Games are serious BUSINE$$ by ouz10208


									 Games are serious BUSINE$$:

 “The market for games is so
   large that it has developed
   into a new media

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   (DFC, p. 24)
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Alternative Distribution Systems?

   How have some
   game companies
     “cut out the
    middle man”?
     distributors, retailers)

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Valve & Steam: The Future?
   Steam = online 'content distribution platform'
   Pros:
       Valve makes more $,
       indie game distribution,
       less room for retail censorship (e.g. by Wal-Mart)
       easier to download patches, sell add-ons & market other products to
        consumer base,
       reduce advertising costs/target advertising
       Environment…less packaging.
       Could reduce game cost, while having tangible special limited editions
        with action figures/manual/art etc.
   Cons:
       retail/distributors/publishers make less $,
       gamers don’t get physical copy,
       limits 2nd hand market, bandwidth
   Source:

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What is most popular platform?
(in 2003)
 PC?
 Console?
       Gamecube
       PS2
       XBox
       GBA
       Other?

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(DFC, p. 21)

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2003 Software Revenue by Platform

                                                            PS 2


             XBOX                              GameCube


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Gaming Industry growth
    “[The games] industry is still growing faster than
     almost any technology business out there right
     now.” (San Francisco Chronicle)

    Games are also the “fastest growing segment of
     the entertainment market, and an excellent field
     for career advancement.” (IGDA)

    “The technology industry has been hammered
     as far as new job opportunities go. But the
     gaming industry…is in a hiring boom right
     now, and companies are looking for techies
     with a creative soul.” ( 9/5/2002)
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Growth Forecast (International)
   “The global market is projected to grow from
    $50B in 2001 to approximately $85B in 2006”
    (Digital Game Forecast, p. 17)

   “PricewaterhouseCoopers (PWC) forecasts the
    N. American video game market to expand to
    $13.5B in 2007, growing at an 11.7% compound
    annual rate, well outpacing pay-per-view TV
    (2%), the cinema box office (4%), amusement
    parks (4%), recorded music (0%), home video
    (5%) and traditional toy markets (2%) (DGF, p. 17)

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(DGF, p. 17)

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Career specialization
(like web & movies)
   Then (1970s-1990’s):
       Websites  developed & maintained by single
       Games developed by single person or small
        group of friends.

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 Industry Specialization (cont’d)
     Now:
         Websites  developed & maintained by highly
          specialized teams.
         Games are huge production spectacles with
          large teams like movies.

     Like websites & movies, game
      production now involves many different
      career paths.

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Industry: Soaring Development and Marketing Costs

   “Today’s games have entire teams of
    programmers, graphic artists, game
    designers, producers and audio
    technicians. Many games have expensive
    licenses, utilize Hollywood talent and have
    high-quality soundtracks.”
   “Consumers now expect non-interactive
    introductions and cut scenes that feature
    movie-quality computer-generated graphics
    and/or video with live actors.”
   “To get consumers to notice these high-end titles
    usually requires a marketing budget that
    equals or exceeds the development budget.”

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Industry: Soaring Development and Marketing Costs

   “As an average game reaches
    development costs of $5 million, DFC
    Intelligence estimates the breakeven point
    is reaching 500,000 units.
   “[O]nly about 5% of SKUs will reach that level in
    the U.S. This means to be successful it is
    critical that companies:
       1) develop for multiple platforms and
       2) release titles on a worldwide basis.
             (DFC Intelligence

   Some companies distributing games online to
    cut distribution costs.
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 Major Career paths
     Audio: music, sound effects, character
      noises, dialogue, etc.
     Design: game design, level design,
      storyboarders, animators, etc.
     Production: producers, testers, etc.
     Programming: web, console, wireless,
      database, AI, physics, etc.
     Visual Arts: character & background design,
     Biz & Misc: administrators, marketers,
      support staff, etc.

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Who’s playing?
     “60% of all Americans age six and older, or
      about 145 million people, play computer and
      video games.”

     “35% of all Americans identified computer
      and video games as the most fun
      entertainment activity. That's more than
      television (18%) and movies (11%)
      (IGDA, citing the IDSA)

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Dissecting the audience
How to ID your target audience?
 Age?
 Gender?
 Ethnicity?
 Generation? (GenX vs. Millenials)
 Location? (e.g. language, time zone)
 Motivation? (e.g. corporate training)

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