The game industry is a mult-billion dollar industry. According to some estimates it ist taking in over $10 billion in annual revenues. And the games played online are contributing an increasing chunk of those revenues. Therefore I found it quite interesting when I came across a paper written byTiago Reis Alves and Licínio Roque on business model design in massively multiplayer online games (MMOG).
Some still perceive MMOGs as toys for kids. But the games are typically quite sophisticated role-playing games or strategy games. Also, the average player is not the kid around the corner, but increasingly the average person – including women.
I find it terribly interesting to study and analyze this industry and particularly its diverse range of business models, because it is a very innovative domain. I believe we can learn a lot from the business designs tested MMOGs and mainstream them into more traditional sectors.
The paper I mentioned above is a first attempt to map some of the current networked business models in the Massively Multiplayer Online Player scenario. The maps outlined in the paper represent different value creation systems that the authors visualize by resorting to a concept they call “Value Net”. Overall is is a nice conceptualization of the networked business models in a strongly growing and highly innovative industry sector.
Two remarks :
1- I’ve seen for several years that the revenues from videogames accounted for more than $20 billions. (e.g. http://www.dfcint.com/game_article/nov03article.html). Do the $10 billions take only into account the US market?
2- Talking to someone from “hollywood” three years ago, she told me that the “more than Hollywood” statement was essentially a big lie. It should be read as “more than the box office” revenues, which is a very different thing. Indeed, the box office only represents something like a fifth of the incomes for a movie nowadays (licenses, DVD, … generate much more money)
Thanks for the additional information and precisions. Games have indeed only outperformed box office revenues, though that alone is quite impressive… It also shows a substantial shift in how people spend their spare time. Cheers, Alex