Drivers of Change in Video Game Industry

Drivers of change are basically the change agents that influences in reshaping the industry and varying competitive conditions. They are ways in order to classify the driving force analysis that includes.

• Identifying the driving forces 

• Assessing whether the drivers of change are; on the whole acting to make the industry more or less attractive.

• Determining what strategy changes are needed to prepare for the impacts of the driving forces. 

Based on the above definition, drivers of change and their impact on the videogame industry are identified as per below:

Technological change

There has been a significant advancement in technology in video and computer games industry causing the sales to increase worldwide. Advancement in technology refers here to the 8 bits, 16 bits, 32 bits which is the technology speed and the more will be created there will be more speed in the video game. The advancement in technology was expected to facilitate releasing games that could be played in multiple forms. There has been an introduction of inter changeable cartridges which allow new games. Moreover, the industry growth got a booster shot when it licensed its arcade. Furthermore, there was a CD Rom attachment which made the competition more fierce and strong.

Changes in the industry’s long term growth rate

Initially the industry was going through a steady growth phase but since there has been a decline in revenues, the industry went into a maturity phase.

Marketing innovation

In addition there has been a market innovation in the industry. This is because video game marketing was becoming a more significant competitive factor. As retail shelf space became more crowded with video game platforms and game software, there has been a shift in marketing strategy. The major videogame releases started to be promoted much like a release from a major movie studio. Advertising was done though television, different promotional schemes, direct mail and also, through special launch parties. 

Besides this, themes parks were developed, the basic idea was idea that the video arcade was traditionally the launching ground for games designed for home use and video game buyers also to sharpen their game-playing skills in arcades before buying home versions of the game.

Likewise, new distribution channels were emerging and it was possible through the technology which includes direct marketing, the use of cable television, on-line distribution via the internet, satellite route and increased bandwidth of phone and cable systems.

Product innovation

There was an intense competitive rivalry in the industry as new game titles were released by a growing number of competitors along with new product features. This created a product innovation in the industry.

Growing buyer preferences for differentiated product

The video game industry has growing rapidly day by day and the buyers are more diverted into using the video game industry have the ability to produce unique product account to the buyer’s preference.

Increasing Globalization

There have been strategic alliances and partnerships formed in the industry along with the interactive entertainment software segments. Due to fast-growing video game business new divisions has been made in order to cope up with the challenges in the industry. There has been a change in industry economically wise as well. Due to strong yen affected the performance around globe which in turn caused the exports and sales to decrease.

To conclude, fierce competition in the industry calls for a high quality, unique entertainment software concepts. Different marketing tactics and licensing fees will cause an increase the expenses. The biggest challenge in the video game industry is to get more adults and females to play video games. Also, there has been an unfavorable operating environment due to uncertainty in the foreign currency market.  Hence, the strategy adopted by the industry is to aggressively move forward to develop appealing electronics products and to promote its activities in the entertainment business. In addition, it should reshape its corporate structure by eliminating product groups and should review every activity in an effort to reduce costs.