Since the writing of the Electronic Arts Case the Sony Playstation 3 and the Nintendo Wii have been released and both have online gaming capabilities. What’s your assessment of the current online gaming market?
Online gaming is the future of video games. All of the major console game makers have online gaming capabilities. This is true for PC gaming as well. What was once the realm of first person shooters and role playing games like World of Warcraft, has expanded to all genre of gaming. Many new games are focusing less on the single player aspects of the game design and are focusing on the online multiplayer features. Many newer games do not have a single player option at all; it is all online and multiplayer. The target audience is expanding as well. Games like Madden and Medal of Honor represented the mainstay of the online gaming market—young males. But now that demographic is changing. There is a quickly expanding market of people, many of whom are older and female, that play “casual” games like cards online. These are simple games when compared to games produced by large developers, but they are attracting an ever increasing audience who enjoy the simplicity and social interaction (albeit limited) that they provide. These casual gamers are good targets for advertisers seeking to gain exposure to a market that is increasing astronomically. (A quick Google search shows that the potential for growth in the online gaming market is huge- up to $13 billion by the end of this decade.)
Thursday, February 19, 2009
Thursday, February 12, 2009
Netflix VOD
Since the publishing of this case, Netflix has entered the video on demand (VOD) market. What is your analysis of how Netflix has attempted to update their business model with VOD?
Netflix has always been an industry leader that has embraced new ideas and new technology. They were the first to distribute DVDs through the mail. Video on demand (VOD) technology was a direct threat to their DVD rental business. The full integration of streaming content on computers and televisions was not a question of if, but of when. The timing of mass adoption of VOD wasn’t clear, however, but it was clear that integrating VOD into the business model was central to the long term success of Netflix.
Netflix wisely prepared for the future; dedicating cash for investment in VOD for several years, even as it grew its core DVD rental business. Netflix realized that the main impediments to VOD (technology and content) were out of their control and more importantly beyond the scope of their core focus- movie recommendation (through their proprietary system) and movie delivery.
Their foresight is paid off. Netflix now has a “Watch Instantly” feature for no additional cost to subscribers with the most popular plan ($16.99 for unlimited DVD rentals, three at a time). Netflix brought onboard major movie and television studios. Subscribers can stream near-DVD quality movies and television shows on PCs and Apple computers. Netflix has also expanded the VOD from the user’s computer to their television by forming partnerships with electronics manufactures to stream their content directly to televisions; via Blu-ray players, Xbox 360, and also directly to certain HD televisions.
Netflix could not ignore VOD and hope to remain a viable company. Technology was evolving that may eventually replace the DVD (or Blu-ray, or any other similar media). By investing early, Netflix was able to leverage their experience and specifically their proprietary movie recommendation system to expand into the VOD segment of the home movie market.
Netflix has always been an industry leader that has embraced new ideas and new technology. They were the first to distribute DVDs through the mail. Video on demand (VOD) technology was a direct threat to their DVD rental business. The full integration of streaming content on computers and televisions was not a question of if, but of when. The timing of mass adoption of VOD wasn’t clear, however, but it was clear that integrating VOD into the business model was central to the long term success of Netflix.
Netflix wisely prepared for the future; dedicating cash for investment in VOD for several years, even as it grew its core DVD rental business. Netflix realized that the main impediments to VOD (technology and content) were out of their control and more importantly beyond the scope of their core focus- movie recommendation (through their proprietary system) and movie delivery.
Their foresight is paid off. Netflix now has a “Watch Instantly” feature for no additional cost to subscribers with the most popular plan ($16.99 for unlimited DVD rentals, three at a time). Netflix brought onboard major movie and television studios. Subscribers can stream near-DVD quality movies and television shows on PCs and Apple computers. Netflix has also expanded the VOD from the user’s computer to their television by forming partnerships with electronics manufactures to stream their content directly to televisions; via Blu-ray players, Xbox 360, and also directly to certain HD televisions.
Netflix could not ignore VOD and hope to remain a viable company. Technology was evolving that may eventually replace the DVD (or Blu-ray, or any other similar media). By investing early, Netflix was able to leverage their experience and specifically their proprietary movie recommendation system to expand into the VOD segment of the home movie market.
Wednesday, February 4, 2009
Peer-to-Peer File Sharing
Who will win the competitive battle between P2P file sharing networks and iTunes over the long run and why?
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