Thursday 8 January 2015

Structure – The Value Chain

 Structures – Chain Values 
Developers:

Games developers are involved in the creation and production of games for personal computers, games consoles, social/online games, arcade games, tablets, mobile phones and other hand held devices. Their work involves either design including art and animation or programming. Games development is a fast-moving, multi-billion pound industry. The making of a game from concept to finished product can take up to three years and involve teams of up to 200 professionals. There are many stages, including creating and designing a game's look and how it plays, animating characters and objects, creating audio, programming, localisation, testing and producing. The games developer job title covers a broad area of work and there are many specialisms within the industry. These include:

Quality assurance tester
Programmer, with various specialisms such as network, engine, toolchain and artificial                intelligence
Audio engineer
Artist, including concept artist, animator and 3D modeller
Producer
Editor
Designer
Special effects technician.

Typical work activities

Responsibilities vary depending on your specialist area but may include
Developing designs and/or initial concept designs for games including game play
Generating game scripts and storyboards
Creating the visual aspects of the game at the concept stage
Using 2D or 3D modelling and animation software, such as Maya, at the production stage
Producing the audio features of the game, such as the character voices, music and sound effects
Programming the game using programming languages such as C++
Quality testing games in a systematic and thorough way to find problems or bugs and recording precisely where the problem was discovered
Solving complex technical problems that occur within the game's production
Disseminating knowledge to colleagues, clients, publishers and gamers
Understanding complex written information, ideas and instructions
Working closely with team members to meet the needs of a project
Planning resources and managing both the team and the process
Performing effectively under pressure and meeting deadlines to ensure the game is completed on time

Publisher:

What do game publishers do and what it is about:

Provide finance for the entire industry. This is not just paying studios, in stages, to develop a game. It is also the publishing costs which can often be far, far more. For one top console game the total cost is now into the tens of millions, so this isn’t insignificant. However, some development studios make the big jump to self-financing their work, and then they own the IP and can choose how it is published.

Take the risk. This is a pretty big job, especially for current generation console games, most of which don’t make a profit. This is partly why many of the world’s biggest publishers are making losses just now whilst the industry booms.


Market the game. It is a simple fact that with zero marketing a game will have zero sales. The game industry is a very young and fast changing industry so much of its marketing is inefficient and over expensive. This means that many publishers aren’t doing a good job here, another reason for their losses. However what marketing expertise there is in the industry resides mainly with the publishers.

Create and build brands. A lot of the industry for a long time just piggy backed other people’s brands, so had no equity in their IP. We used films, books and celebrities. And it wasn’t good. Now the industry is growing up and nurturing its own brands with some startling successes GTA and a lot of painful growing pains.


Physically manufacture, warehouse and distribute inventory. Logistics. This is a huge pain. Vast amounts of plastic and cardboard are used to move digital information around the world. The problems boggle minds. Just getting the timing of everything and the inventory levels right is impossible, it will always go wrong. So retailers are out of stock of one game whilst another game is remaindered in the discount bin.

Manage the whole industry. People only buy consoles to play games. The games are everything. And the publishers have total control over the games. So they have total control and power over the industry. So they decide what happens, how it happens and when. A big responsibility and, to be fair, they tend to try and act for what they perceive to be the good of the industry. We don’t have any significant Enrons yet.


The most important thing about the traditional game publishing business model is that there are enormous competitive advantages of scale. The bigger you are the easier it is to run your business, if you much smaller than the biggest players then you simply cannot compete. This is why we have seen so much publisher consolidation; the laws of economics mean there should only be a handful of global publishers. It is what happened to film and recorded music. However events are not just conspiring against global publishers, they are conspiring against publishing per se.

The cost of making games is, in many cases, coming down. This is partly down to better tools, libraries and middleware. It is also down to the far smaller scale of product required for many platforms, including some of the big ones like XLA and XNA. This means that we have returned to the age of the bedroom coder, or to loose affiliations of a few people working together on a project. This has become massive. There are now more games being developed this way than in formal studios.

With the above the risk has come right down. You make a game in your spare time, if it works you buy a fast car and a holiday, if it doesn’t you just shrug your shoulders and try again. This is exactly what happened in the old 8 bit days.


Platform proliferation. This has really crept up on us. About a decade ago there were two viable platforms, the PlayStation and the PC. Now there are lots. Xbox 360, PS3 and Wii, each of which is multiple platforms because of the online offerings. Xbox 2, PSP, DS, iPhone, Android, nGage and of course the PC, which is also now multiple platforms with casual gaming, MMOs, portals, boxed games etc. etc. A big global publisher just cannot do it all any more, they have to cherry pick.

Product proliferation. It used to be very simple, there were a handful of genres and it was easy to keep up and publish a stream of releases into each one. Now we have total fragmentation, infinity of genres. Just look at the thousands of iPhone games to see how diverse and sometimes bizarre gaming has become. This has left the big global publishers dead in the water, they don’t understand what is going on and even if they did they are too slow witted and cumbersome to do anything about it.

Marketing has changed and much of it is now free or nearly free. The traditional big publisher marketing model of throwing millions at television advertising is outdated, inefficient and an immense waste of resources. But they continue because of inertia and because they know no better. These days we have something called the interweb and with no money or very little and a little time you can run a very effective global marketing campaign. And the smart people are. Pop cap is a prime example.


Digital distribution. This is the big one. Without plastic and cardboard it is difficult for publishers to justify themselves. As we have seen with iPod, once you remove physical inventory most games come to market without a publisher. This leads to an explosion in creativity as tens of thousands of new games appear that a publisher would never have given the time of day to.

Brands. The publishers have actually been mostly very bad at creating and building brands. It is a new thing to most of them and they don’t know what they are doing a lot of the time and it shows. Individuals can build brands too. They often have in history. All it takes is an instinctive feel for the brand experience they are creating, the brand image they are presenting to the world and the brand values they need to maintain and they have cracked it.

Console Manufactures/First Party Publishers:

In terms of manufactures and the consoles which they have produced I am going to talk about PlayStation, Sony. Sony has introduced several generations of consoles so far starting with the highly popular PlayStation 1 which was one of the most successful consoles of the 5th generation boasting sales of over 100+ million units worldwide, it was also the first console to achieve sales of over 100 million units, which achieved 9 years and 6 months after it was initially launched.

The next console that Sony produced was even more successful. PlayStation 2 which sold over 150+ million units over its life time, gaining the title of the bestselling console of all time, the PlayStation 2 had more than 3,800 game titles released for it generating sales of over 1.5 billion copies.

The PlayStation 3 followed the PlayStation 2 with it being released on the 11th of November 2006, generating sales of over 75 million units, which in comparison to the PlayStation 2 was disappointing, however it did mark some interesting advancements in the game technology, such as Blu-ray discs being used in place of conventional CD's and the integration of downloadable content including games and purchasable in-game content.

The PlayStation 4 has been announced and is due to hit stores on the 15th of November 2013. This new console aims to incorporate a social aspect not seen on other consoles; this is by adding new share button to the dual shock 4 controller which will allow the player to stream their gameplay directly to friends.

Microsoft has also found a large place in the console market and is Sony’s main competitor in the console war. Starting with the Xbox Microsoft attempted to take on Sony’s PlayStation 2. However this was a large challenge even for Microsoft and so the original Xbox generated sales of only 24 million units, which was dwarfed by Sony’s sale of over 150+ millions PlayStation 2 units. This was partly down to its original controller design, which was deemed too bulky and later exchanged for a smaller version.

Microsoft then created the Xbox 360, a second attempt to take on the might of the PlayStation. This new console boasted an improved controller, and increased capabilities online, as well as a revamped Xbox Live service. Microsoft sold out of Xbox 360s on release in all regions except Japan. In 2009 IGN rated the Xbox 360 as the sixth best video game console of all time. The Xbox 360 has sold over 87.2 million units worldwide so far, which tops sales of the PlayStation 3 by just over 3 million units.

Microsoft has recently announced the third in the series of the Xbox console, the Xbox One. The Xbox One is to be released on the 22nd of November 2013. The console received mixed reviews at its E3 release, some commenting that Microsoft were trying to punish their loyal customers with a strict restrictions, such as the restrictions on the re-sale of games and their polities surrounding the consoles online mode. However the Xbox One does include an expanded Xbox Live service, improved Kinect functionality, cloud computing, the ability to automatically record and share videos highlights from the gameplay and integrated support for live streaming gameplay online.

First party publishers are the companies that make the hardware like games console that games are played on specifically Sony, Microsoft, and Nintendo. And now that mobile phone based platforms are emerging companies such as Apple or Samsung.

These companies are the gatekeepers of the industry, as they decide whether or not to approve each game targeted for development on their respective console platforms. They have an immense amount of power and influence over what gets released which titles get priority marketing.

First party publishers provide support to develop and publish on working on their particular platforms.

Distribution and Retail:

Distributing Games/Access Games 

Game
HMV
Xbox Market
Amazon
Gamestation
PlayStation Store
Steam
ITunes
eBay
Apps Store
CEX

Old Distribution:

Retail Centric – Physical Store
Reliant on the manufacture and supply of the games disc and packaging
Requires more initial outlays by the games publishers to produce the disc and box into their profit
Limited space in store so limited stock and also the choices

Modern Distribution:

Games available online
PlayStation network is free if you own a PS3
Xbox Live is subscription based
App Store download on apple devices 
Other online services

Retailing is basically after the companies has approved a type of game they distribute the game to gaming stores to be stacked up on the shelves to be sold and they do this around the world in any gaming store and the company makes the profit on selling those games and also the people that sells them in the retail business gains profit. Overall the retail stores has become bigger and bigger it shows that a higher percentage coming in and gaining a huge amount of profit.

Outsourcing Companies:

Outsourcing is when a company contracts with an outside provider for services or other business processes, rather than employing staff to do these services in-house. These services may be provided on-site or off-site. Typically outsourcing is done with an eye toward efficiency and cost-saving for the company. Outsourcing could be as simple as hiring a freelancer to edit a company newsletter or as large-scale as hiring an outsourcing company to handle all accounting and payroll functions.
Outsourcing can be when a company directly hires an independent contractor to a provide service. Or a company may hire an outsourcing company that either employs or contracts with workers to provide the services.

An outsourcing company may send workers to its client's workplace or provide the work space. Sometimes outsourcing companies practice home shoring by hiring home-based workers or they may practice offshoring, by contracting outside the client’s country for the services.

Press and Media:

News that is sent out or released by the company making the news. If it's an earnings press release the release will discuss the company's financial results for the recently completed quarter and may provide comments from management. Press releases often list valuable contact information that can assist investors in their research such as the company's web address, contact and address information. In that press this is when they might talk about releasing a certain type of game and they talk about the new product or a special event talk about it to the public and describe about it and what it is like by trying to get the audience’s attention on your type of product.

Media is when after the games is released the public talks about it and gives it a review on what the game is like they might put a rating on a game out of 10 and explain in detail why the game could be good or bad and this could get the audience and the people’s attention that are interested in the game and they might want to buy the game or not by looking at the reviews this also helps them by watching videos telling the people that watches them to either give them a choice on what they want to do.









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