APPENDIX
Tuesday, April 14, 2009
GAMING INDUSTRY OVERVIEW
Demographic
• Male 14-38 (globally)
• Growing female demographic
Political
• Rating standards for games with violence/sexual content
• Federal laws(in progress)-requiring ID’s for game purchase
Socio-cultural
• Web 2.0 (video sharing, blogs, wikis,web communities)
• Online Game tournaments
• Interactive experiences have growing demand
Global
• Online gaming
• Piracy in China/India
• Strict censorship laws in other countries
• Currency exchange rates
Technological
• 7 Generations of gaming consoles
• Developments in wireless telecommunications market
• Anti-piracy technology
Economic
• Recession-surge in gaming
• Video games provide more of an ROI than alternative forms
of entertainment
Source: Datamonitor, Games Software in the United States
Exhibit 1
Tuesday, April 14, 2009
Porter’s 5 Forces (Exhibit 2)
Threat of New Entrants:
LOW
Substantial startup costs
reduces the threat of new
entrants into the gaming
market
Threat of substitutes: HIGH
Music, movies, digital media, and all
other leisure activities that serve as a
form of entertainment are substitutes
Bargaining power of
suppliers: HIGH
Need for computer programming
talent,Intellectual property rights, and
challenge to produce highly
differentiated games
COMPETITIVE RIVALRY:
HIGH
High development costs and
dependency on blockbuster
titles creates a highly
competitive environment
Bargaining power of buyers:
Retailers: buying power is diminished by the
need to provide titles from all publishers
Consumers: Have access to multiple titles on
multiple consoles, which results in limited brand
loyalty, and low switching costs
Console Manufacturers: They own one of the
major distribution channels so they have high
bargaining power
Tuesday, April 14, 2009
SWOT ANALYSIS (EXHIBIT 3)
STRENGTHS
• Guitar Hero Franchise
• 2nd largest publisher in the industry
• Strong distribution channel (all consoles, multiple
retailers)
• Exclusive relationships with movie studios
WEAKNESSES
• Brand awareness