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Game Industry Characteristics

Characteristics of Each Market

図表:各市場の特性
PC Online Market Characteristics

This is a 24.7 billion dollar market, forecast to grow to 26.6 billion dollars in 2019. The customer segment is primarily composed of core users who demonstrate the highest game loyalty. They have a fairly strong willingness to engage in ongoing purchases, and are unique for having the lowest sensitivity to price and economic conditions. In terms of profitability, PC Online is comparatively high among the three markets, typically generating stable earnings over the long term. Going forward, we do not anticipate any major changes and expect the market to remain stable.

Consumer Market Characteristics

(Package + Digital download contents)

Package and digital download contents are a 21.6 billion dollar market, forecast to grow to 25.6 billion dollars in 2019. The customer segment is composed mainly of core users with high game loyalty. They have a relatively high willingness to purchase sequels and a low sensitivity to price and economic conditions. This market is the lowest among the three in terms of margin, yet occupies a high position in the Japanese industry overall. Hereafter, we expect the digital sales ratio to increase, shrinking the gap between the other two markets' profitability.

Mobile Market Characteristics

This is a 22.5 billion dollar market, forecast to grow to 37.4 billion dollars in 2019. The customer segment is primarily composed of casual users, many of whom play games just to pass the time, thus they demonstrate the lowest game loyalty. They have a limited willingness to purchase games and have the highest sensitivity to price and economic conditions. Although this is the most profitable among the three markets, only a limited number of titles are able to generate stable earnings over the long term. Going forward, we expect rapid growth to make smartphones the most pervasive game device.

Five Competitive Factors in Each Business(Five Forces Analysis)

  Consumer
(Package + Digital download contents)
Mobile Contents PC Online
Threat of New Entrants NormalHigh capital and differentiated technology requirements Extremely highFew capital or differentiated technology requirements LowOngoing capital investment and cutting-edge technologies required
Threat of Substitute Services and Products NormalUsers somewhat compartmentalized LowFrom standpoint of mobility, low user outflow to other two markets NormalUsers somewhat compartmentalized
Buyer Power HighMany transactions with major overseas retailers with strong purchase power Low

Direct sales to users

Low

Direct sales to users

Supplier (Hardware Manufacturer) Power LowContent is flexibly compatible with all platforms LowContent is flexibly compatible with all platforms LowContent is flexibly compatible with all platforms
Degree of Rivalry NormalAppropriate environment at present, expected to soften somewhat in the future HighMany new entrants, tough environment Normal

Appropriate environment at present

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