Video Game Consoles: Evolution of Leader and Followers' Positions

Abstract

This chapter introduces the main market trends of the video game sector and analyzes the mutations of this industry. Video game sector is characterized by very high network externalities, a lock-in phenomenon, and the increasing technological complexity of consoles, which are also subject to cycles, a structural increase in game development costs, and the predominance of strategic marketing. Since the beginning of the century, this industry has witnessed major developments: the arrival of Microsoft in 2001 onto the game console segment, a growing interest of game publishers in other platforms, the dramatic growth of new platforms (mobile terminals), and the rapid development of online and downloadable games. In addition, this chapter addresses some of the most important issues in the field of strategic management: value chains and business models. These concepts are applied to the video game industry in the context of competitive intensity and modification of market structures.