Game Industry: Booming? Still Alive But Suffering

29Oct12

Mark claims in MW book that game industry is not just about “fun and games” anymore, it is a “multibillion dollar industry that has effectively challenged and recently fused with all the major other cultural industries”. As important and influential it is, game industry is witnessing an era of shock and strike.

According to CBS News, companies in the video games industry have begun releasing their earnings reports for the latest quarter. Take a look at these examples:

· Microsoft Corp. says Xbox 360 platform revenue fell 24 percent, or $418 million, mostly because of fewer   consoles sold and lower revenue from video games software.

· Nintendo Co. says it narrowed its losses in the six months through September, but the Japanese game maker lowered its sales and profit forecasts for the full year ahe ad of the launch of its new Wii U home console.

· GameStop Corp. says it plans to open about 80 holiday stores aimed at younger kids. The stores will feature video games, accessories and licensed products for younger kids. This includes Activision’s “Skylanders,” as well as “Angry Birds” toys and mugs and the Lego series of video games.

Media has different opinions towards this industry, casting doubt on its ability to sustain revenue loss. New York Times reports that in the first eight months of this year retail sales of video games plummeted 20 percent in the United States. NYT believes there are two factors contributing to the decline:The struggling economy since young men — long a core audience for games — were hit so hard during the recession; another factor is the democratizing, disrupting effect of less expensive digital downloads has changed the business model.

Yet another optimistic report from NYT tells its audience that video games industry  is expected to continue growing at a  rapid pace for several years to come, with game-related spending reaching $112 billion by 2015, among which the fastest growth is likely to come in mobile gaming. At the same time, pay models for online games are starting to fracture, creating a number of new online-style transactions that don’t exist with physical sales of games made for traditional consoles.

In addition to revenue problem, media find that game industry is faced with other challenges, especially companies outside of the U.S. One article believes that the Japanese game industry’s death has been exaggerated because they’re not dying, they just don’t know how to market themselves: they failed to get the attention of Western gamers. Titled “Welcome to Russia, where most of your friends are video game pirates”, another report concerns about the copyright situation of video game industry in Russia. A piece of more interesting information is that Chinese gaming giant NetEase opens pig farm. NetEase, which runs the hugely popular 163.com web portal, announced revenues of two billion yuan (£199m) in the second quarter from its massively multiplayer online games and other services, decided to diversify its investments by entering an industry that is better insulated from user whims and government interventions.

by Feiran

Here go the links to the news pieces mentioned above:

http://www.cbsnews.com/8301-505250_162-57541336/how-the-video-games-industry-is-faring/

http://www.nytimes.com/2012/10/07/arts/video-games/video-game-retail-sales-decline-despite-new-hits.html?pagewanted=all&_r=1&

http://bits.blogs.nytimes.com/2011/07/05/video-game-industry-continues-major-growth-gartner-says/

http://www.uproxx.com/gammasquad/2012/10/japanese-game-industry-death-has-been-greatly-exaggerated/

http://kotaku.com/5955739/welcome-to-russia-where-most-of-your-friends-are-video-game-pirates

http://www.theregister.co.uk/2012/10/19/netease_pig_farm_china/

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