Why I believe the computer game industry will remain successful despite an IT/economic crisis

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Barry, Colm
Issue Date
BA (Hons) Business Information Management
Dublin Business School
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The video game industry is one of the most dynamic industries around, constantly growing and evolving into something new. It would be interesting even it was only for its size. The Yankee Group, a technology research and consultancy firm released a report at the end of December 2001, revealing that roughly 36 million households in the United States own a video-game console (anon., www.gignews.com: Dec 2001). However, it is interesting because of the competitive battles that are consuming the industry, especially since the new entrant, Microsoft, have joined the field with their console, the Xbox. This has resulted in mass advertising, and it is almost impossible to escape television adverts exhalting the virtues of ‘The Power of the Xbox’, or Sony's cryptic ‘The Third Place’ ads, that do not even mention or show the console. Nintendo have also upped the ante with their new release, the GameCube. The industry is facing a very interesting period. In the past only two consoles were able to survive the market (Sega left the market and withdrew their Dreamcast), so how the market will react to three consoles, each offering different qualities, is an interesting debate. Finally as a person who enjoys games and owns a console, it is intriguing to look behind what makes a particular brand of console more popular than another. Will consoles continue to become more powerful or will a crisis in the IT industry force the companies to cut back costs and reduce the ambitious plans that the manufacturers seem to have?