Console manufacturers market is relatively protected thus there are only three main players in this segment; two from Japan, Nintendo and Sony and one from the US, Microsoft.
Entry is restricted due to large costs involved such as $ 2 billion to develop a good competitive console as their returns are not said to be commensurate with the investment which may have a long gestation period. Console manufacturers gain income from the sale of consoles, the software to run the same as well as sales of royalty software from the developers who use the platforms over which the games are run.This has also developed tremendous competition between the three manufactures of consoles and machines are sold far below the price to achieve a critical user mass which will spread costs related to development as well. The value of a console enhances the attractive titles and the number of software paying royalty games which are played on it. On the other hand the games developers negotiate to place their games on consoles. Thus this develops a symbiotic relationship between the developer and the console manufacturers.Developers on the other hand have to adapt to different types of platforms with each console needing diverse areas of expertise and adaptability.
It is also essential that the developer publishes more than one game per platform to enable recovery of costs of development. Thus the console and game development cycles are being considerably lengthened. (Beinisch. Paunov, 2005). Kline, Dyer-Witherford and Peuter (2003) have indicated that the workers in the industry are said to be the most exploited as their enthusiasm for the game leads them to join up even at lower levels than their qualifications or value will permit.This however has led to denying innovation for the gamers in the long term. An audience which contributes has also been created which the authors find problematic.
(Kline. Dyer-Witherford. Peuter, 2003) Developing player communities has been the most interesting advance in marketing of games and is generally formed with the efforts undertaken by the game developers as Maxis. New Massively Multiplayer Online Games (MMORPGs) are increasingly exploiting the creativity of the user as he or she is able to create the game and watch the characters develop, while developers will manage the game and provide the creative tools.These will further cement the relationship between the console, developers and the consumers. Second Life, 3 is one example of such a game where the user creates the game and develops the characters as per their own creativity. These are self creating games which are facilitated by the developers.
(Beinisch. Paunov, 2005). These issues along with the video industry value chain evaluation covered earlier highlight the symbiosis of relationship between the console, developer and gamers. Literature Review – Tie in Video Games with Product – The Cadillac StoryTo promote its cars amongst the younger generation, Cadillac the car company which has an image problem of being identified with the older generation, has tied up with the Xbox gaming console of Microsoft to reach out to the youth. (Cadillac, 2006).
This was the first initiative by a company to interject its brand into an expansion pack within the Xbox 360 game Project Gotham Racing 3 (PGR3) which features three Cadillac V-series vehicles. Thus youth can drive the V series vehicles within the PGR 3 for which a download extension has been created.This enables them to experience the same characteristics as the real car including its handling, power and engineering characteristics. Play the gaming division of Publicis is reported to have negotiated this deal with Microsoft. (Cadillac, 2006). Co branding and tie in of products for mutual benefit is an increasing trend in the advertising industry and this is also being reflected in the games industry.
This has additional benefits for the customer as he is able to get a live experience in driving a model under near real conditions due to the high level of visuals captured in the video.