Marketing Strategies and Market Analysis in the Video Game Industry

Peculiarities of Marketing Strategies and Market Analysis in the Video Game Industry

Introduction

The market analysis of the computer games industry involves the extensive research and finding out the tendencies that are defining the particular enterprise in this area as profitable. As the field of the video and computer games is now finding itself in the state of the continuous improvement, and is continually developing an innovative hard- and software, it is necessary for the entrepreneurs involved to follow the already existing tendencies in media and create a so-called intertextual approach to their performance on the international market. Additionally, the developers have to apply their software to the current needs of customers. As they prefer to purchase the polyfunctional devices not always developed solely for gaming, the developers should meet the technical abilities of the existing hardware. While considering all the stated points, the entrepreneurs should establish a reasonable pricing policy. The computer games industry has a sophisticated structure. Consequently, all the stakeholders involved should meet the various market regulations to gain a positive outcome.

Computer Game Industry Overview

The significance of the computer game industry can be observed when comparing the annual incomes of this particular production with the filmmaking financial profit, and the other areas of the entertainment field. Marchand and Hennig-Thurau state that those incomes “are about five times higher than global music revenues ($16.5 billion in 2011), higher than consumer book sales ($69.4 billion in 2011), and similar to movie revenues ($85 billion in 2011)” (Marchand and Hennig-Thurau 141). Presumably, the scope of the computer games popularity and the fact that it has a considerable niche in the entertainment field is providing the evidence for the assumption that the industry will attract more customers and, consequently, will continue to expand in the future. Additionally, the development of the improved and innovative features of the consoles, and adapting of the polyfunctional technical devices (such as tablets or smartphones which are not developed solely for the video gaming) to the gaming process also confirms the previously stated point. Also, the authors report that “the performance of software titles depends strongly on the technical capabilities of the hardware for which they are designed, and these capabilities have advanced dramatically in the past 30 years” (Marchand and Hennig-Thurau 143). This creates the necessary conditions for the emergence of the codependency between the hardware and the software. That is, the more software is improving, the more the hardware has to be adapted to its innovative features. So, the efficiency of the marketing strategies that are used for the popularization of the innovative gaming software and hardware can be evaluated by their ability to follow those new tendencies. According to Marchand and Hennig-Thurau, this fact presents a controversy, which cannot be quickly resolved, as the gaming industry has so many niches that the marketing is sometimes provided only for the expensive, and. Consequently, financially supported developments in the area.

Controversies of Pricing Policies

Another problematic issue that is presenting itself in the field of the computer games industry-related marketing is a pricing policy established by developers. The controversy that is originated as the effect of the differences in the financial capacity of the various niches in the area was briefly observed in the previous paragraph. The confusion which is related to the pricing policy in this particular field cannot be overemphasized. Liu examines a specific case that represents those problematic issues. The “console war” (Liu 428) is what the author calls the situation that has emerged in 1995-96 after Sony PlayStation, and the Nintendo have both launched the consoles which were eager to gain the customers loyalty and play a significant role in the video gaming industry. The author reports that “Sony was determined to attract as many game publishers as possible, while Nintendo charged a much higher royalty fee to game publishers and enforced strict content and quality restrictions” (Liu 428). The quality-quantity contradictions have led to the emergence of the different marketing strategies in the area that can be observed using the Nintendo-Sony Playstation case. The Nintendo approach to the pricing and quality policy and the strategy used for the marketing purposes were ineffective when compared to the ones of the Sony PS’s. The Nintendo inability to extend its technical features to support more games showed the mistake that is done under the circumstances of the continuous and quick expanding of the developments within the gaming industry and one’s inability to follow the demands of the market. Consequently, the ongoing innovations should be taken into the account by the developers, as once one is getting involved in the industry, there is no way to be an independent player in the industry, and not follow the conventional rules.

Competitive Advantages in the Computer Games Industry

Gallagher and Ho Park state that the implementation of the innovations does not necessarily guarantee all the organizations involved in the computer games industry the successful performance within the international market. The author reports that the so-called competitive advantages can only be gained when the following criteria will be taken into the account: “1) superior technology; 2) early entry through innovation; 3) proper pricing; 4) name brand; 5) channel management; 6) entry barriers” (Gallagher and Ho Park 80). That is, the outstanding performance of the developers in the area of the computer games has a comprehensive requirements that not only imply a providing of the efficient pricing policy and creating the correlations with the innovative developments in the area as a whole and the production of the particular brand, but also structuring the enterprise in a way that it will be flexible enough to make the quick changes in the pricing, management and all the other policies in order to remain a significant player in the industry.

Importance of Flexibility in the Computer Games Industry

An efficient marketing of the computer games-related production is also defined by the ability of the particular organization to develop what Apperley calls an “intertextual” approach (Apperley 20). That is, one of the main peculiarities of the industry is that it cannot exist independently and not take the modern filmmaking and all the other tendencies of the entertainment field into the consideration. The author reports that “explicit and implicit references to other media forms proliferate in video games, and in which video games are referred to aesthetically and stylistically within other media” (Apperley 20). The developments in the field of video games should always follow the contemporary stylistic tendencies and, consequently, address the needs of the customers, which are formed mainly by the media images. The marketing strategies of the computer games industry should always involve already existing contextual characteristics. While the innovative approach is efficient and decisive when it comes to the technical side of the hardware and software development, it undoubtedly is not advisable for the content production of the video games. It should be applying an intertextual approach to reach a significant profitability.

Genre-based Marketing Approach Analysis

There is also an issue of the structuring the video games production using the genre criteria. The genre of the particular development in the area also plays a significant role in the evaluation of the efficiency of the marketing strategy used for promotion of the video games-related products. Clarke et al. state that the developers of the software and hardware in this particular field cannot rely on a genre as the feature that guarantees a stable income for the enterprise involved (Clarke et al.). The author also reports that in this case the genre-based classification “challenge traditional genre conceptualizations and boundaries” (Clarke et al. 3). Presumably, the customers are searching for video games by their widely known name and their widespread popularity. Additionally, the genre, when observed in this particular field, is a relatable category, as today’s computer games production often uses an intertextual approach to their developments.

Conclusion

So, the video games industry undoubtedly has a comprehensive structure that should always be taken into account by the developers. There are several criteria that define the efficiency of the marketing strategies used: 1) the correlations between the software and hardware developments; 2) the reasonable pricing policy; 3) ability to restructure the enterprise quickly enough to meet the requirements of the innovative developments; 4) applying an “intertextual” approach to the content making; 5) considering the instability of the concept of “genre” and the readiness to extend the genre characteristics of the product. Those points are decisive in the computer games industry, as the meeting of all those requirements can contribute to the development of the efficient marketing strategy for the enterprises involved in it. Today’s ongoing improvements in the area imply the readiness of all the entrepreneurs to quickly adapt to them – that is the primary goal that should be achieved for a computer games-producing organization to play a significant role in the international market.

Works Cited

Apperley, Thomas H. “Genre and game studies: Toward a critical approach to video game genres.” Simulation & Gaming, vol. 37, no. 1, 2006, pp. 6–23, doi:10.1177/1046878105282278.
Clarke, Rachel Ivy, et al. “Why Video Game Genres Fail.” Games and Culture, vol. 12, no. 5, June 2015, pp. 445–465., doi:10.1177/1555412015591900.
Gallagher, S., and Seung Ho Park. “Innovation and competition in standard-Based industries: a historical analysis of the US home video game market.” IEEE Transactions on Engineering Management, vol. 49, no. 1, 2002, pp. 67–82., doi:10.1109/17.985749.
Liu, Hongju. “Dynamics of Pricing in the Video Game Console Market: Skimming or Penetration?” Journal of Marketing Research, vol. 47, no. 3, 2010, pp. 428–443., doi:10.1509/jmkr.47.3.428.
Marchand, André, and Thorsten Hennig-Thurau. “Value Creation in the Video Game Industry: Industry Economics, Consumer Benefits, and Research Opportunities.” Journal of Interactive Marketing, vol. 27, no. 3, 2013, pp. 141–157., doi:10.1016/j.intmar.2013.05.001.