Video Game Industry (World Market) - Reading 04

"Structure and Competition in the U.S. Home Video Game Industry"

Dmitri Williams (2002) Structure and competition in the U.S. home video game industry, International Journal on Media Management, 4:1, 41-54

This article begins with a brief introduction on what it intends to cover, being the U.S home video game industry with its rapid growth over the decade this article focuses on internal growth within the United States and looks to pinpoint where and how this market has continued to grow to such an extent using multiple hypothesis and theories for such. This article covers some segments of the market too, such as consoles, handheld and PC-based games and the growth/differences between these markets. 

After such intro, the article brings the reader up to speed by giving a detailed account of the history of Home video games in the U.S mentioning the first-ever game invented in the U.S by Wally Higginbotham in 1958 who was a government nuclear research scientist, he invented a small tennis-like game which would later turn into the famous "Pong" game we all know today. It speaks about the first produced mass-marketed home game machine called "The Odyssey" in 1972 which was the first real attempt at having a sole machine run multiple games by inserting the game into the machine which also gave birth to the concept of removable media components. The next few years for the Market was bumpy as it was filled with multiple failed attempts and startups from a wide number of companies, the article mentions here how companies such as Nintendo, Sony and Sega all helped grow the market and each company at one point reached the current industry leader but each company failed to uphold their positions down to the poor management of each company, it goes on to speak for each companies case.

Moving forward we learn of the different market development within the Industry's segments, those being Consoles, handhelds and PC Games. We learn that PC games are used as a standard during markets development and most markets bounce or "intertwine" with the PC game marketplace. Consoles received a huge boost in market growth during the 90's period but it is noted in the article and details that due to multiple markets failures and bad use of company management that this segment did not reach its full potential at the same rate that PC Games did. The article briefly covers the "Vertical stages of the industry" speaking on and about Development, Publishing, Manufacturing, Distributing and recoil. The article gives detailed accounts for each stage and explains how these stages are vital for the growth of both a company and the market if it intends to succeed. 

"Innovations in the Video Game Industry: Changing Global Markets"

De Prato, Giuditta and Feijoo, Claudio and Simon, Jean, Innovations in the Video Game Industry: Changing Global Markets (June 30, 2014). Digiworld Economic Journal, No. 94, 2nd Q. 2014, p. 17

From what I can gather from the beginning of this article the Authers' are trying to showcase the key elements that account for the growth of the video game industry, to best explain their points they begin the first section of the paper summing up the main trends that are identified in a global landscape, namely the role of mobile games/applications and its effects on the market globally. In this section, they speak on how China and India are the fastest-growing mobile markets in the world and that these countries alone have shaped the framework of which mobile networks run today. It covers the release of the Apple iPhone in late 2007 which played a major role in the migration to mobile and wireless gameplay, The appearance of the iPhone also had an effect on its own, with such modern design tablets and smartphones began to adopted as gaming devices for casual game players, which in turn drove the demand for wireless games up.

The article moves on to cover the rise of the "App economy" which states that from July 2008-October 2013 the number of apps available for download/purchase on the apple store had grown from 500 to more than 1,000,000 with 60 billion downloads total. The mobile app market in 2013 was worth 27 Billion, and after 5 years of growth in 2018, it was worth 106 Billion and projected to reach 407 Billion by 2026 with all revenues generated directly from apps within the market. Asia is the most lucrative app market in the world with it being 41% of the total revenue generated globally back in 2013, which has since grown to 62% as of late 2020 in my recent findings. 

Lastly, this sections mentions the addition of android based tablets which have since helped expand the market considerably, including the Amazon Kindle and its successors, Google's Nexus and Samsung Galaxy devices all of which are more affordable than Apple products. These new Android-powered devices have seen the strongest growth in the market in recent years due to their more affordable and better optimisation for casual gaming. 

Top 20 Companies by game revenues (2012)

The second half of the paper shifts its focus to the changes in the global market and how the mobile market helped shape such changes. For years regions such as Europe, Japan and the US had been the main markets contributing to most of the video game market in 2009 but soon came the Asia-Pacific market which quickly overtook the market with the help of its online mobile segment. The Chinese online gaming industry on its own has caused changes such as the merging relation between Activision Blizzard and Tencent in an effect to reach more users in the Asia-Pacific region. Due to the huge influence that the Asian market has on the global market certain aspects such as Console based and PC based games have started to decline and in turn losing total sales due to the sudden change in market demand. 

Games sold for home consoles and handheld devices used to be the highest factures for markets such as North America but due to the influence of the biggest faster-growing markets in the Asia-pacific region, these markets have had to shift their focus points to the growing mobile market. Currently, Online games and mobile games are the biggest product segments globally.

"ENTERTAINMENT SOFTWARE: SUDDENLY HUGE, LITTLE UNDERSTOOD"

Alpert, Frank (2007), “The Entertainment Software Industry: Suddenly Huge, Little Understood,” Asia-Pacific Journal of Marketing and Logistics, Vol. 19, No. 1, 87-100.

This article's purpose is to find some sort of understanding and reasoning for the sudden growth of the entertainment software market such as video games and media alike. It clearly intends to find answers to certain aspects of the market such as what the market should be called/which elements actually affect the market as a whole and finally how stereotypes of the market have affected its growth recently, All of which are talked about with logical reasoning and fact-checking. We begin with a quick introduction into just the scale of how big the Video game industry has become in today's standards as it shadows and has overtaken the movie industry in its annual sales time and time again. We briefly cover the sudden expansion of streaming games and ESports as a whole which brings in almost identical revenue in comparison to events such as the Superbowl and alike. 

Something that helps facture into the scale of this market growth is just how well companies are doing financially, While the market as a whole is having huge growth it's still difficult for new small companies to join the market and have a major impact which means the main companies which contribute to the ever-growing market continue to grow due to lack of compaction, take EA, for example, In 1994 EA was a company with 500 million in sales and a stock market value of 1.8 billion. By 2004 it had grown and gained 3 billion in sales and a stock market value of 15 billion. Companies like EA, Microsoft, Sony etc will continue to grow as even if they have downturns or cuts in their market values, being such huge contributors to the market as a whole has made them powerful enough to withstand major losses, good example of this would be EA's lose in sales after its "microtransaction scandal" back in 2018.