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Ending strategysummary2
1. What future changes will affect the insurgents and incumbents? Will it be a fight to the death? Let’s meet the challengers!
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3. A Few Social and Economic Catalysts of Change Market growth will be focused in emerging economies. Free to play, pay as you go, games like Farmville will fit better in emerging markets. Many will have never touched a console and will play their first game on Facebook. Aging populations in high income countries. In many countries, the future involves more older gamers who are more likely to play games like Farmville than Call of Duty.
4. What about future disruptive technologies? In emerging economies, mobile devices will be a dominant computing platform. Mobile devices are likely to work better with social games. Big budget games benefit from cutting edge graphics and large tv screens. 3D television and motion control still exciting and new. Both new 3D technology and Wii-style motion control favor the traditional big-budget business model.
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6. What should the Incumbents do? Invest in social gaming as a diversification strategy. For example, Electronic Arts acquired Playfish. Tie-in blockbuster game releases with social game sister-products. This leverages strong brands in the social gaming space. Cater to older and non-traditional gamers. This was the key strategy of the Wii, allowing them to compete for casual gamers who would otherwise play social games.
7. What should the Insurgents’ strategy be? Fundamentals of the business model are sound. Smaller budget games, microtransitions, the “fast follow” model of copying and outdoing innovative games is a strong path forward. Focus on games that serve emerging markets. Social games are positioned to capture much of the growth in gaming in these new markets. Diversify onto other mobile and PC platforms. Facebook still has a huge influence over companies like Zynga. Moving social games onto other platforms reduces the power of Facebook over Zynga.
8. In conclusion… Social games are bound to take market share in the near future, largely due to emerging markets. But they will not replace traditional games. Publishers following the traditional model must enter the social gaming market themselves in a big way to risk losing out on that growth.