||Socio-Psychological and Technological Trend’s Impact on Business Models in Video Game Industry
||Master's Program in Business and Management (English-Taught Program)
influence of trend
Despite the fact that the entire history of game industry does not cover more than 50 years old, in such a relatively short period of time several stages of general development have been formed, each with its own paradigm. The game companies managed to go through a crisis and revolutionary innovations, in both cases forcing the entire industry to reconsider its views on doing business entailing radical transformations. Changes were manifested in everything: the structuring of the internal environment, market segmentation, marketing policies, corporate ethics, interaction with the community, the approach to game design, and naturally this was also drastically reflected in the designing of the business model.
Each period of development presents its peculiar business models typical for that time concretely. However, the aim of this work is to highlight the key turning points of the transformations and will not consider the effectiveness or shortcomings of a particular model.
||Table of Contents
Chapter 1 Introduction - 1 -
1.1 Background - 1 -
1.1.1 The first steps of video gaming - 2 -
1.1.2 The rise of game industry in terms of business - 2 -
1.1.3 Current status of industry - 5 -
1.2 Problem description - 6 -
1.2.1 First problem statement - 7 -
1.2.2 Second problem statement - 7 -
1.3 Research questions - 7 -
1.4 Purpose of the study - 7 -
Chapter 2 Literature Review - 8 -
2.1 Business modeling and market segmentation - 8 -
2.1.1 Types of mostly used models - 8 -
2.1.2 Rethinking of business concept and shifts in priorities - 10 -
2.2 Researches’ focused trends and their inferences - 14 -
2.2.1 Internet ⇒ Online Gaming - 14 -
2.2.2 Video Live Streaming ⇒ Cybersport and Marketing - 16 -
Chapter 3 Research Method - 21 -
3.1 The great global crisis - 21 -
3.2 Home computer competition - 23 -
3.3 Loss of control over the publishing the games - 24 -
3.4 Boom of smartphones globalization - 26 -
3.5 Increasing of development cycles - 27 -
3.6 Increasing the average age of gamers - 28 -
3.7 AR and VR technologies’ segments - 29 -
3.8 Low threshold for entering the industry - 29 -
3.9 The COVID-19 pandemic - 30 -
Chapter 4 Result - 31 -
4.1 The fall of American monopolization - 31 -
4.2 PC as a new segment of game market - 32 -
4.3 Changes of publishing policy - 33 -
4.4 Gambling and the “Overton Window” theory - 33 -
4.5 Meta-driven strategy of game development - 35 -
4.6 Era of F2P model dominance and the “Skinner’s Box” principles - 37 -
4.7 New business models as a reaction to complication of AAA projects - 39 -
4.7.1 Crowdfunding - 39 -
4.7.2 Early-Access - 40 -
4.8 Integration to social networks and mobile platforms - 42 -
4.9 Social marketing - 43 -
Chapter 5 Conclusion and Discussion - 45 -
5.1 Conclusion - 45 -
5.2 Discussion - 45 -
5.2.1 Cloud service technologies and cloud gaming - 46 -
5.2.2 Full transition to the digital method of distribution - 48 -
5.2.3 Subscription as a potential dominant model - 49 -
5.3 Research Limitation and Suggestions for Future Research - 50 -
References - 51 -
Appendix - 57 -
List of Figures
Figure 1.1 Official promotion flyer of “Computer Space” - 4 -
Figure 1.2 Examples of the first mass P2P representatives. - 5 -
Figure 1.3 Chronological comparison of revenue producing. - 6 -
Figure 2.1 Reallocation of priorities in game industry. - 10 -
Figure 2.2 A general concept framework for software business models. - 12 -
Figure 2.3 Differences between two product strategies. - 13 -
Figure 2.4 Statistics of internet users as individuals. - 14 -
Figure 2.5 The value growth of online gaming for the last decade. - 15 -
Figure 2.6 E-Sports timeline with a peak in 2014. - 16 -
Figure 2.7 Total time watched Twitch streams in billions of minutes. - 16 -
Figure 2.8 TwitchTV statistics of views from 4th to 28th of February in 2019. - 17 -
Figure 2.9 Total number of registered players of Apex Legends. - 18 -
Figure 3.1 The representatives of oversaturation in game market by consoles. - 22 -
Figure 3.2 Fall of the industry value during the crisis in 1983. - 23 -
Figure 3.3 The growth of smartphone penetration of mobile phones market. - 26 -
Figure 3.4 Comparison of The Legend of Zelda versions. - 27 -
Figure 3.5 Comparison of technology shift. - 28 -
Figure 3.6 The tendency of increasing the average gamer’s age. - 28 -
Figure 4.1 Comparison of console and pc gaming revenues. - 32 -
Figure 4.2 Gradation of acceptance stages according to Overton window. - 34 -
Figure 4.3 Dota Auto Chess. - 36 -
Figure 4.4 Auto Chess Mobile. - 36 -
Figure 4.5 Team Fight Tactics. - 36 -
Figure 4.6 Mobile gaming market share. - 37 -
Figure 4.7 The Skinner box concept. - 38 -
Figure 4.8 Crowdfunding business model. - 39 -
Figure 4.9 Average daily time spent in mobile application. - 42 -
Figure 5.1 Increasing of games sales via online during COVID-19 pandemic - 48 -
List of Tables
Table 2.1 Literature review of game business modeling and trending. - 20 -
Table 3.1 Summary of main trends with actual consequences. - 30 -
Table 4.1 Summary of trends and their impact on business approaches. - 44 -
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