sims market analysi
In 2002, Electronic Arts (EA) is preparing to launch one of the most highly anticipated gaming products in industry history: The Sims Online. The product's predecessor - The Sims - is the most successful PC game to-date, which has led to the lofty expectations for the new interactive product. Prior to release, however, EA faces some significant decisions regarding its marketing strategy, particularly with respect to segment targeting, pricing, and customer registration.In order to provide some perspective on these decisions, it is first necessary to analyze the situation faced by EA:Context: Overall, the PC/console gaming industry can be characterized as highly competitive, seasonal, and cyclical. Very few produc
Its ace PC product - The Sims - is the most successful PC game in industry history, selling over 16 million units worldwide. Sims customers also act as collaborators, creating "metagame" environments that include independent websites, additional creative content, and work-of-mouth advertisement. With respect to online games, subscription-based platforms have, thus far, proven disappointing: of the estimated 90 million online gamers, only about one million are willing to pay for the games. )Collaborators: EA's primary collaborators are its distributors, including Best Buy, WalMart and Toys R' Us. Finally, potential TSO collaborators include companies interested in promoting their products in the virtual TSO world (an option that has received positive response). ts reach break-even profitability, and, of those that do, the product life is short (six months). Company: In 2002, EA holds the largest market share in the world's PC and console gaming industry, boasting a top five market share position across all game platforms. Given the level of success achieved with The Sims, as well as the level of market anticipation, EA faces extreme pressures to deliver a hit sequel with TSO. Consumers: An estimated 60% of Americans play PC/console games, and the market appears to grow with each successive generation. A direct inventory link between EA and its sales channel members facilitates inventory management and sales incentives. Aside from providing quality content, EA also offers an extensive distribution system that allows the company to maintain a competitive advantage in a rapidly changing business environment. Potential TSO customers fall within one of four groups:* Game enthusiasts - least price-sensitive, primarily comprised of single males who spend between 20 - 40 hours per week playing PC games* Avid young fans - fastest growing segment, primarily comprised of teenage girls* Older Sims fans -includes married females over 25 and parents who play on occasion* Non-Sims fans - new customers who have not purchased the original Sims PC productsCompetitors: With respect to TSO, EA faces competition on several fronts:* Free online games* Existing Massively Multi-player Online Games (MMOGs) with loyal fan bases* Console and/or PC games that do not require monthly subscription fees* Other media entertainment (movies, videos, music, sporting events, etc.
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