Video Game Industry Overview
John Huddle
25 October 2014 Video Game Industry Overview Video game console industry is tasked with development, publication, manufacture and distribution and sells the electronic devices for games, accessories and software. The number of pixel and image contained determined traditionally gaming devices. The current development brings about 3g polygon imagery that has been pioneered by Silicon graphics institute. The industry is segmented into two different sectors with the first being the software sector which constitutes the games themselves and the second is the infrastructure and the technology that is needed to support the playing of the games. These sectors make the game industry. The
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The upstream market undertakes mostly the manufacturing of hardware and development of software. There are mainly four vendors in the manufacturing of hardware and these are consoles, personal computers and mobiles. The mobile is viewed as the market of the future though very small (Egenfeldt, 2013). The console market is very significant and Microsoft, Nintendo and Sony dominate it. The software is developed in-house by third party contractors and is owned directly by publishers. They have less autonomy but enjoy security. The downstream segment consists of distribution, both software and hardware. Software distribution is organized by publishers who must obtain licenses and for the authority to sell games pertaining to a particular console and must pay the manufacture some royalties for each game sold. Microsoft has its own publisher and it is the only player that integrates the three functions of software development, hard ware manufacturing and software publishing. United States is the industry leader followed by Japan and then in the third place is France. The distribution has been organized by the manufactures through local and regional subsidiaries that will pass their products to retailers. The three major markets for the consoles are North America, Asia and Europe, though Europe has a strong downstream position with small importance in upstream activities (Zachariasson, 2012). There are high barriers
Today the three biggest game companies are Xbox, Playstation and Nintendo. The reason they are
The network effects in the video game industry are derived from the console system that is sold to consumers. If a company is able to increase penetration in this arena, though at-cost/ below-cost pricing or pull created through the development of desirable content, it can potentially lock in the added value of the video games sold for the system. Which is to say, the console locks-in the network effects in the industry and the games serve to reap the profits. The video games, however, may present something of a challenge in that they can be somewhat easily replicated by competitors. Nintendo used an encrypted chip system to reduce this possibility.
Video games are an ever-growing franchise that is constantly undergoing change. Ever since the dawn of video games, new consoles, games, developers, and teams have come together, fallen apart, triumphed, and failed. What is it that has allowed some to thrive where others failed? Several different factors have changed and influenced the world of gaming, including the history that is continuously being written, the people who have built the games behind the scenes, and, of course, the actual video games themselves. Numerous video games have been more successful than others, but identifying what components set the successful apart from the unsuccessful is something definitely worth observing.
• Every company produce video game for different consoles, consoles are developed new generations fast, game developer should compete to gain license for new generation console.
So, I’m going to change things a bit. Instead of just talking about dates and numbers, which can be boring; I’m going to give this a little casual twist. So, in order to start the history let’s get a few facts out of the way. Let’s talk about gamers, mainly because I’ll be using the term a lot; gamers are people who spent a lot of time playing videogames. The Average gamer playing video games has spent twelve years playing them. Adult gamers have an average of fourteen years of playing videogames, guys have an average of sixteen years, and girls have an average twelve years. Speaking of girls did you know that 47% of gamers are girls? I would have never guessed that, but it’s a fact. So, as of 2013 49% of all people who live in The United States owns a console. All of them that own a console have at least two of them. Me, I own eleven… I think I may have a problem. Anyway, now that some of the facts are out of the way let’s start, THE HISTORY OF VIDEOGAMES! Now before I start I want to talk about all the most important events in the history of videogames, as I call them eras. Each era is very important because they shaped the videogames we know and love today.
“During the 1940s and the 1950s, computers took up entire rooms and were so expensive that only universities and large companies could afford them” (Behring 1). Being as that, computers were too expensive to obtain to be able to create a game, “students Steve Russell and his friends” used their school’s computer to create the “dueling game between two spaceships”, called “Spacewar”. (Behring 1) They game began to be used at other universities that also had computer programs. Ralph Baer who was an engineer, considered using the television to play video games on. Baer then created the first video games for the television in 1967(Behring2). Once the first games were created more games followed. Then what would be known as the gaming industry by a “Nolan Bushnell”, who wanted to use they games for retail. The industry would grow within a short span of time in which the sales declined until evolved games would once again rise sales and future advancements.
With the competition in the video games industry getting more intense, the next steps of the video game companies become more crucial for their positioning on the market. Due to the low product differentiation, the next market leader will be the platform provider that manages to offer an innovative gaming experience and a wider population of buyers that include all demographics. Although the industry is being totally dominated by Nintendo’s console, the industry is still considered to show a
Both Sony and Microsoft focused their efforts on hard-core gamers and offering processing power and cutting-edge features to attract them. On the other hand, Nintendo has been trying to attract new customers that traditionally are non-gamers. The
In the past 15-25 years video games had enhanced a lot. With the newer technology the video games, controllers and consoles have reached a new stage in the way people can play video games, without controls just motion sensors. Of all the changes that have happened in video games. The new games that are played now versus the old games that people play some years ago. There are some new kind of games that in the past did not exist such as Wii Sports, Grand Theft Auto Five, Call Of Duty, boat load of other new games. Lots of the video games are just a step up of games of the past, such as Mario Cart, Super Smash Bros, and Mario Bros and a lot of different games.
Toys R Us is one of UK’s leading toy and game retailer. This report conducts an academic research focus on Toys R Us (UK) in toys and games retailing sector. In the first part of this report, we will discuss the toys and games industry background and the overview of Toys R Us. Then, the research will focus on Poster’s Five Force Model and Porter’s Generic Strategies. In the next parts, this report will concentrated on the potential strategies which Toys R Us might pursue in the future. Conclusion and recommendation will be mention in the final part of this report and the recommendation will be covered the best strategy for Toys R Us which can be used for the future competitiveness.
Over the past year we have been in contact with game developers such as Ubisoft, EA, Bethesda, and Rare; all of these developers had a common interest in developing games for a console that we at Ninesis Gaming Company will develop and design. We are on the verge of creating a gaming console to not only compete with the Wii U, PlayStation 4, and the Xbox One, but to surpass them in every marketable area. We have already constructed a prototype
The role of technology is vital in this industry as it focuses on technological efforts for competitive advantage. Every new development uses new technology. Though there are restricted innovations in the gaming industry, the speed of technological transfer is very high. Nintendo’s role from playing cards to toys to video games and then with each console introduced, included many technological changes. Technological up gradation increased hardware costs and discouraged innovation. The online capability of Nintendo Wii was a major change in the technology of the video game industry though they were not able to do as well as their competitors (Sony, Microsoft).
Nintendo however is not present in this new market and therefore it is very important to take in consideration to enter this new area because at the moment the company does not have products that satisfy those new needs resulting in the loose of sales and consequently revenues.
Herman et all (2002) points out that history of video games begins from 1971 year, when Nutting association released 1500 machines with Spacewar video game. At the beginning it was too difficult to control the game process and playing machines had huge dimensions. But by the time with new technologies they become more compact and easier to play. According to the information given by Herman et all (2002), the period between the years of 1978-1981 is called ‘golden age’ of video game industry. In this period the arcade games ‘Football’ and ‘Space Invaders’ were released. All previously known sale records were broken by these two games with nearly equal wages. In this time interval great breakthroughs in the field of graphics were achieved,
The main obstacle facing a start-up video game console company from entering the industry is saturation of the market from the larger video game console makers or the “big three” Nintendo, Microsoft, and Sony. The big three tend to release new game consoles around the same time frame and compete head to head for sales. During the time frame it is impossible for a new entry to jump into the fray. 2010 was a banner year for video console sales Sony’s PS3 sold 14 million units followed by Microsoft’s Xbox 360 13 million and surprisingly Nintendo’s Wii led the big three selling 17 million units. After the 2010 release of all three consoles sales started to decline for each company. Nintendo took the largest sales loss at 72% in 2013 only 747,000 were sold compared