Monday, July 18, 2011

Week 2 EOC: Boston Consulting Group - Video Games

Since the cell phone games have come into play the video game industry is finally hitting a decline.  The android base smart phones and iphones all have applications where you can either pay to download a game or download one for free.  This has taken over the gaming industry because not only are they free but they're convenient.  People carry their cell phones with them everywhere so when waiting somewhere why not play a quick fun game on your phone. 

   According to the BCG growth-share matrix they have categories which consists of cash cows, stars, question marks, and dogs. Cash cows are low-growth, high-share business or products, the play station console would fall into this category.  It's a safe product that has been around since the 1990s, and it always comes out with something new and updated.  "It has everything. You got it. The PS3™ system has built-in Wi-Fi and huge amounts of storage for games, add-ons, music, videos and photos. Its built-in Blu-ray player shows HD movies at 1080p so you get pristine picture quality. We’ve got Netflix for streaming movies and our own PlayStation®Store where you can download hundreds of games, free demos, and stream thousands of TV shows and movies." (http://us.playstation.com/ps3/)  Question marks are low-share business units in high-growth markets, this would represent the Nintendo.  They have been around for ages and always have a new console to promote.  The most popular one right now would be the Wii; it's an active game for the whole family to be involved in.  This category requires a lot of cash to hole their share, let alone increase it. Dogs are low-growth, low-share business and products.  They may generate enough cash to maintain themselves but don't promise to be large sources of cash.  Under this would fall the Xbox, it’s probably one of the newest consoles to have been around but definitely not the most profitable.  You have to pay to have your internet on the system, let alone all the accessories, plus the play station graphics are still known to be better.  "After E3 this year I think it's obvious that the big companies, particularly Microsoft and Nintendo don't relate or understand their customer base. I was left scratching my head at a lot of the announcements and demonstrations. The gaming industry is going downhill. I used to love Xbox and now it's becoming more and more about TV and casual games. How many people are honestly going to buy an Xbox to watch movies and TV? People, even casual gamers, buy these consoles for games. They don't buy them to watch TV or movies. The only hope seems to rely in 3rd part game." (http://www.g4tv.com/thefeed/blog/post/713574/feedback-at-e3-2011-sony-microsoft-nintendo-everything-else-from-the-show/)  But it doesn't matter how long the systems been around there is no competition to the handy dandy cell phone games people carry with them all the time, and these would fall under the category of the star.

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