Task 1 - The Value Chain
There are various sectors in the video games industry, they are: Developers, Publishers, Distribution and Retail, Outsourcing companies, Social networks, Console manufactures/first party publishers, Mobile platforms and press and media. Below is a chain about what is the most important, my personal opinion, and who benefits who (the companies that are closer to the left have a higher importance).
Developers
The developers are the brains of the game. They create the story, the characters, the rules, the basis for the music and the setting/scene of the game. They draw up plans for the map(s), characters and architecture. They then give the tasks to the other specialists in the workforce to bring the game to life.
Publishers
The publishers are very important to the games industry. They can help financially fund the companies that create video games. Without the publishers, new companies wouldn’t be able to start out because they probably wouldn’t be able to fund the creation of the game and they wouldn’t be able to advertise it, so no one would know about the game, so therefore no one would by it. Three well know publishers are Electronic Arts, Microsoft Games and Sony Entertainment.
Outsourcing companies
These are companies that are hired to help produce games for another company. The Outsourced companies don’t produce the whole game, but they help produce just one or two aspects of it such as characters and animations.
Console manufactures/first part publishers
The console manufacturers/first party publishers make the dedicated consoles that some of the video games run on. Games made for the consoles can take years to make and the major blockbusters are made by a team of hundreds of specialists and can cost millions of pounds, some of the games can cost well over £20,000,000. But however, because these games cost so much to make they are sold for around £40 each with a percentage of that going to the console manufacturers/first party publishers, times that by how many games that are out on the market and you get a lot of money going to the console manufacturers/first party publishers.
Mobile platforms
The Mobil platforms are the largest sector for the video games market. It is a relatively new sector of the market because Mobil phones have only just become powerful enough to play video games. One of the main reasons why Mobil phone games have become so popular is because nearly everyone over the age of 12 has one and you don’t need a controller to play a game on a Mobil. Games on the Mobil are very popular among the developers; this is because they are very quick, easy and extremely cheaper to produce in comparison to the big blockbusters like Call of Duty and Halo. The reason why they are so cheap is because they don’t need a powerful engine to operate on and they only need a team of 2-10 people of make them. Roughly half of the games available of Mobil’s are free to play; this is so it can get on as many phones as possible. All of these games have some extras in them that make the game easier to play.
Social Networks
The social network sector of the games industry is similar to the Mobil sector. This is because the games are quick, cheap and easy to make. Also, all of the games on the social networking sights are free to play, but the developers try to make it as hard to play without buying something like a ‘power-up’. They also make it so that it is easy to play with the power-ups to persuade more and more people to buy them; this is where the profits for the social networking games come from.
Press and Media
Press and Media is very important to the video gaming industry. This is because all of the games are advertised using: TV, radio, internet companies (e.g. Social Networks, YouTube and Google) magazines, billboards and posters; which are all different sectors of the media industry. Press is important because they review games and give their opinion on a newly released game, which is both a good and bad thing for the game because the review may make people not want the game, or turn those who didn’t want it into wanting it (dependant on what the review was like).
Distribution and Retail
This is easily the largest sector in the games industry. All video games and their consoles are made for a profit, like all other products from every company, from every other industry in the world, they have all been made to make a profit for the owner. The key to good retail is to distribute it to as many sources of retail as possible. After all; all companies need to remember… No money, no company.
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