the videogames industry Essay -- essays research papers

The idiot box plot industry has become a huge influence on society and the economy today. It is an industry that is so huge that it is estimated that 70% of U.S homes impart cause a Video juicy system by the stratum 2005, (Cassandra, 2002) Just one year away. But what made it the way it is? Since it is shut away an industry it has to take in the natural laws of economics. In this paper we go away douse into the industry that now has gone beyond movies and recordings in profit.The rootage is that the telly game consol industry is an oligopoly and has to deal with the game theory. It is an oligopoly because it has high barriers to entry such(prenominal) as hardware subsidies and very fierce arguing amongst already open up firms (Scevek, 2001) Also there are only three major producers of photo game consoles Sony, Nintendo, and the modernly Microsoft. Because these three all have personal interests the game theory applies quickly. The most recent example is the releases of the Playstaion 2 by Sony, the Nintendo GameCube, and Microsofts X-box. Early in the year of 2001 Sony released its latest Playstation 2 and its profits surged. They had change magnitude 3.1% to 24.8 billion Yen, and 22.t billion units sent world wide in the first fiscal year (IGN, 2002). Microsoft and Nintendo however had a different story. They decided to name off sending of their product until the holiday season of 2001, a known purchasing time for consumers. However this induced competition for personal interests and two ended up worsened off. fleck the Xbox had sold 1.4 gazillion units, and Gamecube 1.3 million, Sony had 1.4 million units sold in its fourth quarter (Weintraub, 2002). That 1.4 million was in add-on to the millions sold before hand. This unwise release is catching up with Microsoft as the profits for the X-box had halved to 190 million in 2003 compared to the loss of 60 million the year before (Yabedo, 2003), and it may soon be forced to hold the gamin g industry. As it stands now the current owning of systems in households is 75% own a Playstation 2, 12% own a X-box, and13% own a Gamecube (yabedo, 2003). While the figures may be small Nintendo is building up slow notwithstanding steady steam with its big name titles, and domination of the hand-held industry. Its recent release the Gameboy Advance has caused a make up for the loss by GameCube. It had so... ...t (Chmielewski,2002). With this increase investment and demand in human capital it is pull to see that the industry is bound to only continue growing.In final result the video game industry is growing, it has been for the last thirty years and will continue maybe for the next hundred. But it is an industry none the less, it has to follow the same laws as any other firm in the game of economics, and in this game there is no save point or pause button. We have seen that because of the game theory the console companies make choices for what they count to be their best optio n only to have a worse outcome than if they had released at a different date, that as a compony earns an economic profit other componies will try to enter that area capricious down economic profit, as well as examples of their fierce competition to stay on the cutting edge. We have also seen that they follow the laws of demand, and develop only on the desires and tastes of the buyers, the costs that come with producing a game two explicit and implicit, and the externalities that come with the products. And what investments are being made for the future in this billion-dollar industry.