Week 2 EOC: Gaming and the BCG

What average lazy American doesn’t love to come home after a long day, plop themselves on the couch, pick up their controller, load up Call of Duty, microwave some pizza rolls, and vegetate until it’s time for bed? I mean nothing is better than action packed entertainment then being the one in control of the action. In the 2016 world of interactive technology, streaming, and digital downloads gaming companies were thought be able to stay afloat the deepening sea of the recession. Now the big question, and what everybody ACTUALLY cares about, where do I invest? What is going to make me the most money? First let’s break it down.

Investing is hard, and if you’re like most people you have no idea what to do when you see a list of numbers and percentages. The Boston Consulting Group has kept use of the same growth-share matrix to establish quality classifications of a company’s strategic business units, or SBUs. They differentiate between four main categories. The first being Star which is a SBU with high growth, high share, and need large investments to support their rapid growth. The second is a Cash Cow. This type of SBU have a low growth, high share, and usually need less investment. The third category and type of company you’re less likely to invest in would be a Dog. SBUs that are Dogs are low growth and low share. They usually generate enough business to maintain themselves, but do not really profit or grow. The fourth and final category is question mark which are companies that could really go either way. These are usually new companies that have seen good and bad results and have to ability to either take off, or not. So what gaming company is the smartest to put your money into? First we should probably classify them based on their BCG category.

Let’s take a look at all of the gaming consoles and companies around the market right now. Some popular types include Xbox, Playstation, Wii, Steam Machine, virtual reality systems, and mobile games. They all offer tons of different games and genres of games to occupy your time with.

                First let’s find our star. In the past couple years we have seen the use and application of mobile devices skyrocket in all types of industries. Mobile apps and games are easy to download, affordable, and can be accessed almost anywhere at any time. I like to say we are living in the ADHD generation. Everyone has such a short attention span now a days that people don’t want to spend more than a couple minutes playing a game. They want something they can do while they wait in line for a couple minutes instead of having to glue their eyes to a television screen for hours on end playing the same game. People have given their time and money to apps and mobile games. According to “Flurry” a mobile analytics company “mobile app usage continued to see significant growth over the past year, with overall app usage up by 76% in 2014.” (http://techcrunch.com/2015/01/06/app-usage-grew-76-in-2014-with-shopping-apps-leading-the-way/) Usage of apps are growing very rapidly, and as user/device interactivity grows the need for fast, compact, mobile technology will as well.

                Now for our cash cow. For a very long time gaming consoles have been the standard medium for playing interactive video games. The basic idea is you get your box that you can put a disk into, a controller that handles the movement and navigation of the game and system, and a tv to project the image of the game onto. The neat thing about console games is that compatible games will always work. For instance, all Xbox 360 video games use an Xbox as their medium for playing and will work as long as the disk isn’t damaged, while with computers some game work on different operating systems or have several requirements that people cannot always meet technologically. Gaming systems like the Xbox 1 have online marketplaces where people can interact and “There are now 48 million active Xbox Live users, a 30 percent increase from the same period a year ago.”(http://www.ibtimes.com/microsoft-msft-q2-2016-earnings-xbox-live-shows-strong-holiday-growth-2284983) This online experience provides tons of room and possibility for growth with console games. Companies are now offering digital downloads of games which lets people not have to keep track of disks or deal with damaged disks, and there are new games constantly coming out which usually leads to an increase in the market of buying the gaming console that can support those new games.

                There are a lot of ideas in the gaming industry that could go either way in terms of success, but one competitor catching a lot of attention right now is virtual reality gaming systems. This is our Question Mark. There have been good results and bad results from virtual reality games. One problem many are coming to terms with in this kind of technology is that it is tough on our mental. A lot of people claim to experience headaches, nausea, dizziness, and other motion sickness related side effects when playing virtual reality games. On the other hand this kind of gaming is the most immersive way of playing yet and when it comes to serious gamers, interactivity is everything. With virtual reality you can be an actual part of the action without really being there. Many people are attracted to this idea, but virtual reality may be suited to an audience of serious gamers and while it is nice to have available, the market may just be too small to really take over.

                So lastly, let’s get to the Dog. So what is the last thing is the gaming community that you want to put your money into? Surprisingly the console I would have to put in this category would be the Steam Machine. Made by a company called Steam that provides a medium for downloading, streaming, and playing computer games. Computer games as a whole are losing their place in the gaming industry. Making a game that matches all the tech requirements and can be used on all operating systems is nearly impossible. With this obstacle in mind it is very hard for a computer game company to create a product that is usable by their audience. They will lose money and sales simply because people cannot use the game. I would think that streaming games would be a venture that our generation would pick up on very quickly, but the results from the Steam Machine prove differently. “By trying to appeal to everyone, the Steam Machine is instead failing to build an audience and is beginning to show the symptoms of a flop.” (http://gamingillustrated.com/why-steam-machines-will-fail/)