It's about the FUTURE and the KSF in the GAMING INDUSTRY. Based on actual market research data (Gardner, PwC, etc.) answers mainly to two questions: (1) How the ENVIRONMENTAL CHANGE of the gaming industry of the next years will be? (2) What are the KSFs IN THE GAMING INDUSTRY of tomorrow?

1. RIVALRY IN VIDEO GAMES
Rivalry in Video Games
Tuesday, November 13, 2012
Dragosh OTTO

2. CONTENT
1. Definition and Facts
2. Timeline Consoles
3. Future Console and PC Games (Cows)
4. Future of Mobile, Wireless, and Social Games (Stars)
5. Environmental Change
6. Conclusion
Rivalry in Video Games
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Tuesday, November 13, 2012
Dragosh OTTO

3. 1. DEFINITION AND FACTS
• Electronic game, also called computer game or 12
Source: PwC, 2012
video game, [is] any interactive game operated by 10 10,5 10,7
Average hours spent per week
computer circuit. (…) The term ‘video game’ (…) 8 8,9
can refer more specifically only to games played on
6 6,8
devices with video displays(…). (Britannica Online 6,3
Encyclopedia, 2012) 4 4,9
3,8
• Consoles are no longer the only game in town. 2 2,7
1,8 2
1 0,8
(The Economist, 2011) 0
Console Online on computer Wireless
(portable, phone, tablet)
• Online and wireless games will boost video games. Light Gamers Medium Gamers Heavy Gamers TOTAL
(PwC, 2011)
• Videogames market 2012 is $67bn, growing to
$82bn in 2017 [22% growth potential]. (David Cole, 120
Source: Gardner, 2012
112
DFC, 2012)
Gaming industry prognose in bn$
100
97
• Online games market $19bn in 2011 (…) to reach 80
74
$35bn by 2017 [84% growth potential]. (David Cole, 60
57
DFC, 2012) 51
40 45
• The ongoing economic weakness induced gamers 20 25 21
27 28
18
to shift to less expensive, online and wireless 0
12
options, cutting into the high-priced console game 2011 2013 2015
Gaming Software Gaming Hardware Online Gaming TOTAL
market. (PwC, 2011)
Rivalry in Video Games
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Tuesday, November 13, 2012
Dragosh OTTO

4. 2. TIMELINE CONSOLES
NES: quality, performance, controller “specifically aimed at women, families
Atari Pong, and those who had never played video
1972 games before.” (The Economist, 2011)
Sega Genesis: better graphics,
relationship with developers
Atari 2600: exchangeable games & “gaming started to move from niche to
first commercial hit mainstream “ (The Economist, 2011)
Source: Infographic Design, 2012
Rivalry in Video Games
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Tuesday, November 13, 2012
Dragosh OTTO

5. 3. FUTURE CONSOLE AND PC GAMES (COWS)
• Interactive multimedia platforms with
various capabilities (e.g. online, Kinect).
• Games need to be immersive (PwC, 2012), to
be simulations of the real world. (The Economist,
2011)
• Awareness of e-sports – video games
played professionally (Halo 2, StarCraft). Source: www.mashable.com
• Game production cost cutting is a KSF
for platform developers. This attracts
game developers. And they attract more
customers, means $ & .
• Smart & innovative business model.
OUYA open console for $99 on
Android OS will be launched in 2013.
Financed by crowd funding Source: www.ouya.tv
(kickstarter.com) they raised $8.1m.
Rivalry in Video Games
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Tuesday, November 13, 2012
Dragosh OTTO

6. 4. FUTURE OF MOBILE, WIRELESS, AND SOCIAL GAMES (STARS)
• Now the ever-increasing computing power of mobile 50
Source: PwC, 2012
phones has put the means of playing games. (…) 40
Far more computing power than the original
PlayStation. (The Economist, 2011) 30
Billion $
• Gaming is in fourth place (42 percent), and appears 20
more popular than checking the news (40 percent) 10
and listening to music (40 percent). (Gardner, 2012)
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
• Price is much lower. Mostly for free. (Farmville)
Online/Wireless Console/PC
• Number of games on App Store and Co. are incomparable to consoles. E.g. App Store offers 128000 games, representing
18% (148Apps.biz, 2012) , Android Market 48244 games, representing about 15% (www.androlib.com, 2012).
• 64% of users who downloaded an [iOS] app in the past 30 days have downloaded a game. (Stan, 2012)
• 52% of all worldwide end user mobile sessions were spent in games. (Farago, 2012)
• “(…) the rules of competition have changed dramatically, arguably creating the most open, egalitarian market in the
history of video games”. (Farago, 2012)
• Purchase is easy. App Store 35bn, Play Store 30bn downloads in less then 5 years.
• Production costs for developers can be low. Focus on game player excitement.
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Tuesday, November 13, 2012
Dragosh OTTO

7. 5. ENVIRONMENTAL CHANGE
Games & devices Customer
1. Single platform -> multiplatform 1. Product -> service (PwC, 2012)
Exclusive console -> every console, PC & mobile. (PwC, 2011) Buy a game -> enjoy the time (online game platform).
2. Dedicated device -> standard platform 2. Hardcore gamer -> casual gamer
Atari (console) -> Xbox 360 (console, internet, DVD) -> iPhone (phone, Gamers will individually spend less hours playing (mean).
internet, email, player, gaming device, banking, ‘an app for everything’).
3. Young -> mature
3. Proprietary physical -> standardized online
The average game purchaser is in the US is 35 years. (ESA, 2012)
distribution
Cartridges -> CD, DVD, Blue Ray -> online. 2017: 39% of revenue. (DFC, 4. Male -> equilibrated
2012)
47% of the US players are female. (ESA, 2012)
4. High production costs -> lower costs (mean)
5. Individual gamer (offline) -> social gamer
Few big productions -> many small with some big productions (online)
5. Low version rate -> high version rate ‘Home alone’ -> ‘available’ friends (62% play with others).
6. Asia will gain importance. 6. Marketing driven -> network driven buying
China overtakes Japan (2nd in market size) in 2011 and will probably
decision ‘Word of mouth’ (PwC, 2012)
reach the US (biggest) gaming market by 2017. (PwC, 2011)
Rivalry in Video Games
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Tuesday, November 13, 2012
Dragosh OTTO

8. DRIVING INNOVATION IS THE KSF IN THE GAMING INDUSTRY
• Resources & competences
• Attracting capital – VC, crowd funding (e.g. OUYA), in game advertising, in app
purchasing.
• Attracting HR – efficiency, creativity, and know-how.
• Realizing collaboration partnerships in order to enable innovative products.
• Attracting new customer segments (e.g. PlayStation, Wii, etc.). (The Economist, 2011)
• Technology
• Be up to date (with respect to cost/value ratio).
• But control your costs.
• Intuitive interfaces for customers.
• Ideas, visions embedded into a feasible strategy because:
Nothing is more powerful than an idea whose time has come.
(Victor Hugo)
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Dragosh OTTO

9. SOURCES
• App Store Metrics; 148Apps.biz; Nov. 2, 2012.
• Essential Facts About the Computer and Videogame Industry; ESA; 2012.
• Gartner Survey Highlights Top Five Daily Activities on Media Tablets; Gardner UK; July 3, 2012.
• Global entertainment and media outlook; 2011–2015; PwC; Aug. 2011.
• New Market Entrants Exert Greater Influence on U.S. Entertainment and Media M&A Activity, According to
PwC US; PwC US; Jan. 24, 2012.
• The evolution of video gaming and content consumption; PwC, 2012.
• Britannica Online Encyclopedia; 2012.
• Infographic Design (http://www.infographicdesign.org); 2012.
• Cole, David: DFC Intelligence Forecasts Worldwide Video Game Market to Reach $82 Billion by 2017;
PRWeb; July 16, 2012.
• Cross, Tim: All the world’s a game; The Economist; Dec. 10, 2011.
• Farago, Peter: Indie Game Makers Dominate iOS and Android; Flurry Analytics; March 06, 2012.
• Peterson, Steve: Game Industry Forecast Shows Solid Growth; October 12, 2011.
• Schroeder, Stan: Mobile Games Dominate Smartphone App Usage; Nielsen; July 7, 2012.
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Dragosh OTTO