Ubisoft Executive Summary

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  • Topic: Video game industry, Game programmer, Video game
  • Pages : 6 (1066 words )
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  • Published : February 27, 2012
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EMBA 2010-2012, Group F


Industry’s structure – Porter’s five forces

Competitive Rivalry within Industry - HIGH
* Very attractive, dynamic market
* Large number of competitors
* High and innovative technology in use
* Sophisticated, cross industry creation process (Telco, IT, entertainment)

Bargaining power of Suppliers – LOW
* Games made-in house, by hired developers having access to necessary software and engine licenses * Fight for exclusivity on important game titles

Bargaining power of Customers – LOW
* Mass market, mass retailers, specialty stores
* Online purchases, electronic game distribution as the cheapest source * Large number of alternatives, low bargaining power

Threat of new Entrants – HIGH
* Little initial investment needed
* Little exit costs, no fixed assets (licenses, workstations) * Established brand not necessary - the most important part is game playability * Barrier size for major game releases - average size of production – 12 min $, 2 years development + marketing costs

Threat of Substitute Products – LOW
* Non-electronic entertainment
* Non corporate game creators
* Open source alternatives

Main opportunities and threats for video game industry


Partnership with film-makers, sport’s industries

New technologies (mobile, web-browser, Flash)

Cross-platform games distribution

Online and social network gaming

Shift of gamer profile – older and more woman,

Shift of business models in game advertisements

Games developed after blockbuster hits

Subscription games – new trend, access to cash

Consolidation and unification hardware platforms

Industry moving strongly toward online gaming, both for massively-multi-player concepts and for on-line multi-player versions of existing titles

Penetration of untouched markets by means of bundling

Electronic game distribution – global sales channels

Simulators game development (army industry)


Power of platform goes up – higher requirements, constant need to adjust equipment

Shift in gamers approach – now more casual games are popular

Shortening of a game life cycle

Increase in number of alternative games

Regulatory constrains – piracy phenomenon

High graphics demand, special effects, inclusion of movie stars –costs and profitability

High marketing expenses due to high competition

Regulatory restrictions against violent games

Capital investment, short life cycle, but long development phase, marketing expenditures

Lower cost competitor i.e. Nintendo

Antitrust issues in Europe

Likely evolution of the industry and future trends

* Intensity development of more online gaming
* Targeting new users and groups – woman, older people who have higher income than young generation * Consolidation of game producers – limited number of companies capable to sustain AAA games * Movement based games (WII Nintendo), innovations as a strong differentiator * More players – constantly growing market

* Less companies dealing with AAA titles, opportunity to enter market with “easier” games * Joint ventures of game and movie producers, big players able to secure lucrative exclusive contracts * Subscription based games

* In game advertisements, free games with product placement * Game exclusivity (killer games), some platform providers pay for game development by third parties How has EA generated such a strong position of leadership in the industry?

Building a sustainable business model
* Securing expensive exclusivity agreements for popular game themes NHL, FIFA, Harry Potter, James Bond, Lord of the Rings * Creating sequels, easy to reproduce and cheaper for marketing * EA had also developed strong franchises with The Sims and Medal of Honor * EA signed an exclusive licensing arrangement...
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