Consumers or Gamers

The role of a publisher is to market the correct titles by identifying the potential of each game. These account for a large quantum of revenue and hence large global companies have taken on to game publishing which is found to be a lucrative business due to high volumes and fast turnover. This is essentially a marketing aspect of the game industry which includes production management, funding, pricing, cost controls, inventory management and marketing. Publishers attempt to have the same titles on different platforms such as for PCs and consoles thereby spreading fixed costs.

(Beinisch. Paunov, 2005). This is in direct conflict with the strategy of the console manufacturers who prefer to retain titles for their machines exclusively to create console dependency on the consumer. Thus there is generally a divergence of interests between the console manufacturers as well as developers and publishers. (Beinisch. Paunov, 2005). Distributors The distributor provides an effective link between the developer and publisher and the retailer. The key functions in distribution involve an effective supply chain and management of sales.

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Some publishers prefer in house distributors while other publishers as Sony prefer licensed distribution which in this case has been allotted to Egmont for a number of countries. Publishers increasingly prefer to take on distribution through the acquisition of distribution companies or through their own distribution channels. (Beinisch. Paunov, 2005) Retailers Retailers have an important role to play as they determine the manner in which the titles will finally reach the consumer. Thus optimization of sales is achieved through retailers.

These tend to combine the sales of a variety of titles for all the three main consoles as well as the PCs to generate large volumes. This suit the console manufactures as well as publishers which desire large shop display. (Beinisch. Paunov, 2005). Technology diffusion in terms of broadband availability is affecting the established value chain of distribution increasingly affecting the retailer’s role and power in the market. New entrants such as ISPs and web sites are evolving as retailers in their own rights.

Thus the distribution of the games is undergoing a paradigm shift which is likely to see a shake out in the distribution system with digital distribution, direct retail distribution, mass penetration of the market by appropriate content development, rising costs of development and consoles all affecting the market. (Beinisch. Paunov, 2005). Console gaming has become an interactive process with the gamers actively participating in game development, through forums, magazines and discussion groups. Nintendo was the first to involve the gamer with a special magazine dedicated to its gaming console.

This has raised expectations of participative interventions by gamers in the development hierarchy of games. On line gaming has further raised the expectations of gamers and is providing the consumer great opportunities in entertainment in a highly live and responsive environment which is dynamic, has very high resolution thus creating virtual reality setting and a participative interaction which heightens the experience. The growth of hyper threading technology enables high quality characters with detailed animation and dynamic game worlds into games to maintain fast game play.

This is included in processors such as Intel Pentium 4 and Xeon. (Intel, 2003). The gamers and the developers are interlinked with such technology with the gamer provided the same experience that the developer attempts to create for him. (Intel, 2003). The digital environment and infra structure required to be created for MMORPG based gaming has been in the making and has developed rapidly with companies as Intel taking the lead. (Intel, 2003). Thus the gamer is not a consumer of the service provided to him but also an active participant in its development.

This will be further analyzed with reference to the case studies of Sony, Microsoft and Nintendo. Literature on relationship between console, developer and consumer Video game console systems started as low end micro controllers however these soon evolved into high end microprocessors and are upgrading towards multi processor systems. The platform performance of consoles has grown even more rapidly than Moore’s Law as is indicated by the Graph 1 below. (Matthews. Wellman. Gschwind, 2004) Graph 1 : Performance growth of video game console systems (in Mops).

The revenue relationship between the console producers and the developer is considerably significant and will further highlight the compact between the two which can contribute to growth. The share of games consumer revenues in console software are as indicated in Graph 2. It would be evident that the console hardware industry has derived the maximum share of 40 percent with the developer and publisher revenues being roughly half. On the other hand when compared with PC software the developer has a majority or 60 percent of the revenue.

Though the larger volumes of console gaming which in the US alone is roughly five times that of PC games more than makes up for this variation. Developers also tend to generate common software for console and PC gaming thereby establishing an economy of scales and reducing costs, thus adding to the revenues. The large number of game development studios in Europe as indicated in Table 3 will denote the attractiveness of game development as an industry. UK has roughly the equivalent of studios in France, Germany and Italy combined and is the leader in Europe.