EA Case- the online gaming market

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.)

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.

Peer-to-Peer File Sharing

Who will win the competitive battle between P2P file sharing networks and iTunes over the long run and why?

ezBoard Case

How should ezboard update their business model to reach revenue goals?

In the current business model, revenue comes from two sources: advertizing and subscriptions. However, there are problems inherent with both of these. In order to get people to pay, ezboard had to offer the subscribers a better experience than the free users. However, the baseline website still needed to be attractive enough to attract new and more casual users. The catch-22 of the subscription model, the Gold plan, was that it removed advertizing for subscribers to the plan, thus removing one of the two revenue streams. Other than the unpopularity of having advertisements on the boards to most of the users, advertizing had other problems. It was difficult for potential advertisers to effectively target potential customers in ezboard because only registered users provided any personal information that would aid in targeting. The key to improving the revenue model is to make the subscription version more appealing in order to attract new customers, but more importantly, focus on advertisements. The “ring” advertising concept was a good first step. This placed ads on all parts of the ezboard website with the exception of the message boards themselves. Ezboard must cater to potential advertisers by providing more of the targeting information that they need. In the current business model, only the subscribers have to provide this data. Ezboard should modify this policy so that all users provide it. Subscribers would get the additional features, but everyone would register. This would provide potential advertisers a wealth of critical information and should increase the revenue stream from advertisements. The upgraded search feature also provided information to advertisers. (This is important to note- the search feature wasn’t just added for its own sake. The CEO made a point of linking upgrades to potential revenue generation.) The steps needed to make ezboard more enticing to potential subscribers is outlined in the next section.

What services should they consider offering with the new Version 8.0?

To attract new subscribers, ezboard needs to consider offering several new features. Ezboard needs to make their product as good as or better than their main competitors; script products like vBulletin. Script products are downloadable bulletin board software that is newer and more flexible, offering more customization and features than ezboard, but the downside was that administrators had to install and maintain the software on their own servers, which required a high degree of technical knowledge to use. Also, ezboard had to convince customers that being part of a network of discussion boards rather than a separate stand alone board. The new software, Version 8.0, was to incorporate new features that would be simple for a novice user to apply. The following new services should be offered: enhanced search, calendars, multimedia like pictures and videos, instant messaging, blogging, and social networking features. These would all attract users that might not be initially interested in message boards. Some, like the enhanced search function, would help gain advertizing revenue as mentioned above. Also vital to emphasize, though it’s not really an additional service offered, is that Version 8.0 be a stable platform- crashes and unreliability lead to lost members and therefore lost revenue.