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  • PC Games, Financial Gains and Consumers: An Issue of Control
  • This paper addresses the problems faced by a struggling PC game industry and discusses how the level of control affects the ability of users to add value to the industry. In addition, the paper views reasons for why control is required, how it is currently being executed and where it fares poorly.
    The research question is: “Can firms increase profits by reducing control?” and is split into sub-questions which are answered throughout the paper.
    Chapter 1 explains the current state of the computer game industry, highlights the economic reasons for why companies desire control and details the problem of distinguishing between pirates and legitimate customers.
    Chapter 2 presents the video game value chain, and discusses each level of the chain in sequence, covering the capital & investment, design & creativity, distribution and hardware & complementary software levels. Each level adds financial value to video games, and each level presents control issues where the level of control that is currently maintained has possible negative effects on financial gains.
    Chapter 3 discusses business models where control is reduced in some way to the benefit of companies that use the models. These models are all in use by successful companies, and are therefore tried and tested models with proven benefits.
    In chapter 4, the conclusions are presented, showing that certain levels of the value chain can benefit greatly from reduced control, mainly due to the increased input of users and company-community interaction resulting from that reduction in control. The limitations of the study and recommendations for further research are also presented in this chapter.

  • 12.5.2010

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