The Video Game Industry

Essay by kam-shaftUniversity, Bachelor'sA-, October 2006

download word file, 5 pages 5.0 1 reviews

The video game console industry (VGCI) is one which continues to grow at a rapid rate. Currently, we are witnessing the second generation of the video game consoles, the leaders companies being Microsoft, Nintendo and Sony. Wherever there is such a market, with an opportunity for growth and a fierce rivalry, the internal and external factors will always have to be exploited and minimised as much as possible to gain a competitive advantage over another firms. A sound analysis of the micro and macro environment for an organisation is imperative for its success. An organisation's marketing strategy should reflect its objectives while considering the firm's micro-environment.

The macro environment is an important element to consider for an organisation as these external forces can either pose great opportunities to gain a larger market share or threats which can be detrimental. For these reasons, an analysis of a firm's opportunities and threats must be undertaken.

In terms of marketing, an organisation's macro-environment consists of six major forces which largely affect the organisation, a major force which has an impact on the video games industry are cultural forces.

In recent times, cultural forces pose both threats and opportunities to the video game industry as this environment "is made up of institutions and other forces that affect society's basic values, perceptions, preferences and behaviours," (Adam, S., Armstrong, G., Brown, L., Kotler, P. 2006. p101) which inturn determines which products consumers will purchase and their reasons for doing so. The Video game console industry has had much attention focused on it for a variety of reasons, these namely being game playing, being linked to or contributing to rising levels of obesity and the playing of violent games may lead to violent behaviour. These two public perceptions or beliefs are two factors which threaten the VGCI.