Rivalry in the Video Game Industry IntroductionThe video game industry faces a completely new rivalry situation. After 11 years of leadership, Sony has almost lost its strong position in the market, which gives the other two players – Microsoft and Nintendo – a chance to compete for leadership. While Nintendo's goal is to stay in the industry, Sony and Microsoft aim to strengthen their position in the ever-growing home entertainment market. The key factors that companies need to consider to gain a competitive advantage are good marketing and well-developed distribution, as well as providing a wide range of games with recognizable characters. As market segmentation increases, it is crucial to place emphasis on new target groups and recruit as many new players as possible. However, there are also many factors external and internal to the industry, which play an important role and need to be considered to get a better idea of ​​the state of the industry and to estimate its profitability and growth trend. Summary of Macro-Environmental Analysis A stricter legislation, both advantageous and disadvantageous for the video game industry. As governments become increasingly concerned about growing violence among teenagers, control over video game content is being tightened. On the other hand, anti-piracy laws aim to reduce the number of illegally copied games. With the increase in prices of everyday goods, petrol, etc., while wages do not grow as fast, disposal income decreases and for many entertainment they become a luxury good. People are not willing to spend as much as they used to. However, as the average age of video game players increases, there are more gamers with their own income, who are able to purchase more games. The industry is expected to grow because, as NPD Group surveys show, children spend more time playing games and hardcore gamers spend an average of 45 hours a week playing video games. On the other hand, growth prospects are held back by parents' growing concerns that their children are too inactive and spend more time playing video games than playing sports or participating in other activities. However, there is also a tendency to increasingly consider video games as entertainment for the whole family. Future growth of the sector is hampered by declining birth rates..