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motion detection and intuitive usage. It has low cost hardware and software hence is lowest prices compared to other consoles. It has a high demand and available worldwide. The console is interactive and many people can play at once hence is appealing to all age groups. Its easy to use because of its menu being a lot like TV channels.One of the biggest strength is the brand name of Nintendo.
non-gamers are being introduced to the game industry through Nintendo. Unique The Nintendo Wii, which is their most updated console, sold 5.84 million units in the first five months in its launch alone. This system consists of motion sensors attached to the end of the controllers as well as the console, which makes the games more interactive.
• Joystick liability • Limited selection of software
Sub par online system is free, but so is the PS3's the new Nintendo Wii console is under such high demand that the manufacturers are not able to supply the key components or assemble the products fast enough creating a lack of finished products to be sold. It is assumed that this shortage will have a sizeable affect on the company’s overall revenue.
Joystick liability Limited selection of software Trailing in online war – Xbox has Xbox live (but you have to pay) , PS3 Online Graphics – weakest graphic card of the entire group No HD (Xbox and ps3 both HD) Limited supply
• Penetration of new markets in ME / Europe / Asia • Marketing to novice gamers including seniors and adults
The last threat to Nintendo products is their poor durability. To prevent this. Having problems such as these results in recalls. SWOT Analysis for Nintendo: Strengths: -Specializes in game consoles -Brand loyalty for kids up to adults -Japan's 3rd most valuable listed company with market value of $85 Billion -Sold over 453 million hardware units and nearly 2. which is a very lengthy and expensive process. The Nintendo Wii controllers have had the most significant problems when it comes to this.2 billion software units worldwide -Consoles are priced relatively cheaper than competitor's products -Created Nintendo Wii. with only one color -Additional hardware such as controls can be expensive choice Opportunities: .Quality third party support better online system Threat • Loss of potential customer because of lack of software selection and sophistication of games. Nintendo must confirm that all products are being properly designed and manufactured prior to release. the Wii controllers have not been properly designed resulting in the controller flying from the user’s hands and into televisions sets. the first of its kind in the industry -Super Mario Brothers is known worldwide and is a symbol for Nintendo -Distributed worldwide -Sensitive to their human resource issues. motion sensing idea jacked Don't own motion sensing software – other companys will compete Price drops from competition Microsoft/Sony 'Wii Remotes' Wii's Appeal fads. helps workers balance home/work life -Capable of having multiple players play at once Weaknesses: -Graphics are not visually as sharp and realistic as other consoles -Games costs about $50 each. can be pricey for children -Nintendo consoles are usually bland looking. In many circumstances. • Software developers abandon game development because of lack of adequate profits.
The challenges faced include the obstacles we face in the changing ways games are made. while the Playstation 3 usually allows only up to 2 players to play at once. Challenges: Gaming is a business that has always been able to claim a good record in the face of change and yet. so choice is dependent on age. Meanwhile. never quite good enough. unless playing online. constantly offering value and innovation. while staying open to newcomers and technology-innovators and must continue to seek ways to monetize their current games through additional sales downloadable items. Many games for the Wii allows up to 4 players to play together. the shifting profile of consumers. marketed and sold. . The Playstation 3 is geared towards an older audience. new competitors and strange technologies. at about $50 per game versus the average $65 per game for the Playstation 3. slick offerings to market. while Sony Playstation 3 has a set retail price of $499. making the Nintendo Wii much more affordable to consumers. testing the market with new ideas and business models. while the Playstaion 3 is played using the traditional control method. Both consoles are strong and appealing to consumers. Also. The interactive nature of the Wii is it's biggest selling point because it is the first of it's kind in the industry.-Can improve upon current Wii system to make it even more interactive and fun -Can create sharper graphics -Future consoles are focused on more interactive technologies Threats: -Competitors can come up with interactive system -Competitor's consoles can provide even more realistic graphics -Strong competitors in Sony and Microsoft Product Comparison: Nintendo Wii vs. the industry should embrace the dominant players. with visual graphics much more realistic and game content more violent and life like. with gameplay much more simple and graphics more childlike. taste. and buying power of the audience. The Playstation only requires a standard control for its games. The Nintendo Wii is marketed to a much younger audience. The Nintendo Wii requires additonal purchases of Nunchuks for certain games. Digital Distribution Revenues from full-games digitally distributed have increased so much that entire companies are now building their strategies around non-retail futures. A steady growth in digital distribution can be achieved by innovation and fierce competition which brings a variety of compelling. Sony Playstation 3 The Nintendo Wii is set at a retail price of $250. and those can be quite costly. The games that Nintendo sells are also sold at a lower price. so purchases are usually one time only.
These consoles are too expensive. new reams of consumers will be available to mine hence manufacturers must try to bring price-cuts. Charging a customer according to his or her attachment to a game makes sense. Piracy is a major concern. who have been brought up to appreciate games as entertainment and as art. Companies must invest heavily in local expertise in order to profit from these markets. these markets represent enormous challenges.and yet they still play a relatively small role in our overall culture. for example. and difficult to penetrate. Demographics are young and offer a huge potential for the gaming industry. In the next few months and years. Micro Payments Selling a basic game cheap – or free – and making money from extra sales is a very new model. However. Overpriced devices have been created crammed with innovations which. Indonesia. Celibrity connect Videogames play a big role in the entertainment lives of millions of people – not just selfidentifying gamers . If a player wants to play . arguably. actors. and publishers are rightly cautious. prices for these consoles will come down. requiring larger teams and longer development schedules. Although it has worked successfully in Asia. with massive population and income increasing rapidly. There is no doubt that videogames lend themselves well to this way of doing business. even now as we enter the middle years of their lives. Hardware Pricing The complexities of PS3 and Xbox 360 have raised the price of games consoles to levels that were previously assumed to be deadly to growth. writers and other personalities. singers. The preferences of gamers in these countries vary considerably. will begin to seek inroads into games. Increase in Budgets Games have become more sophisticated. They are usually bureaucratic in nature. Now celebrities. have little to do with games. Their economies are unstable and erratic. demand for entertainment is on the rise.Emerging Markets Targeting and analyzing the new emerging markets such as China. Individual publishers and the industry as a whole cannot afford to be caught with too many expensive howlers and must therefore mitigate the chances of disaster by releasing smaller titles with less exposure or franchises that have a dependable history of returns. Chinese gamers. India and Brazil. it has yet to prove so righteous in the West. play different games and display unfamiliar gamer habits.
demand novelty. gamers are extremely wary of in-game sales that alter the balance of the game itself. great games that are deliberately priced at what used to be dismissed as a ‘value’ or ‘budget’ level. new talent or new IP without massive risk. and then been discounted as their popularity waned. if the right experience is sold to them. Online distributors of PC games are becoming more popular. These are not consumers who ‘become’ gamers. The industry is going through a very tough learning curve in keeping non-core gaming consumers happy. New Platforms. such as Orange Box. social gamers etc. but consumers of mass entertainment who sometimes play games. Console manufacturers are easing their restrictions on downloadable game sizes. the opportunity exists to create artful. Short games can represent great value especially when distributed as part of a bigger package. mini-games. This allows for experimentation and. or distributed online.new tracks. Smaller games allow developers to explore new gameplay ideas. There are significant challenges. they all offer a variety of pricing challenges. The first is to create a balance between what is subsidized in the initial offering and what is offered as a paid extra. Also. Facebook members. Consumers. mobile gamers. Releasing a free game with so little content that it fails to stick is a flawed startegy. hardcore or otherwise. Now. this ought to be made available commercially. The business is learning to compete outside its own space. Potentially. It points towards a business model that allows for multiple-failure. with any luck. or buy a special outfit. Or they have been created purposely at a lower quality threshold in order to appeal to a certain lowbrow market of wannabe huntsmen or cardsharps. It allows them to create games that don’t quite have enough content to justify fullprice. New Consumers The core game industry has usually been slow to fully appreciate new non-hardcore platforms. but rewards success grandly. In the past. lots of ideas coming to market at a variety of price-points. games have aspired to full pricing. the biggest challenge facing the game industry is selling more than one gaming experience a year to Wii owners. as consumers search around for novelty. Multiple-Pricing Structures Serial games. casual games. .
Publishers and hardware manufacturers attempt to introduce new anti-piracy measures or DRM encryption solutions only to be hit with frustrated consumers and determined hackers. piracy is the norm. YouTube. viral content creation and sharing are all coalescing. to encourage youngsters to aim for a career in gaming. or learn go live with.) has moved on from innovation and has become mandatory. they offer the greatest threat. the game industry does not accurately represent the population at large. University courses dedicated to game and game creation are mushrooming. micro-payments. The games business must make sure it remains an attractive career option with fair monetary compensation and an inspirational cultural and creative life. Much work needs to be done to make sure graduates are able to meet the ever-changing demands of working in a fastmoving. Piracy In developing markets like Russia and China.Nurturing Talent The game industry is enjoying a certain cachet as a hot business for bright young creative people. But not all of them are as valuable to the game industry as might be hoped. Outlook etc. World of Warcraft. such can entirely crowd out any other forms of play and must be viewed as serious competition. The game industry also has a responsibility to reach out to all levels of education. Some developers have drastically shifted their emphasis as a direct result of piracy. Personalization and Viral Gaming Hardcore and casual consumers alike have repeatedly shown a desire to customize in-game characters and assets way beyond the intentions of game designers. potentially. even though. especially given the grip they have over today’s children. and get attain the relevant grades. The game industry’s own greatest online universe. Demographically. More sophisticated online worlds. related in some way to other entertainment media. technically challenging business. . Online Worlds Social games animate children and adults alike. nor even its consumer base. The ability to play with other people has a special resonance. Online worlds are being created and often branded outside the game industry. Allowing consumers to create within games and then interface with the products they use every day (Facebook. This must embrace all areas of our culture. Designers are being pushed to find ways to make their games appeal to the individual. These are games that the game industry must either create themselves.
as games become more complex. Jade Raymond. . but they use them to communicate their message to the hardcore. closing security gaps faster than ever and offering gaming pricing structures that may go some way to alleviate charges that the so-called high price of games leads to piracy. Superstar Developers The number of individual developers whose name enhances a product’s marketability is growing. compelling work are the ones who succeed. are likely to prosper to a greater degree than those who follow established models. Publishers may not often use their faces to market the games in packaging. Developers who create fun. Nevertheless.But new online services such as Xbox Live and PlayStation Network offer hope through deterrents against piracy. Will Wright.. there will always be people who want something for nothing. The impact these creators have in talking directly to their audience should never be underestimated. artistic. People like Cliff Bleszinski. Dan Houser and Ken Levine are compelling and entertaining in their own right. And. scorn them for their quirks. Whether creating unusual sensory experiences or telling engrossing stories. and will use thievery to meet their ends. These are people whose roles differ considerably from one another. those who understand the emotional connections that players have with their games. do so at their peril. The days when game programmers were seen as social retards is long gone. Game lovers – no matter what their age or social demographic – respect and look up to game creators in ways which corporate branding can never approach. The game industry is only ever strong when it’s making great games. games are getting better.
Are Revenue Gains in the Game Industry Coming at the Expense of Profits? January 27. However. this net loss increased 42% in 2008. 2) Japanese Game Publishers and 3) Asian Game Publishers. this growth has not translated into increased investor value. it has also the general convention that the game industry is “recession proof. Take-Two Interactive and Ubisoft showed positive net income in the first reporting periods of 2008/fiscal 2009. long after development costs have been amortized. with market conditions as they are. Overall in 2008 the seven major Western game publishers we selected have shown a 50% increase in revenue from the equivalent period in 2007 (in most cases the six months from 3/31 to 9/30). an online game market is just starting to emerge in Japan. Only THQ showed a revenue decline. Meanwhile. We divided those companies into three categories: 1) Western Game Publishers. However. it came with a decline in profits. at the same time. Therefore it is no surprise that almost all the game companies saw their market value decline. Take-Two Interactive was the only company that showed an increase in income (or decrease in loss). While Western publishers showed the strongest revenue growth. Japanese publishers have for . Furthermore. The results proved interesting because they highlighted how the market is shifting from a pure physical product business to a hybrid product/service business. As a result.” Looking at the sales numbers it is clear that the industry showed significant growth and most public game companies have been reporting strong revenue increases. The traditional Japanese retail game market has struggled for several years. Only Activision Blizzard. the Asian companies that focus on online PC games are showing very strong profits as their serviceoriented products generate revenue for years. Meanwhile. 2009 It is no secret that the stock market had an almost universally awful performance in 2008. these seven publishers reported an aggregate net loss in both 2007 and 2008. we presented a report comparing the 2008 performance of 14 leading public game companies. Of course. In the latest issue of the DFC Dossier.
including their actual demographics and usage behavior. it started to appear that some of the Japanese publishers may be better positioned to weather market conditions than their Western counterparts. The three Asian online game companies used for this report had a stellar performance in 2008. Of course. Of course. We feel that not only understanding the change in business model. it is hard for a pirate to steal a good game service. the stocks of Japanese game publishers were not as hard hit. the big success story in 2008 was the Asian PC online game companies. It is becoming clear that the profit margins for successful online games far exceed that of traditional retail products. The large Japanese game publishers did not experience the revenue growth of the Western publishers. Companies like Shanda and NCsoft are still earning money from games released years ago. The Asian online game companies have already mastered making money from games as more of an ongoing service as opposed to a ship and forget product. Furthermore. Overall in 2008 the four major western game publishers included had a 17% annual increase in total revenue for the comparable six month period from 3/31 to 9/30 (for the Western publishers it was 50%). However. they are also changing the game playing and buying habits of consumers. while net income showed a more modest 6% increase. The market value of these company’s stocks not only held steady but for NCsoft (Korea) and Netease (China) showed an increase. This is very good news for the overall industry. Unlike a pure digital product. these companies are not only showing growth they continue to be very profitable. unlike the Western publishers the Japanese publishers showed a 272% increase in income. As a result. However. the casual game industry has seen enormous growth from the rapidly increasing number of online game consumers. consumers are showing a willingness to pay money for a service. . Online game play and digital distribution are just starting to change the business models and power structure of the industry. In 2008. DFC Intelligence is launching a series of new research products that will help track the growing base of online consumers worldwide. More than that. but bad news for the large boxed publishers that have not been able to figure out the service-oriented online business. Aggregate revenue for these three companies was up a total of 26%.sometime been forced to expand beyond their domestic market and look at emerging online business models. but also having a solid grasp of emerging consumer behaviors is essential.
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