Essay about the videogames industry

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The video game industry has become a huge influence on society and the economy today. It is an industry that is so huge that it is estimated that 70% of U.S homes will own a Video game system by the year 2005, (Cassandra, 2002) Just one year away. But what made it the way it is? Since it is still an industry it has to follow the natural laws of economics. In this paper we will dive into the industry that now has gone beyond movies and recordings in profit.
The first is that the video game consol industry is an oligopoly and has to deal with the game theory. It is an oligopoly because it has high barriers to entry such as hardware subsidies and very fierce competition amongst
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Sony announced that at the end of 2004 it would release a portable, hand-held gaming system known as the Playstation player (Yabedo,2003) While the effects of this are unkown, one thing is for certain the the two arms of the console industry are going to have fiercer and fiercer compition as time goes on.
Another aspect we will look at is the demand of video games. Demand for video games is generated by many factors. The first is concept and graphics. There has to be some compromise between the two. While graphics in a particular game may be good, a weak story line can prevent from sales expanding as people may get board and vice-versa (Tanaka, 2001). The solution is to have an integration of a strong story line and up to date graphics (Tanaka, 2001). The second factor is that the video game industry is an industry that is totally based off of players (buyers) tastes (Stalker, 2002) For example if a game did not have a huge amount of popularity, it is unlikely to have sequels as the case with Bobsy the bobcat (Stalker 2002). However, take a game that has had a lot of popularity and hype and you could have a steady source of income from die-hards and entering fans (Stalker, 2002). While most games are aimed for a male audience, games aimed for a female audience have begun to emerge causing the audience to increase, and the demand (Chmielewski, 2002).
So we’ve
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