Week 2 EOC: Boston Consulting Group - Video Games

“U.S. videogame industry sales fell 10% in June, as the sector continues to suffer from online competition and tepid consumer demand. Sales of new videogame hardware, software and accessories dropped to $995 million from $1.11 billion in the year-earlier month, according to NPD Group. “ (http://online.wsj.com/article/BT-CO-20110715-706990.html) Obviously, the video game industry isn’t doing as well as it used to, but at the same time it’s expanding. With phones becoming “smarter”, and access to devices where one can play video games becoming wider, more and more game developers are attempting to make games that are not only more easily accessible – cheap, handheld, apps – but that can also be big hits. A great example of one these games is Angry Birds.  “With a combined 250 million downloads across all platforms the game has been called “the largest mobile app success the world has seen so far”. (http://www.abstract-thoughts.com/tech/angry-birds-factsfigures-links-for-all-platforms/) And it only took eight months to be created by only four people. Looking at the video game industry with the Boston Consulting Group Approach, I’d say older versions of consoles, like the original xboxs and playstations are the dogs because not many people buy them anymore. The question marks are the video games for the consoles because they require a lot of money to make them, and more (for ads) to increase their sales. Big hit video games on the other hand are cash cows for game consoles. If there aren’t good video games for a console, let’s say the Wii, then not many people are going to buy them. Consoles need hits so that people take interest and buy them to play the video game. So big hits produce a lot of money for the consoles. And at the moment I’d have to say handheld games, like Angry Birds, are the stars because they are cheap, fun, and are getting a lot of attention. And according to an analysis, “the market for apps on mobile devices such as phones and tablets has come into its own as a part of the entertainment content market.” (http://www.gamasutra.com/view/news/35923/Analysis_Is_The_US_Video_Game_Industry_Really_Declining.php).

Bryan Ramirez