...VIDEO GAME INDUSTRY Son Tung Nikkila ID: 61191023 Introduction The first video game, Spacewar, which was created by Steve Russell in 1960s, marked a beginning of the video game industry. However, video games were not commercized until 1970, when Nolan Bushnell made a clone of Spacewar, called it Computer Space, and marketed it to the market in the form of a coin-operating arcade machine. And thus the video game industry started (Kline, Dyer-Witheford & Peuter, 2003). As video game expanded people spent less time on TV and spent more time on video game (Allen & Kim, 2005). In their article “Paradigm shifts in the video game industry”, Zackariasson and Wilson (2010) wrote about four important shifts in the video game industry: the starting period of video game industry, the development of the home cartridge, the entry of independent game developer-publishers, and the development of massively multiplayer online role playing games, known as MMORPG. According to the authors, those changes in the industry had an impact on its competition and culture (Zackariasson & Wilson, 2010). Kline, Dyer-Witheford and Peuter (2003) also mentioned about the starting period of the video game industry and agreed that it marked a great beginning of the industry. Along with the fast growth, the authors also brought up how the fast growing industry came to an end in 1984. However, not long after the meltdown of the industry, Nintendo stepped in and rescued the industry with its...
Words: 3145 - Pages: 13
...title of the article is "Video Games: An Overview”. In this article I learned about the general analysis of the video game business and the growth acceptance. It tracks down the roots of video gaming along with the depiction of improvements in the industry of gaming and computer information science, which significantly aided in the development approval of the gaming industry. However, along with the improvements of the video game industry came the negative effects such as violence, behavioral problems, and addiction in children and adults; causing a huge impact in our society. According to the authors of the article, there are a big controversy surrounding the game world; associating violence and behavioral problems with video game usage. There have been many studies showing the positive association between games and violence. Video games that feature violent actions may lead addictive players to be insensitive to violence; therefore, initiating actions such as aggressive thoughts and aggressive behaviors. However, the game industry also directed its own studies; showing that video games do not have a positive relationship between violence and aggression. Another issue cited by the authors is the addiction caused by video games. This problem has even forced United States and other countries to open health clinics that are able to help and support these types of patients. When it comes to such controversial issues like the association between video games and violence, a lot of...
Words: 609 - Pages: 3
...compare to the United States. This has its advantages and disadvantages for the video game industry in both countries. An advantage for the Canadian video game industry it is a disadvantage for US video game industry. Therefore, advantage for US video game is a disadvantage for Canadian Video game industry. For instances an advantage for Canada video game industry, the industry will experience a tremendous high inflow of American customers buying Canadian video games; meaning Canadian video game is constantly selling their products. Therefore, Canadian companies are doing better because in order for a company to be better off; the company’s accounts receivable and inventory turnover ratio must be higher and days to sell must be lower. This is a disadvantage for US because their dollar is worth more, but Canada is getting high inflow of tourist from US because of higher US exchange rate, as a result those tourists expend lots of revenue on Canadian goods and services. Since Canada is one of the biggest exporters in the world, an advantage for the US is that, the exports sales converts into larger amount in Canadian dollars (which is a disadvantage for Canada); meaning US production cost is lower in Canadian dollars. The Exchange rate changes all the time, an increase in Canadian dollar may also have its advantages and disadvantages for companies in general in Canada “As part of a globalized industry, a given Canadian publisher or developer may see both negative and positive impacts...
Words: 299 - Pages: 2
...firm proclaims that it is “a worldwide online, PC, console, handheld and mobile game publisher with leading positions across every major category of the rapidly growing interactive entertainment software industry.”1 The video game industry of today looks vastly different than it did 10 years ago, with the stark contrast being that many firms are designing their games to be more family-friendly; the stereotypes of video games no longer being just in the realm of teenage boys. All in all, the industry is faring well with reported sales of 273 million units in 2009, generating an astounding $10.5 billion in revenue. However, it is rather difficult to enter as many games necessitate enormous investments. Not only is it tough to enter, it’s extremely competitive since the big players already own a vast majority of the best brands and are interrelated, thereby enjoying great competitive advantages. To again quote its investor’s page, Activision Publishing’s objective is to “create, acquire, and maintain strong franchises... execute disciplined product selection and development processes… focused product offerings, diversity in platforms and geographies.”2 By emphasizing an aggressive effort to develop popular franchises with online play (Call of Duty & Blizzard games) and games with loyal niche audiences, Activision reduces the amount needed for development investment. Furthermore, successful franchises/game series denote that...
Words: 631 - Pages: 3
...When the refinement of products and services, or the monetary flow has two directions, it is referred as Two-Sided Business Models. The concept of a value chain and terms such as upstream and downstream is not as clear as in One-Sided Business Models. Development can be made by what is in One-Sided Business Models referred to as downstream actors and monetary flow can come from actors referred to as upstream. Two – Sided Business Models are also mentioned as “Multi-sided Platforms”. One of the best examples for “Multi-sided Platform” is gaming platforms. The platform’s value for a particular user group depends substantially on the number of users on the platform’s “other sides”. A video game console will only attract buyers if enough games are available for the platform. On the other hand, game developers will...
Words: 1179 - Pages: 5
...Five Forces Analysis of the Video Game Industry The video game industry is the economic sector involved with the development, marketing and sale of video and computer games. It includes video game consoles, game software, handheld devices, mobile games and online games. The video gaming industry has been growing exponentially in recent years with Sony, Microsoft and Nintendo competing for the higher profits in the market. This essay will analyze each of the five forces acting on the industry: threat of new entrants, threat of substitute products or services, bargaining power of buyers, bargaining power of suppliers, and the competitive rivalry among existing firms. Then it will be determined if the video game industry is still an attractive industry for Sony. The video game industry has high entry barriers because of its high research and development costs, and capital investment needed to start a business in the console industry. The cost required to develop and manufacture a product that could be a decent competitor in this market is too great for a non-established company in this industry. The technology that is needed to be successful is too advanced for new competitors to achieve. For this reason, the threat to Sony, Microsoft and Nintendo of new entrants, was not very high in 2008. Additionally, Sony’s PlayStation, Microsoft’s Xbox, and Nintendo’s gaming systems were very well established names in the industry. The prestige of these products was so strong that it...
Words: 943 - Pages: 4
...The video game industry is the economic sector involved with the development, marketing and sale of video games. It encompasses numbers of job disciplines and employs a lot of people worldwide. It includes video game consoles, game software, handheld devices, mobile games and online games. Console is the largest segment in the industry. In recent years, the video gaming industry has been growing rapidly and it may grow in the future. The three main competitor companies in this industry are Microsoft, Sony and Nintendo. Microsoft is a multinational computer technology corporation that specialize in software such as Microsoft Windows operating system and the Microsoft Office suite. But what is more important they are best known for their consumer products Xbox. Sony is one of the biggest manufacturers of electronics, video, communications, video game consoles, and information technology products for the consumer. The latest generation of its console game products is the Playstation 3 which replaced Playsation 2.Finally Nintendo is one of the largest Japanese technology companies well known for its console games. Its latest and the most successful console Wii was able to outshine Microsoft’s’s Xbox and Sony’s PS3. Analysis of the competitive industry Organizations view competition in an industry as a crucial issue that needs to be analyzed. In terms of economic theory (cited by Johnsons et al.) industry may be defined as “a group of firms producing the same principal products”...
Words: 2308 - Pages: 10
...The Video Game Industry An Industry Analysis, from a VC Perspective Nik Shah T’05 MBA Fellows Project March 11, 2005 Hanover, NH The Video Game Industry An Industry Analysis, from a VC Perspective Authors: Nik Shah Nik.Shah@Dartmouth.edu Tuck Class of 2005 Charles Haigh Charles.Haigh@Dartmouth.edu Tuck Class of 2005 • The video game industry is poised for significant growth, but many sectors have already matured. Video games are a large and growing market. However, within it, there are only selected portions that contain venture capital investment opportunities. Our analysis highlights these sectors, which are interesting for reasons including significant technological change, high growth rates, new product development and lack of a clear market leader. The opportunity lies in non-core products and services. We believe that the core hardware and game software markets are fairly mature and require intensive capital investment and strong technology knowledge for success. The best markets for investment are those that provide valuable new products and services to game developers, publishers and gamers themselves. These are the areas that will build out the industry as it undergoes significant growth. • A Quick Snapshot of Our Identified Areas of Interest • Online Games and Platforms. Few online games have historically been venture funded and most are subject to the same “hit or miss” market adoption as console games, but as this segment grows, an opportunity...
Words: 15586 - Pages: 63
...SALES, DEMOGRAPHIC AND USAGE DATA 2013 ESSENTIAL FACTS ABOUT THE COMPUTER AND VIDEO GAME INDUSTRY [ iii ] “No other sector has experienced the same explosive growth as the computer and video game industry. Our creative publishers and talented workforce continue to accelerate advancement and pioneer new products that push boundaries and unlock entertainment experiences. These innovations in turn drive enhanced player connectivity, fuel demand for products, and encourage the progression of an expanding and diversified consumer base.” —Michael D. Gallagher, president and CEO, Entertainment Software Association [ iv ] WHAT’S INSIDE WHO IS PLAYING 2 3 Who Plays Computer and Video Games? Who Buys Computer and Video Games? AT PLAY 4 4 5 5 6 6 7 What Type of Online and Mobile Games are Played Most Often? How Many Gamers Play on a Phone or Wireless Device? How Many Gamers Play Games With Others? How Long Have Gamers Been Playing? Parents and Games Do Parents Control What Their Kids Play? Top Reasons Parents Play With Their Kids THE BOTTOM LINE 8 9 10 11 What Were the Top-Selling Game Genres in 2012? What Were the Top-Selling Games of 2012? Sales Information: 2002–2012 Total Consumer Spend on Games Industry 2012 WHO WE ARE 12 12 About ESA ESA Members OTHER RESOURCES 13 ESA Partners The 2013 Essential Facts About the Computer and Video Game Industry was released by the Entertainment Software Association (ESA) at E3 2013. The annual research was conducted...
Words: 2727 - Pages: 11
...Forrester Discernment and Discourse 1313 5 May 2014 Sexism Sells: The Male Dominated Video Game Industry Only 4% of video game titles released in the past 10 years feature a playable female character as the leading role, and there are even fewer female protagonists on the list of the top grossing video games (ESA). This trend of male dominated storylines is evident in other forms of media as well: movies and television shows tend to be centered around men, but video games show the least diversity in protagonists and often have regressive views on women and their position in society. Women make up 20% of console video game players and 46% of computer and mobile game players in this 20 billion dollar a year industry, meaning they are contributing a large amount of profits (ESA). Despite their significant purchasing power, they are not represented equally as characters in games, and continue to be used as a plot device or sexual being to attract the male target audience. Neither are they allowed to be a compelling character with a story arc and personal growth as we see with the male protagonist. Female characters, when included, tend to be one dimensional and only valued for typically how they fit into traditional gender roles by being submissive and innocent. This narrow portrayal of women comes from the fact that the developers of video games are predominantly men. Only 11% of game designers are women and only 3% of programmers, even though it is one of the fastest growing...
Words: 4263 - Pages: 18
...1. How attractive is the video game console industry in 2008? In 2008 the video game industry is dominated by three major players and their respective gaming consoles. First of all there's Sony with its PlayStation 3 launched by the end of 2006. Then there's Microsoft with its Xbox 360, launched in the end of 2005; and finally Nintendo with the "Wii" in late 2006. These three players are struggling to gain market leadership in the game console industry. The video game industry, off from an uncertain start in 1972 has been marked by quick and frequent changes of fortune amongst the various players in the market. The market was characterized by rapid growth as well as unexpected down turns such as the one in 1983 where the industry lost 97% of annual sales volume in 3yrs. The industry appears to exhibit five to six year cycles of competition which concur with advancement of underlying technology. Nearly all-technological leaps from one generation to the next were marked by a change in leadership. Currently, the market is lead by Nintendo with 60% operating margin, compared to Sony's -9.7% and Microsoft's even worse -33.7%. In recent years, Nintendo has managed to overthrow both Sony and Microsoft despite having a console which is significantly less technologically advanced. There is a low risk of potential entrants due to high sunk costs (as demonstrated by Atari's "ET" flop), large capital requirements and very high economies of scale needed especially since product is sold...
Words: 1245 - Pages: 5
...the key drivers of change. On the other hand the five forces framework helps to understand how the competitive dynamics within and around the video game industry are changing. PESTEL Framework: This categorizes environmental influences into six main types: political, economic, social, technological, environmental and legal. Political: Factors such as taxation policies, foreign trade regulations and social welfare policies influence the video game industry. Video games have a tendency to play with the emotions of people which inturn can threaten peace and law, a country being multicultural. Therefore Government has the authority to control the contents of the video game frames. Economic: Places such as US and Japan are largely dominated by the video game business. Therefore contributing towards the GDP of their countries. Interest rates have not much impact on the video game business as they manufacture their own units. The disposable income of the consumers in the video game industry has an effect on their buying behavior. For example people who fall under a low income range may not afford to buy a video game of a high price. Nintendo’s low manufacturing cost was also one of the reasons for it to sell its games at a nominal price, therefore increasing its sales. Social: The social factors that influence the video game industry are population demographics, income distribution, lifestyle changes, social mobility, attributes to work, consumerism, level of education and...
Words: 676 - Pages: 3
...framework helps to understand how the competitive dynamics within and around the video game industry are changing. The two frameworks are discussed below: PESTEL Framework: This categorises environmental influences into six main types, namely: political, economic, social, technological, environmental and legal. A PESTEL analysis on the video game industry is carried out below: Political: Factors such as taxation policies, foreign trade regulations and social welfare policies influence the video game industry. Video games have a tendency to play with the emotions of people which inturn can threaten peace and law, a country being multicultural. Therefore Government has the authority to control the contents of the video game frames. Economic: Places such as U.S and Japan are largely dominated by the video game business. Therefore contributing towards the GDP of their countries. Interest rates have not much impact on the video game business as they manufacture their own units. The disposable income of the consumers in the video game industry has an effect on their buying behaviour. For example people who fall under a low income range may not afford to buy a video game of a high price. Nintendo’s low manufacturing cost was also one of the reasons for it to sell its games at a nominal price, therefore increasing its sales. Social: The social factors that influence the video game industry are population demographics, income distribution, lifestyle...
Words: 2936 - Pages: 12
...Blakeman, Daniel DeMaiolo, Carla Hill, and Mason Shattuck Industry Analysis: Dominant Economic Features Definition of Software Publishers Industry According to the United States Census Bureau, Electronic Arts would fall under the Software Publishers Industry (NAICS code 511210, SIC 7372). The definition of this industry is as follows in the North American Industry Classification System: “This industry comprises establishments primarily engaged in computer software publishing or publishing and reproduction. Establishments in this industry carry out operations necessary for producing and distributing computer software, such as designing, providing documentation, assisting in installation, and providing support services to software purchasers. These establishments may design, develop, and publish, or publish only” (United States Census Bureau, Software Publishers Definition). Electronic Arts (EA) does, in fact, make up one of the world’s largest independent developers, publishers, and marketers of video games. Market Size, Growth Rate, and Industry Life Cycle According to research provided by Thompson, author of the EA case, in 2005, the video game industry made up a $35 billion global market (Thompson 2007). In 2005, the United States alone made up $7 billion in sales out of the $35 billion. The United States also had 228.5 million unit sales which included video games played on PCs and games played on video game consoles as well as handheld gadgets (Thompson 2007). The market...
Words: 11508 - Pages: 47
...Video Game Design Career Essay I was a kid, maybe six or seven years old when I first played one of those small portable video games, the famous Nintendo gameboy advance. Since that day I became a lover of video games, dreaming of becoming a creator or game designer, as it is called today. As I play more games, more grew in me the dream not only to play the game, but Also to create them; in fact I have come up with many nice thoughts about video games from what I have played and I believed one day my dream will come true when I will create my own game, hoping such game will become a famous game. After doing researches, I found that in fact, the video game industry it is a huge business managing billions of dollars, and that in order to create video game from just the game’s idea until the end step, a lot of different People with different educational background and training is needed. So, the questions now are, what part of this long chain of different positions I am interested for? What position within this multi-billions of industry will give me a major satisfaction? What position will give me the better income? Are universities or colleges in Puerto Rico offering courses for all these positions? Well, I think that I will only find answers researching more about the video games industry and those college in Puerto Rico teaching related course of study. I hope the next paragraphs will provide more information that helps to find answers about doubts in this field of video...
Words: 1669 - Pages: 7
