Part A: INDUSTRY INFORMATION
1 . Economical Features
Market size and Growth Potential (as of 2003):
* The video game industry happens to be a $31 billion global market. 2. Market size has tripled in benefit over the last decade from $12 billion in 1995 to $31 billion dollars as of 2003. * In five years the market is expected to grow about 14. 8% ($36, 042/$31, 374), at a rate of approximately installment payments on your 96% per year (14. 8%/5). * We all feel that the industry is entering the first maturity level of the growth cycle intended for the overall global market. 2. Some observers feel that development potential can be massive, predicting that the video game market is " on track to rival the movie, music, and television industries" * Even more analysis uncovers that a lot of markets in the industry such as console software and hardware are on the decline regarding growth, while the portable gaming sector is currently in the rapid growth stage with the growth cycle. * The mobile gambling industry can be expected grow to roughly 6 times its current size in only 5 years ($587/3783). * This most implies that the industry's development prospects focus on emerging systems such as portable gaming and online gaming where there is much less industry saturation and maturity
2. It is estimated that you will find currently 400 million gamers around the globe. 2. Up to 75% (300 milliom/400 million) of gamers are believed to be В‘very frequent' players and therefore contribute to the majority of profits by purchasing upwards of 10 fresh games yearly. * Most gamers happen to be between the age range of twenty and 45, with the average gamer age group rising. 5. From a geo-demographic point of view the rising markets of online and portable gaming are currently experiencing their very own rapid growth in the South Korean and Japanese consumer market segments.
* The video gaming market is lead by a fairly small number of video game producing corporations; Sega, Activision, Acclaim Entertainment, THQ, Fiat, Nintendo, Microsoft company, and Electric Arts. 2. Microsoft and Sony are the market leaders for the console equipment market although other companies including Sega and Acclaim presently only concentrate on gaming software (i. electronic. Games). 2. The game playing competitive scenery is practically worldwide except for Africa * Recent substantial growth in mobile and online gambling has likely attracted the attention of will be competitors.
5. Gaming computer software products happen to be compared with on many platforms including quality, game features, timing of releases, brand-name recognition, use of distribution stations, and pricing. * Competitor products have become more differentiated as the larger companies are planning to separate themselves by entering licensing agreements with professional sports associations (e. g. NBA, NFL); TV areas (ESPN), film studios (Disney) to better enhance the perceived position of their online games. * R& D merchandise innovation is important, as game titles must keep up with the rapid technological advancements of video gaming consoles and also to keep up with the latest athletic season, or type of a well-known comic series.
2. The speedily advancing acceleration of the processing capabilities of gaming console devices has compelled the game makers to likewise keep pace with the advances in bit-graphic technology. 5. Each new generation of consoles (e. g. Playstation 3 or xbox 2, PlayStation 3) needs that a new generation of games always be produced likewise to supplement the new devices.
Economies of Scale and Experience Shape:
5. Notably, intensive advertising is increasingly becoming essential to create mass-market demand for premium games and as a result the smaller video game producers are experiencing difficulty competing with the richer industry giants. * Proven industry firms (e. g. Nintendo) frequently have the advantage of better-established relationships with retail stores and also other members of the value chain...