Determination of the Video Game Console Price

Marketing Simulations
Name:
Institution:
Course:
Date:
Introduction
The video game sector is growing fast, and the dimensions are expanding. As such, the level of competition is also growing. There is need to make a few changes to make sure the company stays at the top of the market ("Platform Wars: Simulating the Battle for Video Game Supremacy", 2017). More importantly, there is a need for the company to determine a few elements to help with the growth of the company in a manner that will improve on the pricing of the current console, subsidize on the development and loyalty fees paid in by the developers.
Determination of the Video Game Console Price
As part of the determination of the above mentions elements, three simulations are carried out during the year. At the start of the simulation, the market share of the company is at 50%. This means that the market share of the completion is also at the 50% mark. However, of more concern is that, the company is selling the console at $250 dollars, while the competition is selling their console at the $370 dollar mark. This means the company is simply underpricing the current console. It is an aspect which needs to be addressed. The competition is already at the 50% mark of the market share and their console is much more expensive ("Platform Wars: Simulating the Battle for Video Game Supremacy", 2017). To establish the best approach in the market share dynamics relative to the royalties, price of the console and the subsides, it is important to handle each of the elements singularly and establish the best combination that brings one of the highest levels of market share, while improving on the profit to the company. In this case, the choice that best works for the company is increasing the price of the console to $350 dollars. This translates to the company making $343.9million dollars in profits while having the royalties at 15% and subsides at 3. This is a combination that will see the company maximize the level of profits from the titles and further increase the market share above that of the competition. At the same time, using the market share above the competition and a reduced price, there is a chance for the company to attract new customers, as they are offered a better product and at a lower price.At this price point of the console and subsides involved at three titles, the company is set to enjoy a market share of 54% compared to the competition at 46%. This is quite significant and works towards the success of the company ("Platform Wars: Simulating the Battle for Video Game Supremacy", 2017).
Determination of the Number of Video Games That the Company Will Subsidize To Enhance the Development of New Video Games
Subsides are a welcome element as they are going to ...