Video Game Industry Analysis
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 the fastest growing segments.
Industry Competitors by Segment
Segment Microsoft Sony Nintendo
Console XBox, XBox360 PS2, PS3 Wii
Games Third party Third party In-house
Handheld devices N/A PSP Game Boy, DS, DS Lite
Mobile gaming N/A N/A N/A
PC / Online gaming Xbox live N/A N/A
Interactive TV N/A N/A N/A
Industry’s dominant economic features
Market size and growth rate – More than $35 billion was spent on video games consoles, game software etc. Industry is expected to have more than $51 billion sale by 2010.
Numbers of rivals – The three main contenders are Sony, Microsoft and Nintendo.
Scope of competitive rivalry – Global presence with regional focus is required for company's competitive long term success.
Numbers of buyers - About 250 to 300 million people worldwide played video games in 2007. The average age of a video gamers has jumped to 33 years by 2005, and 25 percent of gamers were over age 50.
Degree of product differentiation – The larger the degree of differentiation, the more competitive advantage.
Product innovation – Product innovation plays significant role to capture market share and to take competitive advantage in the market.
Pace of technological change - New advanced technology plays a
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 the fastest growing segments.
Industry Competitors by Segment
Segment Microsoft Sony Nintendo
Console XBox, XBox360 PS2, PS3 Wii
Games Third party Third party In-house
Handheld devices N/A PSP Game Boy, DS, DS Lite
Mobile gaming N/A N/A N/A
PC / Online gaming Xbox live N/A N/A
Interactive TV N/A N/A N/A
Industry’s dominant economic features
Market size and growth rate – More than $35 billion was spent on video games consoles, game software etc. Industry is expected to have more than $51 billion sale by 2010.
Numbers of rivals – The three main contenders are Sony, Microsoft and Nintendo.
Scope of competitive rivalry – Global presence with regional focus is required for company's competitive long term success.
Numbers of buyers - About 250 to 300 million people worldwide played video games in 2007. The average age of a video gamers has jumped to 33 years by 2005, and 25 percent of gamers were over age 50.
Degree of product differentiation – The larger the degree of differentiation, the more competitive advantage.
Product innovation – Product innovation plays significant role to capture market share and to take competitive advantage in the market.
Pace of technological change - New advanced technology plays a