Technological Environment : Video Game Industry

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 video game developer have good capability in faster processing speeds, digital and high-definition graphics capability and on line connectivity to develop new game or new game-playing device, by those way, they can easily to attract extended consumer.

Although this specific program will likely not become available to average consumers, the same foundations for the simulation will be available on the marketplace while being affordable at the same time. In time, applied use of virtual reality such as the Oculus Rift will become mainstream and accepted in everyday life not only due its entertainment value, but also due to its affordability for consumers everywhere. Thoughts of virtual reality often resemble fantastical scenarios reminiscent of scenes in movies with similar themes like Gamer, The Matrix, Total Recall, and Inception. After one delves into the VR technology in products such as the Oculus Rift, one will begin to believe, and he or she will brace themselves for the tidal wave that is the paradigm shift of virtual reality.

To achieve a distinction, I will be exploring the future of the gaming industry on each of the various platforms.

To attempt counteract this cyclical slowdown, EB games have introduced an ever-growing variety of accessories with games to increase the revenue raising capacity of their respective consoles, as well as maintaining the loyalty and attention of a fickle gaming public. Some types of games have been released, with specialty controllers to great success, mitigating the expected lull in sales in the lead-up to new consoles. Recently however, the competition has become slightly skewed. Nintendo’s newfound dominance of the market is causing some headaches for Sony and Microsoft.

Virtual Reality is the newest cutting edge technology that is hitting the stores in massive amounts and taking over the video game industry. No one can deny that the technology is pretty impressive and fun to use. VR is accompanied with products such as the Oculus Rift that help the reality come to life. The Oculus Rift is a special type of goggles that is strapped to your face and allows you to view virtual reality games. With the direction and improvements in this field of technology, it can start to make you wonder how this can be shifted to be very beneficial to the society as a whole. With the uproar that Virtual Reality is causing in the video industry, how could it affect the medical and educational

Imagine a world, that is anything and everything. Race a dream car. Meet a superstar. Go to Paris, New York, London, or even see the Great Pyramids. A virtual reality - an idea that is coming to life, an idea that will change the world, whether it be good or bad. Ernest Cline, the author of Ready Player One, warned us that virtual reality is going to change the world. Ready Player One is a story about a teen named Wade, in a world where video games are everything. A virtual reality world called the OASIS changed the world into a place where people are antisocial and don’t care about the world anymore. Change with VR can already be seen with the invention of the TV, the phone, the iPhone, and numerous other inventions, It’s already happening - the world is blowing up over Vive, Oculus, Hololens, and more, and VR is going to make things happen: such as solving problems. Is change happening? Are problems going to be solved? Yes, we can already see change.

PornHubs entrance into the industry is a technological game changer. Whether anyone wants to admit it or not, Americans love adult entertainment. This obsession was responsible for the sales of the VHS to skyrocket in the 80's and then cable television in 90's. Oculus Rift could very well follow the same trend. Virtual reality has had its challenges over the past few years, but this could be the push it needs to send it to the top.

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

Threat of Substitutes: The main substitute for a video game console would be a personal computer. They can both be used for playing different types of video games and be used for entertainment. The threat of this substitute edging out video game consoles is very low, because they are not completely similar. If anything, video game consoles are edging out personal computers in the gaming industry. The threat of substitutes in the video game is not very high. In 2008, this was not a very strong force in the video game industry.

Future growth expectations for the Video Games industry have been significantly moderated, as the picture of the market for gaming on mobile platforms becomes clearer. Since mobile games are sold at much lower prices compared to traditional console and PC games, their rise may foretell a slowdown of the video game market in the United States. While the recent launch of the next generation video game consoles is expected to rekindle interest in the more expensive console gaming market, the rise of low-cost, low-margin mobile gaming market may weigh on the overall gaming market. Consequently, this is expected to pull revenue downward as consumers pay less per hour for gaming entertainment. Revenue is expected to reach $47.4 billion in 2019 as a result of the expanding population and an increased percentage of Americans

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).

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 video game console industry is a very competitive segment. This segment requires a keen eye on product development as well as strategic product marketing and a rather large logistics arm to ensure rapid distribution to targeted areas. Video game industry in the US, which is hugely driven by retail sales of software and hardware, registered revenues of USD ~ million in CY'2012. Even so with the advent of new video game players in the industry, the revenues decreased by 11.7% compared to