Task 3 Business Models

Explain the three business models of:

Arcade:

The arcade era was the beginning of gaming available for public to play. Though there were prototypes of games before this era came, this was what bought the prototypes and ideas for everyone to use and play. It started off with arcade machines. Though the first ever interactive ‘game’ was tennis for two, which’ business model was the same as consoles (introduced later) but this cost these were big boxes with a monitor / visual output device, connected to circuits that were programmed to boot up the interactive  interface otherwise known as the game.  Some games of this era were so popular that they entered the popular culture. The first to do so was Space Invaders. Following its release in 1978, the game caused a national shortage of 100 yen coins in Japan, leading to a production increase of coins to meet demand for the game.  It would soon have a similar impact in North America, where it has appeared or is referenced in numerous facets of popular culture. Soon after the release of Space Invaders, hundreds of favourable articles and stories about the emerging video game medium aired on television and were printed in newspapers and magazines. The Space Invaders Tournament held by Atari in 1980 was the first video game competition and attracted more than 10,000 participants, establishing video gaming as a mainstream hobby. By 1980, 86% of the 13–20 population in the US had played arcade video games,and by 1981, there were more than 35 million gamers visiting video game arcades in the United States.

Box, Ship and Done

The next era is the console era. At this point large and known companies wanted to make a console/Device that could play games made only for their specific consoles. For example, Sony made the Playstation and the Playstation would not be able to play Microsoft bound games. Likewise Microsoft and Nintendo also made their consoles and the games for these consoles were incompatible with each other. These companies wanted to make profits in a way that no other popular manufacturer would have a share in, and releasing consoles was the perfect way. This was a very revolutionary era for games as this meant gamers who spent time in arcades playing arcade games could buy a little console that would play the same games but at home! It is no surprise that companies involved in manufacturing consoles made a lot of money because the idea of having an arcade machine in a little box attached to your tv in your home was something everyone wanted. As consoles got more and more popular, games got restricted for example Nintendo was now making games exclusive to the Nintendo console(s) like Zelda or the Mario series. Unsurprisingly Microsoft also did this and started making exclusives only available to their console, the Xbox. Instead of having to put big arcade machines around town, manufacturers now had to box their console and ship it to retailers where the customers would (and still do) consume and that's it. 

Observe, Measure and Modify.

As technology advances, our ways of consuming and the manufacturer's ways of retailing have changed. Going from having just one game on one computer to arcade machines around the city available for anyone to come and play to having those arcade machines in a little console in your house. The next way of distribution is digital distribution. Though this is still a fairly new concept for consoles, this has been used by PC gamers for a long time now.Digital distribution meant we would not have to get up to go to the shop to buy the game which has been the case for the past 30 years or so. As long as you had the right console, internet and time, you can download the game and content straight from servers meaning online transactions are made in exchange for a digital copy of material. This was widely and mainly used on Pcs with Microsoft's own online distribution service called Windows Live and the major distributor, Steam.com.  Big competitive companies are as always, money hungry even with billions made. So slowly but surely, consoles caught up with digital distribution too. The Playstation started the Playstation Network (PSN). This way of distribution was (is) also enviormentally friendly meaning the game does not have to be written onto a disk, have a plastic box, then have the walk through and cover or shipped for retailers to put on shelfs over and over! The amount of digital copies sold or downloaded are not unknown because when someone buys a game online over a streaming service that gives you a download, that means they now have all the files required to play the game. Which is exactly how games are pirated and shared around on the internet without legitimately buying the game.It's also something that was definitely in the sales pitch when digital distribution was announced and is advertised.