Consoles

The video game industry consists of two main layers: the hardware and the software. The hardware aspect of the industry is comprised of the consoles. This portion of the industry is an oligopoly. It is controlled by three main players: Sony, Microsoft, and Nintendo. Due to this the barriers of the hardware portion of the industry is very difficult to enter. The software portion is comprised of many players. This portion industry directly affects the price willing pay for consumers. Many of the software companies pay royalties to the hardware producers for having their final products (games) compatible with their system. Many consumers make their final decisions upon which the types and abundance of video games that available for each console.

Growth Rate:

Even though this industry like the rest of the industries have seen a little obstacle in their growth due to the recession, this industry has seen a periodic growth in revenues from 2005-2008. This actually shows that this industry is very responsive on how they attract consumers and how it attacks the market. Both the hardware and software aspects are expected to see more growth by 2012.

Competitiveness:

The hardware aspect of the industry is controlled by three main competitors. This makes it difficult for any startup company to make a real threat in this part of the industry. This is due to the fact that entering the market has a need of high capital. Also competing with the well-established three will put further strain on assets and expenses.

The software aspect of the industry has many players which makes it easy to enter the market. Due to the high number of competitiveness it is really difficult to make a niche for the company. A software company must have highly knowledgeable programmers and marketers to even have a chance to have some recognition.

Technology:

The technology has rapidly advanced causing this industry to evolve rapidly as well. The computer processors and the...