly concentrated on computer devices and information technology, created the first Xbox not too long ago.

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  5. usurylaw.comon 09 Aug 2014 at 11:54 pm

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    SAS Economists Podcast #6: The oligopolistic nature of the video game console market | Economics in Plain English

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