Competition and Innovation in the Video Gaming Industry

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3) Based on your reading of Malerba, F. 2007. “Innovation and the dynamics and evolution of industries: Progress and challenges” International Journal of Industrial Organization, Vol. 25, No. 4, pp. 675-¬‐699, choose an industry and describe how its structure and current state of emergence affect competition and innovation.

Video games have had high demand over the past decade. Many titles such Call Of Duty and Grand Theft Auto make billions of dollars in profits. (1) What began as a small market in the late 1970’s has grown drastically over the years. Technology has improved so much that a Game Boy Advance in the early 2000’s that was worth $150, now fails in comparison to free apps for our phones today. There are emulators for the IPhone that can play the Game Boy Advance games. (2)

The structure of the Video Gaming Industry is comprised of several stages. The first stage is the Development Stage. (3) Currently there are three giants in the gaming world. Microsoft’s Xbox 360, Sony’s PlayStation 3 and, Nintendo’s Wii. For these consoles, there are companies that make agreements to release exclusive games. For example, one company can make games solely for Xbox 360. Another company can make games for a particular series offered by the Platform, such as Mario for the Wii. The most common companies are the ones that create games for all consoles, and have no agreement with any particular console.

The second stage is the Publishing Stage. (3) Once the game is developed, the company must then market the game to the masses. Each year a convention is held known as E3 (Electronic Entertainment Expo). (4) In this convention representatives for the consoles as well as game developers, provide background information, trailers, and dem...

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...trieved November 10, 2013, from http://www.cultofmac.com/247716/another-game-boy-emulator-sneaks-into-the-app-store/

3. Zhou, Z., & Xie, S. (2012). Chapter 7.Fundamentals of digital manufacturing science (pp. 257-260). London: Springer-Verlag London Ltd..

4. Electronic Entertainment Expo. (2013, February 11). Wikipedia. Retrieved November 10, 2013, from http://en.wikipedia.org/wiki/Electronic_Entertainment_Expo

5. Call of Duty Ghosts. (n.d.). GameStop. Retrieved November 10, 2013, from http://www.gamestop.com/

6. Video Games - Rent, Buy, and Download Video Games Online - www.gamefly.com. (n.d.). GameFly. Retrieved November 10, 2013, from http://www.gamefly.com/

7. Hyman, P. (n.d.). Gamasutra - PC Game Piracy: Why Bother With DRM?.Gamasutra - PC Game Piracy: Why Bother With DRM?. Retrieved November 10, 2013, from http://www.gamasutra.com/view/feature/1

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