Task 3

Task 3 Business Models Explain the three business models of: Arcade Box, Ship and Done Observe, Measure and Modify.

Business models

70s-80s Arcade

In this era, games consoles and arcade machines had just been invented. They were very simple but required a lot of work to make the games. The first arcade machine played Pong which was a giant success and many people still know of this game today. In order to function, these arcade machines needed coins which were collected in a bowl set inside the machine under the slot and it was very common to see crowds of people around these arcade machines. This happened quite a lot in Japan and there was even a coin shortage due to the fact so many people wanted to play these games. During the 1970s and 80s, many well-known and successful titles were released such as Space invaders and Pac man which caused a massive boom in the game industry. Many of these titles are still played today.

80s-00s Console

Games consoles were released here. The first was the Magnavox Odyssey. To distribute the games and consoles to the public, the companies would use ‘Box, ship and done’. This was where firstly the company would put the console in its own special box ready to be transported. The console would then be shipped from country A to country B. Shipping is a good method of transportation as it is extremely reliable and heavy loads can easily be transported in one run. Finally, when the product arrives to the store it was sent to, it would be stocked on shelves and everything would be done.

Digital distribution

In the future, there may not be any more physical goods for sale to gamers. This is because of digital distribution. This is where the game is downloaded to the console over the internet and is becoming increasingly popular due to the fact the buyer does not have to move from their house and the company does not have to pay any costs for transportation. All smartphones use digital distribution and this is because it is much easier for the buyer as the games are quick to download and the game will always be there on their phone, so they do not need to keep changing discs. Many phone games are free too. A large well known company that uses digital distribution is Steam. Steam is extremely popular with PC gamers as millions of people use it every day.

Online gaming such as games on websites are free for anyone to use and no download or disc is needed. The way these are funded are by the ads which usually can be seen around the website or the game you are playing and subscriptions are quite popular too for games like World of Warcraft. This is where the customer pays a monthly fee for example to play the game.

Websites such as Facebook are also contain applications and many games. Most of these are free to play, but earn money through ‘micro-transactions’. These are small, usually optional, fees that the gamer can pay to unlock things such as new levels in these games and are regularly updated to add more optional paid content.