HA1 Task 4 – Business Models

Arcade

1970's - 1980's
Games developed by developer/publishers who distribute them via their own arcade machine situated in a variety of locations. Coins are used and the financial transaction is clear. In 1978 there was a national coin shortage in Japan when Space Invaders was introduced, This involved a large investment, but clear financial returns. Open to public and usually found/located in public areas example: Seaside, Town, shopping centre, Airports. Income came through the coins.

Box, Ship & Done

1980's - 1990's - 2000's

Distributed and developed by Developers/publishers, distributed via their own bespoke console both sold from retail outlets, it is a closed community and was very lucrative; if you didnt have the console then you werent able or would not have access to to popular games. This resulted in people having there own private consoles homebrew consoles games became popular for example Nintendo, Microsoft & Sony. The inconsistency in the spec of home computers meant that few of the larger developers and publishers got involved. Microsoft, Sony and Nintendo became dominant after Sega pulled out of hardware manufacture in 2001. Games used cartridges which meant you would have to officialy buy them however Sony etc started to use disks (Playstation 1) and many people were able to get things free or play/access games free.

Observe, Measure & Modify - (Present)

Content and technology to this present day have progressed amazingly and still are in the process of advancing. There are going to be no physical goods as to the the amount of content distributed digitally is increasing. There isny a need to manufacture, transport, store and distribute game content on a disk. This is very cost effective for publishers but opens the market up. You are able to download on demand and have things at ease all is required is a high internet connection. Because gamers connect online, developers and publishers can watch patterns emerge and respond to them. The gamer is becoming part of the development team. User generated content will allow games to develop organically. Digital distribution becomes the norm and onlive.co.uk start to offer cloud gaming without console. Consoles are beginning to view Television (iPlayer, Netflix, Lovefilm) and with the explotion of smart phones, tablets on demand tv services. Income of these types wouldnt just come from selling the console it would come from games, services, micro transactions etc...

Instead of getting up and going to an arcade to play games you have it all at the click of a button. Also decideing how games are developed alogside of the modifying terms. comanies make their money through online gaming and people making there accounts may have to pay (Xbox live subscription). Also some games may charge you to play online on a certain game, you would have to purchase an online pass.

Sources
Space invaders -  Google search space invaders 1978
Space invaders machine - http://www.google.co.uk/imgres?hl=en&safe=active&biw=1280&bih=843&tbm=isch&tbnid=kcpKdThCkCRy2M:&imgrefurl=http://www.neogaf.com/forum/showthread.php%3Ft%3D452993&docid=yyvufY3JDJulBM&imgurl=https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibHvYMeHY7_55rh8nKzWtgRTEhKskz4ruvZXr-Cp4UJgE70tizJrPc9FS34HRzZWC01a1Mk5oKGIX6PaxSP51O9Ob9R82iM92emeapINVroqd74t7nZfrhExzuuTRuM8g1CeNFDZ6DRk2h/s1600/186271-space_invaders_super.jpg&w=404&h=693&ei=FStbUJ_hKvOp0AX9pYGICg&zoom=1&iact=hc&vpx=689&vpy=108&dur=3416&hovh=294&hovw=171&tx=105&ty=111&sig=112483201877432268002&page=1&tbnh=156&tbnw=91&start=0&ndsp=24&ved=1t:429,r:3,s:0,i:77
Arcade - http://www.google.co.uk/imgres?hl=en&safe=active&biw=1280&bih=843&tbm=isch&tbnid=Kw29nflSnlfwlM:&imgrefurl=http://www.corporateleisure.co.uk/Arcade-Games.aspx&docid=FpBDaTLDhE3idM&imgurl=http://www.corporateleisure.co.uk/assets/images/arcades/arcade.jpg&w=400&h=400&ei=WitbUP_qLqmi0QWJlYDoBg&zoom=1&iact=rc&dur=78&sig=112483201877432268002&page=1&tbnh=146&tbnw=155&start=0&ndsp=20&ved=1t:429,r:1,s:0,i:71&tx=104&ty=40
PlayStation 1 - http://www.google.co.uk/imgres?start=180&hl=en&safe=active&biw=1280&bih=843&tbm=isch&tbnid=N8smYIkkQtDbXM:&imgrefurl=http://hhh316.deviantart.com/art/Playstation-1-3d-model-163426458&docid=ZgOX0zYn6P8uCM&imgurl=http://www.deviantart.com/download/163426458/Playstation_1_3d_model_by_hhh316.jpg&w=800&h=480&ei=XC1bUNnOL6rD0QX2zoEg&zoom=1&iact=hc&vpx=173&vpy=517&dur=733&hovh=174&hovw=290&tx=130&ty=56&sig=112483201877432268002&page=8&tbnh=144&tbnw=199&ndsp=25&ved=1t:429,r:0,s:180,i:6
Nintendo -  Google images search Nintendo 1990
Cartridges - http://www.google.co.uk/imgres?start=213&hl=en&safe=active&biw=1280&bih=843&tbm=isch&tbnid=6mw2SJWVM317zM:&imgrefurl=http://boingboing.net/2012/01/04/retrode-a-usb-game-cartridge.html&docid=bixOwbTSWIzNsM&imgurl=http://boingboing.net/wp-content/uploads/2012/01/retrode.jpg&w=600&h=465&ei=5zBbUIK0HKHE0QXJjoHIDw&zoom=1&iact=hc&vpx=692&vpy=2&dur=93&hovh=198&hovw=255&tx=123&ty=56&sig=112483201877432268002&page=9&tbnh=149&tbnw=192&ndsp=30&ved=1t:429,r:15,s:213,i:146
Playstation 3 Slim - http://www.google.co.uk/imgres?hl=en&safe=active&biw=1280&bih=843&tbm=isch&tbnid=5KwH37k0ai4xaM:&imgrefurl=http://uk.playstation.com/ps3/&docid=00OVPJZ_eWmoaM&imgurl=http://uk.playstation.com/media/252644/Main_PS3_Image_345w_2-02760.png&w=345&h=200&ei=QTBbUMOEOKOh0QWon4GoDA&zoom=1&iact=hc&vpx=957&vpy=546&dur=32&hovh=160&hovw=276&tx=190&ty=175&sig=112483201877432268002&page=1&tbnh=121&tbnw=209&start=0&ndsp=22&ved=1t:429,r:21,s:0,i:134
Apple products - http://www.google.co.uk/imgres?hl=en&safe=active&biw=1280&bih=843&tbm=isch&tbnid=gaGDIhSmj7OYlM:&imgrefurl=http://www.cultofmac.com/145500/7-inch-ipad-mini-to-launch-alongside-ipad-3-rumor/&docid=0ALnDw4VnXqlYM&imgurl=http://cultofmac.cultofmaccom.netdna-cdn.com/wp-content/uploads/2012/02/ipad-mini.jpeg&w=620&h=378&ei=WTBbUMSYBcKk0QXRzIEQ&zoom=1&iact=hc&vpx=388&vpy=179&dur=890&hovh=175&hovw=288&tx=197&ty=96&sig=112483201877432268002&page=2&tbnh=116&tbnw=191&start=20&ndsp=26&ved=1t:429,r:1,s:20,i:139
Game Networks - http://www.google.co.uk/imgres?num=10&hl=en&safe=active&biw=1280&bih=843&tbm=isch&tbnid=wZsEPFXr_VhsFM:&imgrefurl=http://www.xboxic.com/news/5403&docid=NrGbgrXOvVGkrM&imgurl=http://files.xboxic.com/xbla-tidbits/xboxlivepsn.jpg&w=484&h=250&ei=gDRbUImmEKPA0QW13oDwDQ&zoom=1&iact=hc&vpx=920&vpy=170&dur=936&hovh=161&hovw=313&tx=236&ty=70&sig=112483201877432268002&page=1&tbnh=101&tbnw=196&start=0&ndsp=20&ved=1t:429,r:4,s:0,i:83

Variable Costs – Gross profit and gross profit %

Variable costs are those expenses in your business that increase or decrease with the level of your sales. For instance, if you sell hamburgers, your variable costs would include the cost of the meat, the buns, condiments as well as packaging. As a general rule, your variable costs can always be expressed as a percentage of your sales. For instance, if the cost of buns, meat, etc. for a hamburger that sells for £1 is 60p or 60%, then you can assume that if you sell ten hamburgers or £10 in sales that your variable costs will be 60% of that or £6.

With this data you can figure your gross profit and gross profit percentage.

Sales - Variable Costs = Gross Profit

£1 – 60p = 40p

Gross Profit ÷ Sales = Gross Profit Percentage

40p ÷ 100p = 40%

This is a very important concept because it allows us to determine the net effect of increases and decreases in sales.

  

Fixed Costs – Net profit

Fixed costs are those which you will incur whether you have any sales or not. These would include such items as rent, utilities, certain labour, insurance, etc.

Unlike variable costs, fixed costs do not increase or decrease with changes in sales. Therefore, the greater your sales, the less of an effect your fixed costs will have on your net profits.

Here's how to determine net profit:

Gross Profit - Fixed Costs = Net Profit

Fixed costs are only valid within a certain range of sales or activity. If sales exceed that range, fixed costs will jump to a new level. For example, you may be able to produce 100 hamburgers per hour with one employee; however, to produce more than that you would have to hire more help.

  

Break Even Point

The break-even point is, as the name implies, the level of sales where you neither make money nor lose money.

It is the level of sales where the gross profit is the same as the fixed costs. Using our hamburger example, we will assume fixed costs are £400, we have £1,000 in sales and our gross profit percentage is still 40%. Since we sell hamburgers for a £1 each, we must sell 1000 hamburgers to break even.

The break-even point is important for two reasons: one, it lets us know what volume we must sell to keep from losing money. And two, with a little modification, it will also tell us how much we must sell to produce a given amount of net profit.

Monitoring

Once you have set up the budget, compare it to the actual figures every month, to look for differences and establish why they are there.

Adjust expenditure or sales efforts as you go along, to bring the next group of numbers in line with the budget.

Franchised IP

Since the release of the first novel Harry Potter and the Philosopher's Stone on 30 June 1997, the books have gained immense popularity, critical acclaim and commercial success worldwide. The series has also had some share of criticism, including concern for the increasingly dark tone. As of June 2011[update], the book series has sold about 450 million copies, making it the best-selling books series in history and has been translated into 67 languages, and the last four books consecutively set records as the fastest-selling books in history. Beginning in 2001, EA Games began releasing adaptations of the Harry Potter films. Originally they were released for PC, GBC, GBA, and PS1. Then, with the arrival of new generation consoles, XBOX, PS2, and GC versions were created for the second game. NDS and PSP versions were made for the fourth, and in the fifth game, Wii and PS3 versions were released.

http://urduitlearning.blogspot.co.uk/2012/04/harry-potter-and-goblet-of-fire-pc-game.html - image

Serialized IP

Max Payne is a third-person shooter video game developed by Finnish developers Remedy Entertainment and published by Gathering of Developers in July 2001 for Microsoft Windows. Max Payne is a 2008 American noir action film based on the 2001 video game of the same name by Remedy Entertainment. The 2001 video game Max Payne was optioned by the production company Collision Entertainment to produce a live-action film adaptation. By April 2002, distributors Dimension Films and Abandon Entertainment were attached to the project. Shawn Ryan, the creator of the television series The Shield, was hired to write a script for the planned film.^[13] By June 2005, without production starting, Collision Entertainment had taken the project to 20th Century Fox.^[14] In November 2007, with a script written by Beau Thorne, Fox announced John Moore as the director and Mark Wahlberg as the title star

http://en.wikipedia.org/wiki/Max_Payne - Game image

 http://www.taylorherring.com/blog/index.php/2009/01/max-payne/ - Film image