ENVIRONMENTAL SCANNINGA Marketing Analysis of the

Video Game Industry

David Marchenko

ENVIRONMENTAL SCANNING

“Collecting external marketing environment information to identify and interpret potential trends”

“Trends may represent significant opportunities or threats to the company”

“WHY VIDEO GAMES ARE SO EXPENSIVE TO DEVELOP”

The Economist

September 25th, 2014

“With smaller budgets, and less design by committee, indie games companies

are where much of the industry's innovation is taking place. Many make a virtue

of their lo-fi graphics (the blocky visuals of Minecraft being the most famous

example). Mobile games, played in short bursts on tiny screens with limited

interfaces, don't need big budgets either. But it is still the big-budget games that

rake in the cash. Grand Theft Auto V earned around $800 million on its first

day – three times what it cost to make. And with the latest games consoles

capable of rendering even more detailed graphics, expect budgets to keep

climbing.”

THE VIDEOGAME INDUSTRY BEFORE SMARTPHONES

• Videogame Industry = 3 Tiers

• Primarily Dominated by Home

Consoles and Handheld

Consoles

• Mobile Gaming = small

THE VIDEOGAME INDUSTRY BEFORE SMARTPHONES

Price

Quality

• Tier 1 – Home Consoles

• PlayStation, XBOX, Wii, PC

• Tier 2 – Handheld Consoles

• DS, PSP

• Tier 3 – Mobile Gaming

• Cell Phones, Flash Games

THE VIDEOGAME INDUSTRY AFTER SMARTPHONES

• Videogame Industry still 3 Tiers

• Nintendo and Sony failed in

Scanning Technological,

Sociocultural, and Economic Trends

• Handheld Gaming Declining

• Mobile Gaming Growing Rapidly

• Convenient

• Cheap Games

• Satisfactory Quality

THE VIDEOGAME INDUSTRY AFTER SMARTPHONES

Price

Quality

• Tier 1 – Home Consoles

• PlayStation, XBOX, Wii U,

PC Games

• Tier 2 – Handheld Consoles

• 3DS, PS Vita Games

• Tier 3 – Mobile Gaming

• Smartphone Apps

THE VIDEOGAME INDUSTRY TODAY

• Videogame Industry = 4 Tiers

• Handheld Gaming all but

dead

• Steady Growth in Home

Consoles with new Tech

• Mobile Gaming = Slow

Growth

• Nintendo = proactive

• Hybrid Gaming w/

Nintendo Switch, creating

new tier

THE VIDEOGAME INDUSTRY TODAY

• Tier 1 – Home Consoles

• PlayStation, XBOX, PC

• Tier 2 – Hybrid Consoles

• Nintendo Switch

• Tier 3 – Handheld Consoles

• 3DS

• Tier 4 – Mobile Gaming

• Smart Devices, Indie

Games

Price

Quality

ANALYSIS

• Nintendo and Sony Failures

• Socio-Cultural

• Economic

• Technological

• Downfall of Handheld Games

• Nintendo Success

• Socio-Cultural

• Competitive

• Rise of Hybrid Games

SOURCES

https://www.gamereactor.eu/articles/374623/The+Triple-I+Revolution/

https://www.economist.com/blogs/economist-explains/2014/09/economist-explains-15