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Video Game Industry Analysis Essay

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Industry background The video game industry (formally referred to as interactive entertainment) 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. The growth is expected to leap-frog in the future. Following chart shows the projected market share by 2010 of different segment in the industry- Following chart shows growth of different segments in the industry- From the above charts, it is clear that the console is the largest segment in the industry, but online, mobile, pc software and broadband are some of…show more content…
The online console gaming market is set to take off, as the new generation of consoles arrive with advanced networking and online gaming capabilities. The ability to download game demos, buy casual, as well as full-fledged console games, and access advanced content, including high-definition (HD) video, will play a major role in shaping the subsequent console generations. Key success features - Rich playing experience - Appeal and variety of supported games - Product innovation and differentiation - Keep up future changes Porter’s 5 forces competitive analysis Threat of new entrants: Low. It takes lot of resources and capital to enter into this market Bargaining power of Buyers: Moderate. Buyers hold moderate bargaining power because of low number of competitors and high switching cost Threat of substitute: Moderate. Interactive entertainment substitutes are not that many. Bargaining power of suppliers: Moderate. There are not many companies that the suppliers can supply to. But on the other hand the game development companies can have more power by developing specific games. Competition among industry rivals: Strong. There is intense competition among Sony, Microsoft and Nintendo for market share. Strategic Group Map Following chart shows the position of each product in the video gaming
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