This is Management Essay.

Topic: Expose on Online Gaming Industry

· Two business models

· One that is continuously improving on one game (Riot Games)

· One that is expansive (Blizzard)

· Different Finance Models

· Microtransactions (Riot Games/EpicGames)

· More in-depth

· Monthly Subscriptions/Mandatory Microtransactions (Blizzard)

· Competitive Advantage

· Riot Games, Esports Sector High Market Share, Franchising

· http://variety.com/2017/digital/news/league-of-legends-north-america-league-teams-esports-1202619230/

· Houston Rockets, Rick Fox

· Security/Funding for Players

· Challenges

· Innovation

· Finances; Free-to-play/Pay-to-win

· Balancing

· Pokemon Go Failure Example

ONE PER PERSON, TAKE YOUR PICK

Main Topics

I highly suggest you include the following at the very least

· Finance Models -- Shannon

· Subscription

· One Time Basis

· Microtransactions

· “Unfair” Microtransactions

· https://www.intelligenteconomist.com/economics-of-microtransactions/

· https://www.rollingstone.com/glixel/features/dlc-loot-boxes-microtransactions-prize-crates-explained-w512762

· http://www.ijis.net/ijis10_1/ijis10_1_evers_et_al.pdf

· Process Improvements Concepts-Ray

· Waiting Line Concepts- Elibeth

· Market Target/Segment Analysis- Tsering

· Different Consoles

· Singleplayer/Multiplayer, Games that have both

· “Fortnite” - Younger Audience, Cartoony Graphics, Free-to-Play, Easy to handle for the computer

· “Counter-Strike” - Mature Audience, Loyal Fanbase Not much advertising Word of Mouth, Realistic Graphics, Harder for the Casual Player

· https://www.breakingthewheel.com/video-game-market-segmentation/

· https://www.gamesparks.com/blog/game-marketing-strategy/

Market segmentation is aggregating customer into different groups, or segments, based on different characteristics. Understanding your customer is a key point to survival in a market. We need to figure out who they are, what are their need and how can we serve those needs. This is a point where market segmentation comes in.

Majority of industries use one for all or one for each design. In one for all, a single product is sold for everyone whereas one for each is a customized version where every individual receive unique product. But in gaming industry one for some approach is used where there are many segments. Games can be practiced through different platforms such as online and console games.  Gaming console are played on a device specially made for game play called video game console while online games are played on a device such as PC, tablets and smartphone. This segmentation is based on customer needs. Some customer prefers consoles as they are a dedicated easily accessible form of playing their game. These consoles are usually optimized to handle any game no matter how intensive it may be, easy to upkeep, much cheaper compared to the PC in terms of quality to price, and are safer from viruses. Others may prefer PCs because of their customizability, much wider range of selection, and the convenience of only needing to download a game in order to play instead of needing a physical copy.  In present days online PC gaming has been gaining popularity over the console gaming as technology has been more portable and more indie games are being released.

Furthermore, this segments have sub segments which are the based on the types of users and their preference. For example, games for children vs adult or casual gamers vs pro gamers. For Instance, games such as “Fortnite” and “Counter-Strike”. They are both online gaming but are targeted to different clients. Fortnite is targeted towards Younger audience thus, their games has Cartoony Graphics and are easier to handle. In contrary, Counter Strike’s targeted audience are mature people. It consists of Realistic Graphics and it is intense and harder for the Casual Player.

· Waste/Lean MGT - Lily

· Unnecessary features

· Bugs

· R&D (Research and Development)

· Hackers

· Product Development-Devon

· Transparency

· Trying to get something out by the deadline but not “finished”

· DLCs (Downloadable Content)

· https://search-proquest-com.remote.baruch.cuny.edu/docview/1533430259?accountid=8500&rfr_id=info%3Axri%2Fsid%3Aprimo

· https://www.studytonight.com/3d-game-engineering-with-unity/business-context-of-game

· http://www.iadt.edu/student-life/iadt-buzz/may-2013/project-management-game-design-and-production

· Supply Chain Management - Hana

· https://pdfs.semanticscholar.org/afcb/7390c1b810f85a46646324daed35b4e7db1c.pdf

 

Group 7: Shannon Yanko, Tsering Sherpa, Han Oh, Devon Lui, Elibeth Gonzalez, Lily Chang, Jittranuch Kittironnkornkul

MGT 3121: Final Project

Gaming has been a fundamental and ever-developing industry in the entertainment market, with online gaming being one of the subdivisions that has expansively evolved within the last several years. It began in the early 1970’s when video games were introduced in just computer and arcade versions, but several years later the industry saw a decline in sales and revenue. As time went on, international companies like Nintendo entered the market and introduced portable console systems, which led to a huge skyrocket in sales. In the late 1990’s, with the help of  compacted discs and programming, the first Sony Playstation was released, which in turn led to a growth in user interaction with software.

Since then, because of technological proliferation, progressive advancements in hardware and software systems, and an incline in consumer awareness, online gaming companies have become a multi-billion dollar industry that has not stopped growing since. Some of their new features include mobile gaming, social gaming, massive multiplayer gaming, and free-to-play games. According to Statista Report, it is expected that by the year 2021, the U.S gaming market will generate revenue of $2.2 trillion and the amount of online gaming consoles will expand to 57 million worldwide. It is no surprise that gaming, more specifically online/mobile gaming has become such a successful business that continues to generate impressive revenue.

For several of the top online gaming companies there are different business and finance models that these firms use to operate successfully. For a companies like Riot Games and Epic Games, owned by Tencent, they have a very unconventional and unique business regime. Riot Games is famous for the game League of Legends, which is huge in the e-sports category and has approximately 67 million online active players. For their company, they focus more on the gaming experience rather than collecting revenue, so the game itself costs nothing for a gamer to download and play. Similarly Epic Games, which recently released Fortnite, that blew up in the online video game world, also created a free-to-play game for users to easily access. These companies have a business model that focuses on continuously improving a game every few weeks instead of dropping a big release or new version once every year. These companies have finance models that involve creating games that are available on consoles, mobile apps, or PC’s and run off optional microtransactions, which attract more users to their games because purchasing skins or items are mainly about preferences and doesn’t give players an advantage in the game itself. The reason these companies implement this free-to-play business model is because they have noticed that consumers have more of a willingness to pay for avatar outfits to customize their characters in a free game than become involved in a game that involves paying for, so in other words customers prefer real money transactions. Another reason they implement this business model is because of the way their games are laid out. In social games like Fortnite and LoL, the game is dependent on the involvement of other players so they have to keep their games free or consumers will lose interest.

For other companies like Activision Blizzard Inc. they have a more generic business model. This company prefers to focus on creating multiple globally successful titles as opposed to having one. Blizzard Games charges for every game they have released, and with the exception of World of Warcraft, they usually require only one upfront cost. However, with their game World of Warcraft, players have to pay a retail price to purchase the game and a monthly subscription fee. Online gaming companies like Blizzard also focused on expansion packs, which are add on features to the already existing game, that require consumers to pay for. With companies using more of a free-to-play business method, companies like Blizzard have seen a decrease in the amount of subscribed users which has limited their growth.

https://nexus.leagueoflegends.com/en-us/2017/01/dev-on-leagues-business-model/

https://investor.activision.com/static-files/7a7aca69-a7c0-4bd7-8a04-017cb77ffb96

https://www.statista.com/topics/1551/online-gaming/