Gaming industry or Video Gaming industry is an area of entertainment that focuses on marketing, distribution, monetization, customer feedback, and development of games and video games. The gaming industry creates multiple job opportunities and employs hundreds and thousands of people across the globe. Today, we’ll discuss Porter’s five forces analysis of Gaming industry; bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.
Tech Supplies and Material for Video Gaming Industry
- PhysX
- Co-processors
- CPUs
- 3D graphic accelerators
- Graphic cards
- Sound cards
- Personal computers
Porter’s five forces analysis of Gaming industry would analyze the bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management. Here’s Gaming industry Porter’s five forces analysis of video gaming business as follows;
Porter’s Five Forces Analysis of Gaming Industry
Let’s discuss Porter’s five forces analysis of Gaming Industry as competitive forces in strategic management and they’re as follows;
Bargaining Power of Suppliers in Gaming Industry
The bargaining of suppliers is Moderate in the Gaming Industry as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in the Gaming Industry Porter’s five forces analysis of video gaming business are as follows;
I-Components & Supplies
Video gaming supplies are easily available in various countries across the world. Some of the main components and supplies required for playing video games are as follows;
- PhysX
- Co-processors
- CPUs
- 3D graphic accelerators
- Graphic cards
- Sound cards
- Personal computers
II-Suppliers Availability
The manufacturing suppliers of video gaming components have established a worldwide supply chain and distribution network. There are multiple supplier companies; they all offer the same type of components and gaming supplies. High-quality gaming consoles and equipment charge premium prices; and the others target price-conscious customers.
Bargaining Power of Buyers in Gaming Industry
The bargaining of Buyers is Higher in the Gaming business as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in the video gaming business five forces analysis of the Gaming industry are as follows;
I-Multiple Gaming Options
Video game users have significant bargaining power because they have multiple options from different gaming components manufacturing companies. They all offer almost the same type of products with some differences; gaming customers could easily switch from one gaming component to another without incurring a lot of cost and resources. It increases their bargaining power.
II-Quality, Performance, and Price
Premium quality material gaming consoles and online video games would charge premium prices. On the other hand, low-quality video charge low prices, and some of them are even free. The price of the gaming equipment and the gaming membership cost would impact the quality of user experience for gamers.
Threat of New Entrants in Gaming Industry
The threat of new entrants is Moderate in video gaming business and Gaming industry as competitive forces in strategic management. Some of the main factors impacting the threat of new entrants in the video gaming business five forces analysis of Gaming industry are as follows;
I-Tech Expertise & Investment
When it comes to developing video games, then it requires a high level of programming skill, a team of programmers and graphic designers, and advanced computer equipment and machines. All of this requires heavy capital investment and the new entrance doesn’t have a team of tech experts, high-tech machines, and billions of dollars of funding.
II-Marketing
Along with heavy capital investment, gaming companies need to invest a significant amount of resources in marketing, brand promotion, and game promotion. Nintendo, Lego, Sony, and Microsoft have established a strong brand name in the gaming industry.
Threat of Substitutes to Gaming Industry
The threat of substitute products and brands is higher in the Gaming industry as competitive forces in strategic management. Some of the main factors impacting the threat of new substitutes in the video gaming business five forces analysis of Gaming industry are as follows;
I-Multiple Alternatives
An ordinary user has multiple gaming alternatives and other entertainment options. The person could watch a movie, scroll on social media, or play free video games. Variety of entertainment options creates a distraction for users, they could easily switch from one option to another without incurring a lot of cost and resources.
Competitive Rivalry in Gaming Industry
The competitive rivalry among video gaming companies is very high in the Gaming industry as competitive forces in strategic management. Some of the main factors impacting competitive rivalry in the Gaming business five forces analysis of video gaming business are as follows;
I-Competitors
The Video Gaming industry has become highly competitive over the years. Ubisoft, Tencent, Sony, Nintendo, Activision Blizzard, Take-Two Interactive, Epic Games, and Electronic Art are some of the top competitors. It has become highly difficult for video gaming brands to develop, maintain, and stabilize their market position.
II-Research & Development
In order to gain a competitive, video gaming companies invest a significant amount of capital resources on research for developing innovative video games. It could be in the form of new gaming characters, unique gaming consoles, extraordinary graphics, and different settings of video games.
Conclusion: Gaming Industry Porter’s Five Forces Analysis |5 Forces Analysis of Gaming Industry
After an in-depth study of Porter’s five forces analysis of gaming industry; we have realized that video gaming industry is the world’s top-growing business. If you are learning about the Gaming industry 5 forces analysis of video gaming business; then you should keep in mind the abovementioned bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.
Ahsan is an accomplished researcher and has a deep insight in worldly life affairs. He goes Live 3 days a week on various social media platforms. Other than research writing, he’s a very interesting person.
