Monday, July 18, 2011

Week 2: EOC: Boston Consulting Group - Video Games

    In the world of portfolio planning, the Boston Consulting Group has developed a method, a marketing strategy to build customer relations, referred to as the Growth-Share Matrix.  This strategy allows SBU's to be categorized into 4 basic groups; cash cows, stars, questions marks and dogs.
   After reading the article in the Wall Street Journal (JULY 28, 2009; Videogame Makers Can't Dodge Recession; By YUKARI IWATANI KANE) It is clear to see how the matrix is a true working strategy.
Here is my analogy: 
  • Star: download digital data . i phone games
  • Question Mark:  Wii / Nintendo
  • Cash Cow: PlayStation
  • Dog: X box (Microsoft)
"Many console and PC game sales are also being cannibalized by digitally downloaded games and alternative entertainment sources like Apple Inc.'s iPhone, which offers thousands of games that can cost only 99 cents or even nothing at all." (http://online.wsj.com/article/SB124865158612682399.html)
So what does this mean for the gaming industry?  How about drop in hardware sales or software sales?  Most importantly, would this impact the retail costs? Experts say yes.
"Analysts expect Sony to cut the price on its PS3 by about $100 this year, leading to price cuts by Microsoft on some of its Xbox 360 models. The PS3 starts at about $400, compared with the equivalent Xbox 360, which costs about $300. Though Nintendo has said it won't cut prices on its $250 Wii this year, it is expected to do so indirectly by bundling games with the console." (http://online.wsj.com/article/SB124865158612682399.html)
So what is the solution to a diminishing demand? Should gaming companies stop producing hardware?  Or should they concentrate on SBU's that enhances their customer base and market share? The leaders at Compuware suggest expansion into IT that optimizes applications.
“Organizations today depend on the rapid development and delivery of high-performing applications to drive revenues, customer satisfaction and brand,” said Compuware Chief Executive Officer Bob Paul. “To meet these demands effectively, IT organizations must have visibility into the performance of every transaction, from development, through test and in production. Together, Compuware and dynaTrace APM solutions allow IT to meet business demands for performance and agility through unbeatable insight into the user experience – whether in cloud, complex or traditional environments.”  (http://www.compuware.com/about/r/Compuware_Acquires_dynaTrace_press_release_final.pdf)

Although the recession and unemployment may factor into a consumers buying power; the desire to game will always remain. Consumers are demanding faster downloads, lower game costs, better graphics and interaction with others. The world wide web was listening and so was the creators of "Happy Cloud."
"Gamers don't want to wait overnight for a download that might get interrupted," says Eric Gastfriend, VP and GM of Happy Cloud. "Happy Cloud offers instant accessibility for top quality PC games. Our technology enables a seamless trial-purchase flow that gives publishers a hassle-free way to expose their games to new audiences. We're launching today with 10 games from 3 publishers, and we will be rapidly expanding the catalog post-launch."( http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/07/18/prweb8649125.DTL#ixzz1SU4tQpcj )
 Games have always been an entertainment to pass time. Cards, dominoes and board games have stayed around for hundreds of years for a reason.

Happy Cloud is opening to customers in the U.S. with games from publishers including Warner Brothers Interactive Entertainment, Paradox Interactive, and Frictional Games. No support is required from publishers or developers to bring the games to the cloud on the Happy Cloud. Try or buy a new game today at www.thehappycloud.com.

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