Macro Economic Factors Affecting the Video Game Console Essay

Demographic Factors Age is the main demographic factor light uponing the marketplace for photograph granulose eases although common misconceptions ar that the market is mainly comprised of teenagers. new-fangled Studies shows that the largest market sector of video gimpy console purchases are teenagers or young adults. ESA demographic data shows that Americas average biz gypers age is 34 and the average age of second purchasers is 40 (see article x) Generational factors play a big reference in the market sector of granularrs who purchase more than one granular console, buy the latest version and buy games into adulthood.In 2010 26% of gamers were oer 50. There is a definite generational factor as numerous of the consumers were in their teens when the mass video looseness culture began and now are in their 40s or 50s and cause retained their gamer status, therefore are withal ready to adopt new fruits. Gender is another factor that should be noted. Female gamers are a large portion of the video console market although significantly less than their online gaming counterparts.ESA research predicts that 40% of video game players are females. Economic Factors Household income studies have shown that video games in the toys and games market are able to gain a significant look at of the market the larger the average household incomes are of a apt(p) market segment or particular region. For video games to comprise of 15% market parcel out in toys and games of a given country, 60% of the commonwealth must earn incomes above US $15,000 (see figure x).Business cycle-The trade of consumer electronics andnovelty convergences are influencedby macroeconomic factors of a country. If there are recessionary or inflationary pressures, sales are likely to be affected sincechanges in consumers behaviour is determined by the perceived increase or belittle in the level of disposable income. This is, however, likely to have a short-change term electrical s hock and in the long run will have negligible changes on the sales of video game consoles, as line of work cycles return to a favourable position for higher consumer spending.Demand elasticity- photo Game consoles have a price elastic demand (for a portion of the consumer market) and combined with a high substitutability factors creates susceptibility to changes in competitors prices or quality hence impacting the size and share of the market for our product. Factors that change the cross price elasticity of our product lead to be considered and addressed.Technological Factors Innovation R&D- Technology, particularly technical innovation is a critical factor in the video game console market, and the leading competitors Microsoft, Sony, Nintendo have significant R&D invested in technology improvements. If our product development lifecycle does not include product improvements that are comparable to the leading competitors product, future succeeder will not be guaranteed. Co mpatibility Hardware issues include compatibility with existing calculating machine hardware and the ease and cost of switching to the use of new hardware.Our product has the earn of not requiring additional video output devices, i. e. television sets and monitors. Software information -Technological developments in the software developing industries with which we have partnerships and licencing contracts will affect the attractor of our virtual video game console and hence indirectly affect sales generated. Also grosss generated from licencing and subcontracting are dependent on the success of game software publishers a tactic to reduce risk would be to qualify the scope and use of our product, i. . develop a large partner social intercourse database.Political Environment Industry Regulation plays an important role in the success and growth of any technology specific product. It will eer depend on the industry regulations specified the country code of regulative law when production and manufacture will be conducted but similarly within the countries where target market segments reside. Ownership of manufacturing, distribution, and exporting firms also part in different countries and will need to be considered before open a worldwide market strategy.Trade Barriers -The trade and product spec restrictions on use of certain technology and/or products as puff up as licencing and exporting costs of the distribution and sale of various product categoriesdiffer between countries/regions and will have a large impact on the competitiveness of the virtual video game console. This can be in the form of trade barriers or indirect barriers by means of the use of wellness and safety standards, product labelling and advertising laws and restrictions.Intellectual Property Rights Legal issues in country of sale, aside from aforementioned industry regulations, include trademarks, copyrights, licensing, patent applications, online ownership, and revenue recogni tion. Piracy and counterfeiting issues will need to be considered. It has become an accepted practice session for the console manufacturers to lose money on the hardware and to recover the pass by charging high licensing fees to game publishers and developers.IPR standards are weakly enforced in many emerging markets with large market potential such as China, Brazil, and Russia. Environmental Factors Raw Materials The Video Game industry uses a lap of plastic resources and requires the use of scarce metals for its hardware. Given the negative public conniption on large amounts of non-biodegradable waste product, manufacturing processes and the use of valuable raw materials in the virtual video game console need to be guardedly considered.Energy usage and efficiency- The National Resources Defense Council (NRDC) recently published a study on American energy usage with specific wishing to game consoles and found that game consoles consume roughly 16 gazillion kilowatt hours a nnually(see figure x). These finding were based on the assumption that half(prenominal) of the consoles are left on or on standby later on use. A console that has timed automatic shutdown, as the virtual gaming console does, reduces this energy wastage.Health related concerns There is a normal perception that frequent video gaming has a negative impact on a person health. However this perception may down to change as research shows contrasting outcomes that there is the view that considers such side-effects to be relatively minor or temporary (Griffiths 2002) and that finds vie computer games is comparable to a mild intensity exercise with normal use, playing may neither improve nor harm physical fitness (Emes 1997)? cultural Factors Fashion Trends Video Game console purchases are often do according to similar purchases made in a consumers social reference groups.Word of mouth and peer reference can play a crucial role in the choice of video game consoles. Networkingcapabilit ies the ability to connect to a large number of players online through a portable console has a definite cultural factor as the popular use of online networks determine the success of the addition of these features. Recreational Alternatives- changes in the demand for video game console may be created through a shifting trend in choice of recreational methods. Advances in the market for other toys and games could play an important role.