Comprehensive Analysis of the Video Game Market: Strategies and Trends

This report offers a comprehensive analysis of the video game market, examining its external environment through a PESTLE analysis, which includes political, economic, social, technological, legal, and environmental factors. The report also investigates the factors that contribute to success within the market, such as the influence of Generation Y and the use of Free-to-Play (F2P) models. Furthermore, a value chain analysis is conducted to assess the internal activities of Electronic Arts (EA), identifying key areas like inbound logistics, operations, outbound logistics, marketing and sales, and service. Finally, the report evaluates the competitive landscape, highlighting EA's strategies and its competition with Activision Blizzard, including the use of marketing tactics like NFL for video games.

Running head: ANALYSING VIDEO GAME MARKET
Name of the student
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Author’s note

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ANALYSING VIDEO GAME MARKET
Table of Contents
1. PESTLE analysis of the video game market..........................................................................2
2. Factors for success within the video game market................................................................3
3. Value chain analysis of video game market...........................................................................4
4. Competing within the video game industry...........................................................................5
References..................................................................................................................................6

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ANALYSING VIDEO GAME MARKET
The advancement in the technological forefront has brought about a revolution within
the current video gaming industry. The video games market has been seen to interest the
youth in particular owing to their inclination towards technological aspects. In the current
study we have tried to highlight the different factors for success within the video game
market, which has been analysed with the help of a PESTLE and value chain analysis.
1. PESTLE analysis of the video game market
The external environment of the video game market can be analysed with the help of
a PESTLE analysis. Here, PESTLE stands for Political, Economical, Social, Technological,
Legal and environmental analysis.
Attributes Factors
Political  Political disharmony can affect the supply chain of
Electronic Arts (EA).
 The games with high action sequences had been banned for
enticing communal disharmony and violence.
Economical  Revenue in the video game market had been falling for the
past few years.
 The Electronic Arts (EA) started taking advantage of the
Free-to –play (F2P) momentum where a certain enticing
game was made available for free download till a certain
fragment of the game ,after which the player had to pay as
subscription charge for playing the rest portion of the
game. The F2P was used as a marketing gimmick by
Microsoft during the launch of XBOX ONE (Arts, 2018) .
Social  Video games are played by more than half of people within

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an age group of 30 to 49 years of which 32-38% are
women. This could be attributed to the increased
penetration of the mobile phone gaming market (Kowert,
Vogelgesang, Festl & Quandt, 2015).
 Playing a pro-social game can help in the development of
positive social behaviour (Daim, Justice, Hogaboam,
Makinen & Dedehayir, 2014).
Technological  The online connections are getting faster which makes
downloading of the video games easy and just a matter of
fact (Daim et al., 2014).
 However, restrictions are faced from the software interface
as one could find in the windows phone which makes
installing hi-tech games difficult.
Legal  Censorship possesses a huge threat for video game
producers and could lead to legal issues.
 The distribution rights are only provided to the video games
on passing the Pan European Game Information (PEGI)
certificate (Huntemann & Aslinger, 2016).
Environmental  Promoting environmental friendly activities in order to
reduce the carbon footprints during manufacturing the
products.
 Generating efficient devices which reduce electricity
consumption.
Table 1: PESTLE analysis
(Source: Author)

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ANALYSING VIDEO GAME MARKET
2. Factors for success within the video game market
The success within the video game market could be analysed by conducting a Value
and Lifestyles (VALS) segmentation. The generation Y is heavily influenced by technology
and internet. Therefore, banking upon them for tipping the sales of the video game industry
would be a practical good option. The success of the video game market could be guaranteed
by expansion of the current market as well as seeking out new market (Kowert et al., 2015).
As commented by Thomes (2015), the consumerist choices are the sole driver of the video
game industry. Here, the sole desire of the gamer to continue with a piece of enticing game
could help in adding more revenues to the gaming industry. Therefore, the gaming needs to
be designed in a more visually and intrinsically motivated manner. As commented by
Caroux, Isbister, Le Bigot & Vibert (2015), relational processing in designing visually rich
and lexically complex advertisements has been seen to capture the attention of the youth
more. Additionally, the F2P policies can be affective in promoting word –of –mouth
promotion of the online games. As per the experiences type of the VALS methodology, the
Gen Y have been seen to follow the fashion and fads while making their game choices
(Huntemann & Aslinger, 2016). Therefore, the gaming industry needs to plan an effective
marketing strategy.
3. Value chain analysis of video game market
The value chain analysis helps in analysing the internal firm activities by recognising
the most valuable activities. The analysis helps can help in the identification of the source of
competitive advantage for the brand.
Section Analysis
Inbound logistics  The majority of the raw materials of EA are digital and

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are handled or managed virtually.
Operations  EA develops markets and distributes video game software
throughout the world.
Outbound logistics  EA has distribution centres across the world but primarily
focuses on North America and has a growing distribution
presence in Europe (Arts, 2018).
Marketing and sales  They have a strong marketing department and develop
and push new versions of games very year.
Service  EA offers downloadable contents of updates for their
games through consoles and PC (Arts, 2018).
 They also allow free download of many bug fixes.
Table 2: value chain analysis of EA games
(Source: author)
4. Competing within the video game industry
One of the prime competitors of EA was the Activision Blizzard. Both the companies
had games in the top ten lists, but Activison had maintained a consistent position of number
one on the home consoles ("Activision Blizzard", 2018). The EA on the other hand were
hoping to entice gamers and engage them to spend more money on the consoles (Arts, 2018) .
However, EA’s use of NFL for video games in the form of madden football was one of the
marketing gimmicks used by the company to attract new base of gamers.