How a Company You've Never Heard of Beat Intel in the Next-Gen Console Market
It's currently a very exciting time for console gamers. Last November, Nintendo released the Wii U, and within the last few months, details have been emerging about the next generation console hardware for the Xbox One and Playstation 4. This doesn't happen very often--the current generation hardware was released back in 2005 and 2006.
Obviously, supplying the components for these consoles is competitive, since they sell a combined 36 million units a year. It's surprising, then, that the two biggest names in processing and graphics (Intel and NVidia) lost all three consoles to AMD, a company that runs a distant second to both major players in their respective fields.
With the deck stacked against them in two markets against two formidable opponents, AMD needed to make a big play. Their management team decided to target next-generation consoles. Their strategy was based on the advantage they had on both rivals. While Intel has pummelled AMD in the CPU market, it's much more vulnerable in the graphics market. Similarly, while NVidia has a large lead in graphics, it doesn't have a great play in the CPU market. AMD, uniquely, has both pieces of this puzzle.
AMD intentionally targeted the next-gen console manufacturers with focused messages promoting three key benefits:
- The integrated nature of their solution
- Their willingness to customize components
- Their company-wide focus on gaming
This is an amazing example of the success that can come from an effective marketing strategy. For the next 5-6 years, AMD technology will be at the heart of nearly all gaming development. This is very likely to have implications beyond just the console market. As games are optimized for AMD technology, it's likely that AMD will get a boost in the PC gaming market as well, which could help them better compete against Intel and NVidia.
I found this story interesting because it highlights the effectiveness of the most basic marketing principles: recognize how you're different from the competition, identify a target market that would benefit from those differences, aggressively pursue that market with clear marketing messages.
If you'd like to read more about this case study, I'd suggest this article written by Polygon.
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