The Microeconomics of the Computer game Industry

Tommy Deen

November twenty eight, 2006


The Microeconomics with the Video Game Sector

Video games have already been around for many years with many various kinds of consoles and games. The video game industry has grown into a $20 billion dollars dollar market over the past 10 years, and that only displays signs of growing larger in the years to come. In the usa alone, industry has grown noticeably where 60 per cent of all Americans play game titles, 40% will be women, and 60% coming from all gamers happen to be between the age ranges of 25 through forty-four years old (games-advertising. com). In respect to an article on Gamespot. com, experts estimate which the video game category will have about 50 to 55 more square feet of shelve space in Bargain by the 12 months 2007.

The video video game market is an oligopoly with only a few firms competing in the market. The " Big Three" businesses in the gaming industry's oligopoly are Microsoft, Nintendo, and Sony. Microsoft's Xbox 360, Nintendo's Wii, and Sony's Ps3 all promote similar products and contend for consumer's us dollars. Each firm closely watches the moves of the other companies when considering costs, technology, and marketing of the games. Additionally, they compete with the other person to gain exclusive licenses to game software so they can provide console distinctive games.

Price wars are common inside the video game market. In the United States, Microsoft's Xbox 360 high quality edition was launched at $399. 99 in November 2005. Sony lately launched all their Playstation 3 for a price of $599. 99. Nintendo produced their system, Wii, on the low price of $249. 99. In addition , Microsoft company and Sony are selling all their video games to get $60 whilst Nintendo is definitely selling their very own video games pertaining to $50. Nintendo definitely provides the advantage in the video game industry's price wars.

In the video game sector, the demand is often high, however the supply is definitely low, which will creates a scarcity. This occurs during the release of new games consoles. For example , the moment Microsoft's Xbox 360 system...

Cited: " Blu-ray Dvd Association" twenty-three Nov. 06\

" Gaming Demographics: Gaming is An Adult Point. " Games-Advertising

Feldman, Curt. " Game Drives Growth, New Retail Approach. " GameSpot News of sixteen Jun. 2006

" Razor and blades business model" seventeen Nov

" The economics of a video game craze" 17 Nov. 2006

" Xbox" 19 Nov

" Xbox 360" 21 November. 2006

" Xbox 360 console launch into 400, 1000 units? " 8 November



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