5 force analysis of the industry:
Who are the players?
The players within the video game industry are the producers.The Video Game Industry is made up of a large amount of companies. The big companies like Microsoft, Activision, and Vivendi Games thrive in the market whereas small companies like Midway, Acclaim and Konami hang on.
What do they do? Who competes with whom?
These companies all produce unique video games who compete against eachother for a piece of the billions of dollars within the market. Everyone competes against eachother, producing games for the internet, or systems.
Are there a few big companies or many small ones?
In the Industry everyone competes against each other for the best video game, but in the video game console segment the 3 leading competitors are Microsoft (X-box), Sony (Playstation), and Nintendo (Wii).
Microsoft Games
Vivendi Games
Activision
See corporation page for list of companies.
5 force analysis of the industry:
Potential Entrants; Technology corporations, advertisers, programing companies
(If technology companies like IBM or INTEL decide to enter the gaming industry, they already have the processing chips. An example is Microsoft who entered the market only several years ago)
Buyers; Video Game enthusiasts, Teenagers, College Students, Wholesellers
(Individual buyers do not have the ability to negotiate price on specific games, but the secondary used market make it cheaper to pruchase relatively new products. Big wholesellers, or retailers can bargain for cheaper price. A company can significantly profit through a contract with Walmart, therefore they can bargain to get cheaper prices per unit)
Suppliers; Programers, DVD manufactures, Computer technitions
(Suppliers would be the people creating the game content. The competition is large, as you have several companies competing against each-other for game rights. When a movie is released, it can be created into a video game. Who exactly get's the rights?)
Substitutes; Trading Cards Board Games, Inter-active television games (scene it), Plug & Play games, Free online games
(Many substitutes exist for video games. Video games can be played by yourself or with a friend. Playing online versus others means you are part of a network. Substitutes for this market can be trading card competitions like Pokemon, board games like scene it, those plug and play tv games, or any online free website that provides games. Yahoo, E-games, Candystand.com are only a few.
Industry competitors; Activison, Electronic Arts, Blizzard Entertainment, Yahoo, Pogo.com, Nintendo, Sony…
Personal Computers account for the majority of online play.
Who exactly are the competitors?
For 2008, Game Developer Magazine released a report inlcuding the top games developers, "Basing their rankings on sales figures, prolificacy, average review scores, and results from over 700 surveys issued to industry suits, GDR's list seems to be the most well-founded developer ranking we've ever seen." (Game Developer Research releases "Top 50 Developers 2008" report on 3/8/08)
See [http://www.joystiq.com/2008/03/08/game-developer-research-releases-top-50-developers-2008-report/]
The top 20 game developers are as follows:
1. Nintendo Kyoto (Brain Age, Wii Play)
2. Infinity Ward (Call Of Duty 4: Modern Warfare)
3. Blizzard Entertainment (World Of Warcraft: The Burning Crusade)
4. Electronic Arts Canada (FIFA Soccer 08, NBA Street: Homecourt)
5. Valve (Portal, Team Fortress 2)
6. Konami Japan Studio (Winning Eleven: Pro Evolution Soccer, Dance Dance Revolution Universe)
7. Insomniac Games (Ratchet & Clank Future)
8. Capcom Osaka Studio (Lost Planet: Extreme Condition, Monster Hunter Freedom)
9. Electronic Arts Tiburon (Madden NFL 08, NASCAR 08)
10. BioWare Edmonton (Mass Effect, Jade Empire: Special Edition)
11. Bungie Studios (Halo 3)
12. Ubisoft Montreal (Assassin\'s Creed, Naruto: Rise Of A Ninja)
13. 2K Boston [& Australia] (BioShock)
14. Harmonix (Rock Band)
15. Bandai Namco Tokyo (Ace Combat 6: Fires Of Liberation, Beautiful Katamari)
16. Square Enix Tokyo (Final Fantasy VII: Crisis Core, Front Mission DS)
17. Game Freak (Pokemon Diamond/Pearl)
18. Epic Games (Unreal Tournament 3, Gears Of War PC)
19. Hudson Soft (Mario Party 8, Mario Party DS)
20. Neversoft (Guitar Hero III, Tony Hawk\'s Proving Ground)
[http://www.wow-power-leveling.com/news/new20080309170920.html] posted on 03/09/08
4.8m - Halo 3 [Xbox 360] by Microsoft
4.1m - Wii Play [Wii] by Nintendo
3.0m - Call of Duty 4 [Xbox 360] by Activision
2.7m - Guitar Hero III [PS2] by Activision
2.5m - Super Mario Galaxy [Wii] by Nintendo
2.5m - Pokemon Diamond [DS] by Nintendo
1.9m - Madden NFL '08 [PS2] by Electronic Arts
1.9m - Guitar Hero 2 [PS2] by Activision
1.8m - Assassin's Creed [Xbox 360] by Ubisoft
1.8m - Mario Party 8 [Wii] by Nintendo
According to this 4/24/08 New York Times blog post, Grand Theft Auto IV (due to be released 5/1) is expected to sell six million copies in its first week and earn around $400 million. RDS
Data on Top Selling Games and Consoles
This blog from PC world reports NPD data: http://blogs.pcworld.com/gameon/archives/006324.html
Miniclip
According to its web site, Miniclip.com is the world's largest online gaming web site in terms of number of visitors. It claims "A community of over 43 million game players." Source: Miniclip 2008. About Miniclip. http://corporate.miniclip.com/about-miniclip.htm. Accessed 4/22/08.
An article in The Times reports that the company had revenue of "between £18m and £20m in 2007" (roughly $40 million) and "margins of about 35%." That means that the owners earn about $14 million a year! Source: Stone, Andrew. February 10, 2008. "Miniclip founder Robert Small shares his secrets." The Sunday Times. http://business.timesonline.co.uk/tol/business/entrepreneur/article3341684.ece. Accessed April 22, 2008
3 Biggest companies in the gaming industry:
Vivendi
Activision Inc.
Electronic Arts Inc
Industry competitors; Activison, Electronic Arts, Blizzard Entertainment, Sony, Microsoft, Nintendo.
