Pest Deg Gaming Industry free essay sample

PEST DEG Analysis for Gaming Industry Gaming industry includes those corporations that develops and distributes gaming and entertainment products through software programs and gaming hardware such as consoles, arcades, game gadgets and other technologies. Political-Legal †¢Intellectual Property Rights Intellectual Property Rights (IPR) is a term that covers patents, trademarks, and copyright. This law helps understand that all great products and innovation have an origin such as various video game consoles produced by different corporations. IPR are essential to reward and give credit to innovative thinking and protecting innovators’ ideas. This ensures that the creator(s) get what they deserve and gets a reason for their creativity. (Opportunity) Reference: http://www. publishyourarticles. org/career/career-opportunity/intellectual-property-rights-management. html †¢Special Interest Groups Special Interest groups play a significant role in politics and are both influential in encouraging and preventing public policy. There are many special interest groups in the industry and its growing number has put more opportunities and restraints on marketers. Below are some several major advocacy groups in the industry. The Entertainment Software Association (ESA) is the U. S. association exclusively dedicated to serving the business and public affairs needs of companies that publish computer and video games for video game consoles, personal computers, and the Internet. This group helps protect the industry from risk in business and public relations The ESA offers a range of services to interactive entertainment software publishers including a global anti-piracy program, business and consumer research, government relations and intellectual property protection efforts. Opportunity) Reference: http://www. theesa. com. One of the major advocacy groups that put restraints in the gaming industry is the Entertainment Consumer Association, is an advocacy group in the United States that opposes legislative efforts to â€Å"unconstitutionally† restrict access to interactive entertainment and looks to protect consumers from outside forces, w hich try to mould their behavior. This makes game development companies establish consumer affairs department to help formulate policies that resolve and respond to gaming consumers’ complaints. Threat) Reference: http://sites. duke. edu/soc142-videogames/political-deterinants/special-interest-groups-as-important-political-actors/ Economic †¢Economic Resources Land, labor, Capital, and Entrepreneurs are classified as the four categories of economic resources. The resource labor consists of the physical and mental talents of individuals in producing goods and services. The services of Graphic artist, IT professionals, Programmers, Computer Engineers and technicians and other labor resources that can be vital to the Gaming industry. As regards to the supply of labor, it depends upon the size of total population age composition of the population the availability working population the working hours devoted to production the remuneration paid to the workers, etc. Land may refer to the natural resources that can be used in production of process, such as minerals, raw materials such as copper, metals, and others. These resources can be used for producing computer hardware. Capital resources include all manufacturing aids used in producing goods and services. Included are all factory, storage, transportation and distribution facilities, tools and machinery. Lastly the entrepreneur is a resource distinct from labor. The entrepreneur performs several functions; as an organizer who takes the initiative in combing the resources of land, labor, and capital to produce goods or services, who makes strategic business decisions that sets the course of an enterprise, An innovator who produces new product, new ideas, new production and who is a risk-taker can make more innovations in the gaming industry. All of these resources are combined to produce goods and services, they are called the factors of production or simply means inputs. These can be a factor of good production for the gaming industry if a certain economy manages the scarcity of its resources. (Opportunity) Reference: http://www. economicsconcepts. com/the_economic_resources. htm †¢Inflation Rates and Risks Inflation is a general increase in the level of prices or a fall in the value of the money. This means year after year money is spent gradually less and less. This tends to decrease the purchasing capacity of a currency. Inflation causes uncertainty which increases the risk. Higher risk causes businesses such as video-game companies would not likely do investments on such economies. (Threat) Reference: http://www. economywatch. com/inflation/risk. html http://tutor2u. net/business/external/economy_inflation. htm Socio-Cultural †¢Violence caused by video games Studies on violence in video games have identified five major negative effects on children. Playing violent games leads to increased physiological rousal, increased aggressive thoughts, increased aggressive feelings, increased aggressive behaviors, and decreased pro-social helping. While the mediums of study have varied between the various tests, these studies have all shown that playing violent games causes increases in aggression. In a yearlong study of elementary school students, those students who played more violent video games early in the school year were observed to have become more physically aggressive later in the school year. This also changes the views of minors on themselves and society. Some video games were not well regulated by its developers and rated its game that is suitable for adults. Actual limitations to a child playing violent games are quite minimal. (Threat) Reference: http://sites. duke. edu/soc142-videogames/social-factors/case-study-2-can-a-video-game-lead-to-murder-a-study-of-grand-theft-auto/ †¢Youth Sub-Cultures One of the well-known groups in the society today are the youth sub-cultures because they are the society’s trendsetters in fashion, music, entertainment, ideas, and attitudes. Generation Y were considered to be the dominant youth sub-culture today. The variety of youth sub-cultures includes Goths, Hipsters, Emos, Gangsters, Punks, Metalheads, Gamers and others. The Gamers segments are the best target for the Gaming industry because they bring the concept of gaming through their styles, values, and interest not just playing video games but also in promotion of the brands through music, clothing, languages and styles they used that can influence other members of the society. (Opportunity) Reference: http://www. annoyingdesign. org/blog/2008/04/04/defining-%E2%80%9Cyoung-consumers%E2%80%9D-cliched-subcultures/ http://www. optenz. net/top-10-youth-subcultures. php Technological †¢Research Development For the R Ds of Gaming industry it really takes time, effort, and money for a new innovation and a major breakthrough to come. There are now several types of technologies which enhance gaming and the development of gaming consoles such as Cloud Gaming, Motion Control System, Augmented reality and other innovations. As what the m ission of the developers of PlayStation the SCEA stated, â€Å"Through innovation, design and engineering, SCE US RD enables a rich user experience for PlayStation consumers. Play, listen, watch, learn, discover, communicate, create, and share â€Å". Today Sony is under way on its research and development for the PlayStation 4. With the entire rate that gaming industry develops, there will be more technologies that will be developed in the Gaming industry in the near future. (Opportunity) Reference: http://www. psuni. com/sony-is-under-way-on-research-and-development-for-the-playstation-4-8955/ http://www. research. scea. com/SCEA_RD. html http://www. cognitiontech. com/? p=367 †¢Creative Destruction Every new technology is a force of creative destruction, the idea is that when businesses reach a steady state of maturity and future growth is unlikely, entrepreneurship often unleashes an innovation that destroys the old industry and restarts the growth process. Creative destruction occurs in all business sectors and industries, but at a high frequency in the technology business. Aside from the tech industry, innovation is the eventual cause of creative destruction in most large, slow growth industries. Internet has been also observed as an agent of disruption in a many industries and will likely disrupt more in the coming years. Music was the first to go, but now news, politics, commerce, advertising, marketing, film television, human resource management, operations and finance have all been disrupted by Internet-based innovations. (Threat) Reference: http://earnedmedia. wordpress. com/2011/06/26/creative-destruction/ Demographic †¢Population Age Mix National Population varies in their age mix. A country with a very young population and rapid population growth is a good factor for gaming industry such gaming consoles, computers and other gaming gadgets are consider to be one of the demands of these population. From school-age children to teens and even young adults are mostly targets of the industry. Countries with a very young population are likely for gaming industry to easily market products and services. (Opportunity) Reference: http://michiganstate. academia. edu/vitak/Papers/390879/Teens_Video_Games_and_Civics †¢Population Explosion This has been a major concern and many countries with highest population and communities that can’t afford due to the long-term capacity of an area is been degraded by its current human occupants. If rapid population growth is not regulated and resources needed for the human population on an area is not enough, results to inflation which is the increase of prices of goods and services that can affect the purchasing power of markets, unemployment that can decrease the labor productivity and even high crime rate. Marketers of gaming industry can find opportunities out of this problem if markets are carefully analyze. (Threat) Reference: http://www. articlesbase. com/economics-articles/population-explosion-unemployment-4072491. tml Environment †¢Regulations of Electronic Wastes The continuous development of technologies such as electronic equipments including video game consoles and other hardware has given a rise to a new environmental challenge: E-waste. Electronic waste, or e-waste, refers to electronic products that no longer satisfy the needs of the initial purchaser. There are wide varieties of these wastes and one of these wastes contains electronic game gadgets such as consoles, disc, and others as a result of discarded product due to obsolescence. These pieces of equipment contain hazardous materials such as lead, beryllium, mercury, cadmium, and chromium that pose both an occupational and environmental health threat. Although electronic equipment is considered safe during use, the potential for release of the toxic constituents increases during storage or disposal. The ranking criteria of the Guide to Greener Electronics takes into account two main components: if they clean up their products by eliminating hazardous substances, and if take back and recycle their products responsibly once they become obsolete. Just what the observations of Nintendo’s effort on reducing e-waste was scored zero and as one can see that Nintendo produces product with the highest quantity of harmful substances and has no to little programming focused on recycling on its obsolete products. This started to attract the attention of many environmental advocates, organization, and Greenpeace has called for a boycott of Nintendo products. (Threat) Reference: http://www. environmental-expert. com/Files%5C6063%5Carticles%5C9020%5C1. df http://sites. duke. edu/soc142-videogames/social-factors/case-study-4-nintendo-an-icon-of-e-waste/ †¢Corporate Environmentalism Integrating environmentalism to a firm’s strategic plan is also a way of recognize the importance of environmental issues faced by the industry. This is an opportunity for companies to develop their image in the market through go beyond the basics of complying with the law, cutting wastes, and operating efficiently. There are some aspects to a chieve eco-advantage such esign innovative products to help customers with their environmental problems or even creating new eco-defined market spaces, Partnering with NGOs, Environmentalist and other stakeholders can help firms learn and find solutions to environmental problem and an eco-advantage culture can be a part of the mission through building ambitious goal setting, incentives, training, and tools to engage employees in this vision, and even using the function of environment management departments on firms have help firms to achieve environmental strategy. (Opportunity) Reference: ttp://greenbizedge. com/eco-advantage/what-does-a-company-seeking-eco-advantage-look-like/ Global †¢Emerging International Markets Game developers have begun capturing emerging international markets in developing nations; size of the population, have rising incomes, and modest savings. When Qualcom and Tectoy launch its low cost Zeebo game console, they underscored the critical importance of emerging international markets for the gaming industry. Brazil, India, and so as Russia are the emerging markets that open opportunities for the gaming industry. By ignoring traditional markets, Zeebo made a strong statement about the future of the gaming industry: The profitability in targeting games to these emerging international markets. The success of Zeebo has shown the gaming industry that traditional markets, such as the United States, Japan and France, are no longer the only markets with which to be concerned. Publishers are increasingly turning their attention to emerging international markets, as more people worldwide are gaining access to the technology and software to support gaming systems. This means that language solutions and thoughtful localization are becoming essential to increase brand recognition internationally and create a presence in these new international markets. (Opportunity) Reference: http://www. alsintl. com/blog/emerging-international-game-markets/ http://sites. duke. edu/soc142-videogames/international-trade-patterns/main-play ers/emerging-players/ http://www. businessweek. com/magazine/content/09_27/b4138054201249. htm †¢Challenges in Global Supply Chain Management With increased globalization and offshore sourcing, global supply chain management is becoming an important issue for the industry. Like traditional, supply chain management, the underlying factors behind the trend are reducing the costs of procurement and decreasing the risks related to purchasing activities. The big difference is that global supply chain management involves a companys worldwide interests and suppliers rather than simply a local or national orientation. Most companies in the gaming industry are operating in global markets they consider factors that can be a threat to their supply chain management. 1. Time, is a very big issue that should be addressed dealing supply chain management. Customers always demand for just-in-time delivery pushes suppliers to juggle multiples of transportation. There are many factors that affect can company’s lead time either it gives a positive or negative effect. 2. Overall cost which includes the cost for the labor, space, tariffs and other expenses related to business overseas. . Transportation, a product can either be shipped through cargo ships or in planes. Problems in transportation was also identified for example, the extended time for a ship to deliver the products can affect negatively on a company’s lead time, or even natural disasters can delay the shipment of products. 4. Labor disputes can be a threat that can affect the labor productivity. 5. Outsourcing which include selection of suppliers outside can be an issue for marketers in the distribution. Comparing vendor bids from within the companys parent-country can be difficult enough but comparing bids from an array of global suppliers can be even more complex. 6. The always unpredictable impact of natural disasters. 7. Security threats such as terrorist attack and pirate some cargos. 8. The number of plants that are needed, as well as the locations for those plants can pose difficult logistical problems for companies. The more a company lacks the flexibility of its supply chain, in terms of sourcing and logistics, the more vulnerable a company will be. (Threats) Reference: