This chapter gives general ideas of the producer side of the market for virtual game worlds. This article mostly talks about creating virtual worlds for people to communicate and interact with one another. This chapter also goes over the current condition of the market and the major companies. According to the Castronova’s article, “The current market structure in this industry is the classic combination of a small number of dominant firms facing off against one another, while an army of small, innovative firms push in from the outside.” The major companies in Asia appear to be the Korean game company called NCSoft and Chinese firm Shanda, NetEaSE, AND Webzen. Whereas in Japan, biggest companies include Sony, which successfully created its Playstation video game console system and gained much popularity throughout the world. In the US, Micro Soft’s Xbox, Electronic Arts, Blizzard, etc are some of the very successful firms. European entertainment firms Ubisoft and Vivendi have made plays in the market, but so far without major success. One of the main reasons many companies failed to create a product that consumers want is that many suppliers fail to understand the kind of product they are making. Basically, they are not thinking in depth about players’ perspectives. It is indeed hard to create a product that satisfies every audience’s need. The reasons big firms like EA, Blizzard, MS, etc are keep growing bigger and bigger is that they are expertise in the category unlike those small firms. According to the reading, the need for experience people probably explains the market dominance effect in the industry today. Companies like NCSoft and SOE can rely on their internal expertise, built up from past experience, to avoid making the mistakes that can cause a design to go bad or a service to annoy its users into exile.” One create a game and run it in the US for under $5 million, but in order to be really successful in the area, one needs to spend as much as $20 -$30 million.
While many game firms are trying to succeed in gaming market, there is less alternative in production practices, and less in pricing models. In the reading they said there are two-part pricing model. One is by monthly fees, and another one of by expansion set, or the sequel set. One of the reasons Blizzard made much revenue from WoW is that players pay monthly fees. Also they make WoW sequels at least once in 2 years. Last but not least, they attract and satisfy players’ needs by updates.
I quit playing WoW only because it requires me to pay monthly fees. This made me feel like WoW is not attractive because it cost money to play, whereas, my favorite game StarCraft doesn't require a cent to play. The time i used to pay for a monthly subscription, I was forced to play as much as possible because I didn't want to waste the money I put onto the game. However, I have always been burden with a big load of homework every day and tests, so I always end up playing less than 20 hours a month, and I felt like it's waste of money. I think many other people would feels this way too.
Here is an interesting article about pricing model
Do you think spending money on video games is worth it?
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