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A new generation of consoles, of ering better graphics and more
internet connectivity, will go on sale from next year, when Nintendo
releases the Wii U, the successor to the popular Wii machine. Micro-
soft and Sony are expected to follow suit in 2013 and 2014 with
sequels to their machines. But some analysts now wonder whether
dedicated games consoles have much of a long-term future. . . . the
coming generation of consoles will be the last. For all but the most
devoted users paying $300 for a dedicated machine . . . for a little
more, you can buy a smartphone or a tablet PC that has plenty of
other uses as well.
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In that regard, the shift to smartphones and tablet PCs in both capability
and costs is likely to get more attractive in the future. One might want to
go back and review Claudio Feijoó's chapter again and ponder who the new
entrant might be that disrupts the present competition in consoles.
ABOUT THOSE PUBLISHERS
Readman and Grantham (2006) assert that by supplying such functions
as fi nancing and promotion, it is the publishers who provide value in the
value change. That may indeed be true, but wonders how much value they
provide for stockholders. Among independent publishers, only Activision
Blizzard has been profi table these past two years (2010 and 2009). Ubisoft
has had loses of $52.1 million for 2010 and 43.7 million for 2009. It has
been fi ve years since Electronic Arts has been profi table (2006) with loses
of $276, 677, $1,088 and $454 million respectively for 2010, 2009, 2008
and 2007. Clearly it is a tough business acting between the fees of console
manufacturers and the royalties of developers. The industry has a history of
fi rms falling by the wayside (cf. Readman and Grantham 2006); it is likely
the trend is continuing.
AND THE MARKET IN EVOLVING ECONOMIES?
One of the questions posed to marketing students is: there is an island in
which none of the natives have shoes. Does that island represent an attrac-
tive market for a shoe manufacturer or a barren one? It would appear that
with regard to video games, such places represent an attractive one. China
has now replaced Japan as the second largest market for video games (Cross
2011) with sales growing 20 per cent last year. Thus, entry into the develop-
ing country market has begun. Piracy and high prices of consoles mandate
a dif erent business plan for entrants—possibly online games for PCs, but
we will see what we will see.
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