Video games conquering new markets - Essay Example

Video games conquering new markets In today's market economic condition, digital enterprises are playing a larger role in promoting global trade and new business opportunities. Introduction of digital technology has completely changed the basic face of the traditional sectors such as print media, broadcast, film, music and entertainment sector. The changed global business platform demands a different approach to satisfy the customer demand. Technology has played a major role in deciding the customers' choice. It is in the media industry that the concept of digital enterprises has made a dramatic footing. The new global business environment has seen a cross industry competition, where companies need to compete not only with their counterparts but also with players in different platform. The war is for their pie in the one of the largest growing markets of the world- the entertainment industry. There are a large number of sectors in this industry such as print media, broadcasting media, film, music, telecommunications, cables and internet service providers. As competition becomes harder, convergence has been the trend of the industry. All sectors are working out plans to include more services into their kitty to add value to their customers. The content is the competitive edge in this market scenario. All players are busy to improve their contents. Companies are diverting more funds to research and development department to address the increasing need of customers in a bid to retain customer base and revenue growth. Entertainment is not a leisure thing now, it is a serious sector and people mind value for it. According to Wikipedia, the free encyclopedia in the internet, video games are computer based games where video display such as monitor or television is primary feed back device. These games will have rules and goals.In more open-ended games the player have the choice to do whatever they like within the confines of the virtual universe. It is interactive also.There are computer games and console games. While computer games can be played in personal computer, console games are played in specifically designed set top box. Video games can be played on a device that plays through television, computer mobile phone or any handheld devices supporting it. The first primitive computer and video games were developed in the 1950s and 60's and ran on platforms such as oscilloscopes, university mainframes and EDSAC computers. The earliest computer game was created in 1947 by Thomas T. Goldsmith Jr. and Estle Ray Mann. (http://en.wikipedia.org/wiki/Computer_and_video_games) Other than conventional media sector, the digital technologies have given new spurt to a most exciting entertainment industry- video gaming industry. There is lot of reasons which helped the video gaming industry. The fast growth of technology, globalization and liberalization of market, increasing level of stress in life and working conditions, self imposed house arrest life style, weakening social relations, increasing individuality and privacy consciousness are all helped the emergence of gaming industry in the world. People, especially children have been looking of new means spend their leisure time. Technology has offered them lot of comfort in their homes. At the same time, gaming provides more possibilities to enjoy the pace of the moving world. They have been longing for a long time a channel to link their imaginations, dreams, passions and story tales with reality. The emergence of video gaming offered them an opportunity to realise this dream with technological support. Also emergence of other digital enterprises such as broadband, telecommunication, internet and cables has also worked as a catalyst for the gaming industry. With markets grown beyond nationalities, gaming has also got a global look. The gaming industry is now looking forward lot of market potential in emerging economies such as India, China and Brazil. The emergence of internet and networking into a global platform offers considerable prospect for gaming industry. This will in turn help digital enterprises to increase their market presence all over the world. DFC Intelligence, a strategic market research and consulting firm focused on interactive entertainment and the emerging video game, online game, interactive entertainment and interactive television (ITV) markets in their market study forecasts the potential of online game market integrating into existing video game and interactive entertainment market. One of the key areas of interest in today's market is how important will online games be for the new console systems coming on the market. (David Cole, Console Makers Online and On Top, http://businessweek.com/print/innovate/content/apr2006/id20060405_550846.htm) The report says that online games will become an important feature feature for console systems over next few eyars. Over the past six years, all facets of online games have come a long way. However, online games are nowhere close to being the tail that wags the dog that many were predicting. (David Cole, Console Makers Online and On Top, http://businessweek.com/print/innovate/content/apr2006/id20060405_550846.htm) Nintendo, Sega Gnesis ,Super NES and Game Boy were some of the major players in this industry in the early stage. The PC Engine was the popular system in the late 1980's but it lost out to Super Famicon as a user base to support new games. CD-ROM drives were first seen in this generation, as add-ons for the PC Engine in 1988 and the Megadrive in 1991. Then Basic 3D graphics entered the mainstream with flat-shaded polygons enabled by additional processors in game cartridges like Virtua Racing and Starf. In the mid 1990's Sony entered in the video gaming scene with a new product PlayStation. Nintedo was the market leader that time. But Sony's technological and marketing upper hand had dethroned Nintedo from the market in the late 1990's. The year 2000 witnessed dramatic changes in the video games industry. The competition has hot up with new players entered the scene. Microsoft has entered the videogame console industry with a new home console, the Xbox. Nintendo and Sega also came out with new game . Mobile phone maker Nokia has entered the handheld market with its N-Gage QD IN 2004. Now Xbox.360, Nintendo DS and the PlayStation Portable (PSP) are some of the most popular video games At the same time understanding or realising the vast potentail offrered by digital video games, players in telecommunication and internet sapce have been restructuring their contents to accommodate video game. They have introduced these services as more than entertainment. It is now infotainment concept catching up among the players. Earlier video games were considered as a tool for children. The market research and potentail study were constrained to fulfil their demand. But now scenario has totally changed. Cellular operators in many developed markets are now offering digital based video games for their customers as a value added service. In the internet landscape, Google Inc has been introducing more innovative video based contetns to address emerging need of their customers. The industry has now accepted the fact that there should be more focused approach on video gaming in this highly networked and global business scenario. According Adam Singer, member of the Ofcom Content Group and Group CEO of MCPS-PRS AllianceGames are going through a struggle to find a voice. While films took its time to develop a language, the growth of game and their containment in arcades, on platforms or cartridges is analogist to the early box containment of films. Broadband is to games what projection was to movies."(Keith Stuart, Stories, truths and eroticism - can videogames deliver, Friday Philosophy, Games Blog) Adam Singer says that games industry has positioned itself as a "teenage rebel" of the entertainment milieu. He suggests that games should come out from the box of entertainment to get mainstream acceptance. As Singer suggests: "The definition of a medium is to be able to communicate three things; stories, truths and eroticism. If you can't do all three things, then you're not a medium." (Adam Singer, Edinburgh Interactive Entertainment Festival, Guardian Unlimited Blogs, August 12, 2005) The penetration of computer in to the daily life of people has been instrumental in popularizing videogames. They are using computers to invade in a different world, where they can play or experience creatures in their dreams or characters they had read in fictions. It gives preassure for them as an individual. It is not only children but elders are also longing for such dreamy mind mood. Video games provide them an environment to enter into most exciting and imaginative space. It provides natural environments, with their real-time, interactive display. So the market potential for video gaming industry has no national barriers and caste, creed, race and economies. The most attractive feature of the video games is its customer friendly nature. It was created in such a way that even a three year old or an illiterate can play the game and enjoy it. Video game industry always looks ways to introduce products to address different needs of customers. A beginner's video game would be quite different from products addressed to more experienced customers. At the same time jobs within the video game development industry are also constantly changing. The jobs in the video gaming industry are constitute four different sections such as design, art, programming and testing. (The Next Big Thing, Chapter 3, Greater Baton Rouge Lousiana Technology Park) Another important factor in the gaming industry is management and marketing of products to suit global needs. In the macro level though video games offers lot of market potential there has been no concrete efforts to makr use it. Generally video game companies are concentrating on developed markets and they don't have a global perspective. It is imperative that industry should look beyond conontinetns to offer more customer based products to expand market presence. Though internet has opened new vistas for market penentration, it was only online communication compnies, which had made use of it. It is a fact that customers in the developed market get variety products and contents through internet. But it has not reached at global level. The major market lies in developing countries, where technology is making dramatic changes in the culture, spending and outlook o f the population. The gaming industry has to realise this growth potentail and try reach out in these market with suitable product. Customisation of products in the local level would play wonders. The network has a major impact in improving standardization of products. Standardisation will increase when there are network effects. Network effects have complementary relationships in value creation among adopters of a common standard. According to Victor Stango in Economics of Standard Wars, the existence of a strong direct network effect pushes the market toward adoption of a single standard, because adopters benefit most when all users are on the same standard. In the video gaming industry if the internet and broadcasting offer a more direct network. It will enable players to directly reach out at market with standardized products. The video game industry should try to bring in standardiasation of products in global scenario. Once there is standardization, they can regularly introduce products intended for global market. There is also an indirect network effect. This network effect arises in markets for video game consoles. Here adoption might ultimately others. For example, greater adoption of Playstation consoles should generate greater variety in Playstation game titles. Widespread adoption allows producers to achieve scale more easily. (Victor Stango, The Economics of Standards Wars, Review of Network Economics, Federal Reserve Bank of Chicago) Pricing of the products is another problem. Most of the gaming products are priced at higher level and customers find it difficult to subscribe it at affordable price. But at the same time there are not much committed efforts from major industrial groups to increase the popularity of online games.The three big hardware manufacturers such as Microsoft, Nintendo and Sony are only trying to sell as many hardware systems as possible to build the largest possible installed base. They believes that online games are only effective to the extent if there has been enough installed base.At the current marketing condition build and maintain an online service is quiet expensive. While Microsoft has specific plans for online gaming other two plaeyrs have not shown much enthusiasm in investing heavily in online games. (David Cole, Console Makers Online and On Top http://www.businessweek.com/print/innovate/content/apr2006/id20060405_550846.htm) Actually video game industry is now looking for new areas of revenue growth such as advertisements. They want to understand the role of commercial-skipping digital video recorders (DVRs) like TiVo and potential of placing advertisements on video games and throughout the Internet. This approach would eventually increase competitiveness of gaming products. In today's market conditions companies need to find out newer alternative other income sources for products to reduce price of final products. Advertisements could play a vital role in reducing price for game software. Video game industry should focus their thrust on accessibility, price, customer friendly, new channels for promotion and market expansion areas to popularise video games all over the world. Another option for the video gaming industry is interconnect two technologies or platforms from different forms of media. Industry should try to find ways to provide gaming products through popular channels such as cables and internet. The popularity of internet chatting rooms tends to think that why industry not offering not contemplating ideas to provide gaming rooms in the internet The gaming is not at all a recent phenomena. From the beginning of the human civilizations games are there. It was growth of electronics and digitalisation, which gives new momentum to this industry. And it has miles to go to conquer larger markets. A game represents a man's appetite for wanton, consequence-free destruction, ethical values, prejudices, ideals, relationships and avoids monotonous in life. The technology has made the gaming in such a way that it can also improve the quality of thinking, decision making and imagination level. But today's gaming industry lacks independent game makers. A serious and committed player in the industry could change total size of the gaming industry. Proper use of technology, more stress on marketing and pricing, customization of products and understanding different market conditions are the major challenges before video game industry. In the next few years we can expect major advancements and see worldwide acceptance of games. The players will look out for convergence of technologies to support growing market demand. Meanwhile the emergence of video game industry would open new set of challenges for regulation. Already there has been lot of controversy over the impact of video games over children's psychological problems. It is said that is said that depiction of graphic violance, sexual thmes, racism, advertising, and other sensible things in computer and video games have creating lot of problems in young minds. There has been demands for censorship in video games. There are also chances that governments world over may bring in legislation to regulate the contents of video game. It has tobe viewed that how this will affect the growth of the industry. Video and computer games are periodically criticized in the media by some parents' groups, psychologists, religious organizations, and politicians for the level of violence, cruelty, and crime that some games allow players to act out, and often glorify. Examples are common, including Mortal Kombat and its sequels, a series of fighting games by Midway. Since 1992 the series has rewarded players for beating up an opponent with martial arts moves, and then for executing a graphic "Fatality" move. Considering the fears of these groups video game industry have started voluntary rating systems, such as the ESRB rating system in the United States and the PEGI rating system in Europe, that are aimed at educating parents about the types of games their children are playing, or wish to play. Some games such as the Grand Theft Auto series are rated as "Mature" or "Adults Only" in the US, or given a "Certificate 18" rating in the UK. There would be notes in the packaging that these games should not be sold to children. If a parent or legal guardian buys a mature game for a child and the parent/legal guardian gives permission to a child to play said mature game, it is by the parents' choice and is not considered an offence. (http://en.wikipedia.org/wiki/Computer_and_video_games) But what ever be the government thinking, it is a fact that entertainment industry in the world is growing today at a faster pace. The consumer interests are changing fast. People want new technology based products. The video game industry has every potential to grow to larger level. There has been a huge market in both developed and developing countries. The digital technologies have the potantial to change life of a man. Now video games are not confined as an entertainment. It is turning out to be infotainment sector. In coming periods major players will come out with products which address the knowledge ambitions of the consumer. History, science, literature and politics will be taught using video games. Beyond boundaries human beings have a common urge for knowledge and entertainement. The most challenge before the industry is to integrate knowledge with gaming to find out new avenues of growth. There would be also a price war in the sector with players offers high quality digital system based video games at lower prices. The huge market spread across the globe will help companies to introduce innovative products and increase total market share. Reference: Adam Singer, Edinburgh Interactive Entertainment Festival, Guardian Unlimited Blogs, August 12, 2005 The Next Big Thing, Chapter 3, Greater Baton Rouge Lousiana Technology Park) Victor Stango, The Economics of Standards Wars, Review of Network Economics, Federal Reserve Bank of Chicago http://en.wikipedia.org/wiki/Computer_and_video_games http://www.businessweek.com/print/innovate/content/apr2006/id20060405_550846.htm) http://www.vxm.com/21R.107.html http://www.businessweek.com/innovate/content/mar2006/id20060316_712388.htmcampaign_id=search http://reviews.cnet.com/4520-8900_7-5600201-1.html http://www.businessweek.com/technology/content/mar2006/tc20060316_363037.htmcampaign_id=search Read More