Wednesday, October 12, 2011

Week 2 EOC: Boston Consulting Group - Video Games

A leading company that has been gaining popularity over some time now is Apple. Their video game apps which cost little to nothing are becoming stars."Stars are high-growth, high-share businesses or products. They often need heavy investments to finance their rapid growth. Eventually their growth will slow down, and they will turn into cash cows." (Marketing An Introduction 10th Edition p11) For example the very popular game entitled Angry Birds has sky rocketed and can now be found on Google chrome as well as many other phone systems such as on Android. Besides the game other products of the game have been created such as plush toys and clothing which have also been selling. This app may eventually slow down, but mobile games are definitely more convenient and in demand then normal video games and video consoles. PS3 and Xbox 360 are both consoles that most people have, but the need to buy them have gone down and both company's are experiencing price cuts which puts them into a the Cash Cow category. "Cash cows are low-growth, high-share businesses or products. These established and successful SBUs need less investment to hold their market share. Thus, they produce a lot of cash that the company uses to pay its bills and to support other SBUs that need investment."(Marketing An Introduction 10th Edition p11)  The price of a PS3 console has already gone down from $300 to $250. Especially the demand for video games has slowed down because games can now be updated online without having to actually buy a new game.  Popular games that are released every so months are the only ones that people choose to wait in line for purchase. Even with a loyal following from a certain niche of people online gaming has been fading into the background and hasn't been heard of or made a great scene in any advertisements. These types of games belong in the Question Mark category. "Question marks are low-share business units in high-growth markets. They require a lot of cash to hold their share, let alone increase it. Management has to think hard about which question marks it should try to build into stars and which should be phased out."(Marketing An Introduction 10th Edition p11) Any decision re-guarding these games are crucial for the company or game. These decisions can be hits or misses and basically have a 50/50 chance of  becoming popular again or shutting down completely. Sadly a childhood gaming company system I feel has lost it's strengths and have become part of the Dogs category. "Dogs are low-growth, low-share businesses and products. They may generate enough cash to maintain themselves but do not promise to be large sources of cash."(Marketing An Introduction 10th Edition p11) The Nintendo DS was not doing so well with their regular products over an amount of time and has now come out with another handheld in 3D format.  If consumer's didn't want the product regularly, then I don't think a 3D feature will be enough to increase the demand for it. Anything 3D itself is coming to pass and offers nothing more then increased movie prices and headaches.

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