Week 2 EOC: Boston Consulting Group

The video game industry has recently started to decline due to the pricing and technology of their products. The consoles have been selling less, while the games have been selling more. People don’t want to buy expensive systems. Consoles such as the Xbox 360, PS3, and Wii aren’t expecting to reduce prices because they are Cash Cows. They are a low growth, high-share product because everyone has one, but the product hasn’t come out with any new innovation that wows the consumer. The video game market does have to compete with companies such as Apple which has many games that cost 99 cents or nothing at all.

            The Daily Wildcat believes that a new system called “The Steam Box” will take a turn for the video game market in a positive way. “Nintendo, Sony and Microsoft have enjoyed a solid decade of being the only three makers of good home video game consoles, but that might change with the emergence of these newcomers with plenty of potential” http://www.wildcat.arizona.edu/article/2013/01/new-consoles-could-change-landscape-of-video-game-industrysays Shield and Ouya.

            New games such as Tiger Woods PGA tour 10, Grand Theft Auto, The Beatles: Rock Band and Call of Duty: Modern Warfare 2 will make video game executives positive about the industry and remain opitimistic but “it also doesn't help that the cost of producing top-tier games like Activision's "Call Of Duty" series or Take Two (TTWO +0.24%) subsidiary Rockstar Games' "Grand Theft Auto" franchise have soared into the multimillions as production of other games plummeted” http://money.msn.com/now/post.aspx?post=478009a6-cdf7-4707-800f-80ddf837ced0 says MSN writer Jason Notte. Video games would also be considered a Cash Cow.

            On the other hand, app store games have been rising in the industry.  They are much more convenient and cheaper than game consoles and software. “Nearly everywhere, it seems, people have been sharing Words With Friends, slinging Angry Birds at pigs or springing their creatures through a precarious Doodle universe. All those games, made for smartphones, sure are popular, and the financial picture improves when their sales are included. http://www.nytimes.com/2012/10/07/arts/video-games/video-game-retail-sales-decline-despite-new-hits.html?pagewanted=all&_r=0. Apps would be considered a star because they are high-growth, high share business products. It’s hard to compete with something so inventive.