GAMING INDUSTRY REPORT

Role-Playing Game

Abstract
This report was conducted to make recommendation to our company to launch RPG game. It
includes data of the current game industry, provides information about target customers and
major competitors.

Heng Luo
hengluo@email.arizona.edu
Per your request, this document is a report on introducing the type of game that our company
should launch. The content will provide you relevant information about the game and help you to
decide whether the company should launch it. I recommend our company to launch RPG game
on a console. In this research, I will analyze RPG game based on relevant industry, target market,
and competitors.

Role-playing game
The game type that I recommend is called Role-playing game (RPG). The definition of RPG is
that player will assume themselves as the roles of characters within the game story. RPG became
one of the most common game types because it provides players a fantastic story, game-play,
and a strong sense of immersion. One of its advantages is that RPG games can be adapted to
publish on almost any kind of platform, such as PC, game consoles, mobile device. Among those
platforms, game console occupies a large market sharing.

Relevant Industry
Industry Performance
The whole game industry is still dramatically growing. Since 2009 to 2016, the video and
computer game sales in the US increased from $10.1 billion to $24.5 billion. A huge increasing
of 48.5% in sales happened in recently from 2015 to 2016. Besides, companies are still keeping a
compound annual employment growth rate of 2.88%, which is much higher than the US annual
employment growth rate of 1.99% (Siwek, 2017). Based on these data, the game industry shows
a high performance, and it is becoming more profitable.

Video Publishing
Video game industry is relevant to many other industries to make it keep running. Video game
publishing industry is absolutely important that allows other video game producing company to
publish their product. During five years, the video publishing industry has boosted to an
annualized rate of 7.4% of revenue to $22.9 billion. In this industry, the main player- Activision
Blizzard Inc. has the largest market share of 14% (Alvarez, 2017). This means that publishing
video games through Blizzard can be easier to access to more customers.

Audio & Video Equipment Manufacturing

The production of video game relies on audio and video equipment manufacturing. In order to
produce reliable game carriers such as game disc and Cartridges. As for RPG games, sometimes
the game company publishing their game do not only provide their customers a single game
itself. Instead, they will also produce OST (original sound tape) of that particular game and sell
to their customers. However, the performance of this industry is steady, and the revenue forecast
is a growth of an annualized rate of 1.9% to $3.7 billion from 2017 to 2022 (Miller, 2017).

Target Market
Age of Target Customer
The target customer of our game should be males at the age around 18 to 45 years old.
According to the IBISWorld industry report, Alvarez provides us a graph (see figure 1), and it
shows that Men between 18 to 45 years old segment 36% of total market segmentation (2017).
Since now, young males are still the lifeblood of the game industry. They are willing to spend

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money on games, and the large demographics will guarantee more potential customers for our
game. Also, people around these ages are more affordable to buy game comparing with younger
teenagers.

Buying Behavior
As same with other types of consumers, gamers consider themselves as rational decision makers,
but actually they most of the time will experience an emotional process when buying products
(Kiviranta, 2017). Some factors such as brand and outside evaluation will indeed influence
people’s buying behavior. Therefore, grabbing their attention and keep their interests seem
necessary. Especially for gamers, they will spend time to get information before a game released.
Whether the game companies can maintain gamer’s interests will result in final sales of that
games. Gamers love to see a game gradually becoming what they expected before it launches.

Figure 1: Major Market Segmentation. Retrieved from IBSworld database.

Main Competitors
Composition of Market Sharing
The major six competitors in video game industry own 74% of market share, and others share the
rest of 26% market share. In these six competitors, Sony Corporation has the largest market
share of 19.8%. Their brand name is called PlayStation. In 2013, Sony Corporation launched
their eighth console generation PS4. The strong sales of PS4 result Sony in a 47.3% increase in
revenue in fiscal 2017 (Alvarez, 2017). Although those competitors like Sony and Microsoft
Corporation are very strong in the video game industry, they are video game publisher at the
same time.

Small Game Companies

Sometimes, the game produced by big companies may not be a best seller. Instead, some small
game companies and developers may be very competitive. A game called Xenoblade Chronicles
2 became one of the best seller games on Nintendo Switch (Surpassing one million unit sales
worldwide). The name of this game developer is called Monolith Soft, Inc. It is a small Japanese
company but it was funded by Nintendo because of their creative ability on new game design.
This represents that the quality of a game is the most important element. Player will result in
choosing the most interesting game instead of buying from their familiar companies.

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Marketing Strategies of Competitor
Console Success
As for video game console, the console companies such as Sony Corporation, Microsoft
Corporation, and Nintendo Co. Ltd are relying on their sale volume of game consoles. Game
console performance is a very important measurement to determine if it can bring a good game
experience to players. Thus, the successful game console is their most powerful way to adverse
games.

TV Advertising
The major game and entertainment companies use TV ads to advertise their both console and
games. According to Takahashi, the measurement generated by gaming industry commercials
from March 16 through April 15 shows that 19 companies spend about $34.2 million to run 65
different spots around 11,000 times (2017). Sony’s PlayStation occupied nearly half of total
advertisements. the result interprets that the bigger market sharing the company has, the more
they will spend on TV advertisement. You can see figure 2 for detail graph.

Figure 2: Gaming TV ads impression of major conpanies. Retrieved from: https://venturebeat.com/2018/04/22/playstation-once-

again-dominates-gaming-industrys-most-seen-tv-ads/

Advertising Platform for Game Publishing

PlayStation 4 or XboxOne will provide an effective platform for other game company to publish
and adversities their game. For example, Sony’s PlayStation Store is not only a place for selling
game but also can players find a lot of upcoming news about new games before game producers
actual launch their games to the public. Similarly, some events, for example, Electronic
Entertainment Expo (E3) and Tokyo Game Show (TGS) will provide game developers with
opportunities that allow them to share games with billion players at worldwide.

Public Interest
According to the annual report of the Entertainment Software Association, RPG genres occupied
12.9% of all best-selling game genres. Nearly half gamers purchase games without having tried
them. Also, most gamers consider that games are more valuable for them to spend money (the
Entertainment Software Association, 2016). Nowadays, gamers prefer to play games with
someone else. Thus, RPG game is a good platform for gamers’ social network.

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Price Point
As for a high-quality console RPG, the price setting needs to be around $20 to $60 depending on
the degree of game development and sales budget. In addition, I recommend adding expansion
for additional content and updates of this game that allows gamers to choose. Normally the
expansion price is about $10 to $30 depending on the content of expansion.

Overall, this report was developed to provide information of the current game industry and the
possibility of launching an RPG. The purpose aims to recommend our company to launch RPG
games and help to choose a right direction and target specific customers. Please consider this
proposal while deciding and developing what kind of game to launch. If you have any question
or need additional information, I will be pleased to meet you. Please contact us at
hengluo@email.arizona.edu.

Works Cited

Alvarez, A. (2017, November). IBISWorld Industry Report 51121e. Retrieved From: IBISWorld
Database.

Alvarez, A. (2017, November). Video Games in the US. IBISWorld Industry. Retrieved From:
IBISWorld Database.

Kiviranta, H. (2017, May). Women as Video Game Consumers. Retrieved From: Theseus
Database

Miller, D. (2017, October). Computer Peripheral Manufacturing in the US. IBISWorld Industry
Report 33411b. Retrieved From: IBISWorld database.

Semeraro, E. (2018, Aprl 22). PlayStation once again dominates gaming industry’s most-seen
TV ads. venturebeat.com. Retrieved From:
https://venturebeat.com/2018/04/22/playstation-once-again-dominates-gaming-industrys-
most-seen-tv-ads/

Siwek, S. E. (2017). Video Games in the 21st Century: The 2017 Report. Entertainment
Software Association. Retrieved From: TheESA database.

the Entertainment Software Association. (2016). ESSENTIAL FACTS About the computer and
video game industry. Entertainment Software Association. Retrieved From: TheESA
database.