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TRANSCRIPT
The Impacts of Broadband Network Entertainment on the Video Games
Industry and its Value Chain
OECD BROADBAND CONTENT PANELWorking Party of the Information Economy
3rd June 2004Murray Hume
Head of SCEE Network Gaming Service team
AGENDA
• Some assumptions about the future
• Some conclusions for the video games industry
• Structural Shifts in our Industry Value Chain
• Significance of Service Provision and Community to Content Owners
Assumption A
We are depending on competition to deliver exponential growth of broadband homes with
consoles
BB Households
= 20m (10%)PS2 Households
= 20m
2m PS2 Households
with Broadband
NOW
2004
BB Households
= 50m (25%)PS2 Households
= 40m +
~ 10m+ PS2 Households
with Broadband
BUT SOON
2006/7
Assumption B
Network Capabilities will become a normal part of the gaming experience for leading product
2.0M PS2’s ALREADY ONLINE
4 of 5 Xmas 03 TopPS2 Titles were
Networked
30+ PS2 NetworkTitles
+ 50 More This Year
Assumption C
Video Games Consoles are increasingly
‘Computer Entertainment Consoles' with many non
game product lines
Community + Service Provision
Public arena access to Broadband
Network Games and Features New Forms of
NetworkInteractiveContent +
Communication
?
Key Areas of Change for Network Computer Entertainment
To Fulfil Its True Potential The Console Network Universe Needs Competition in Services and
Broadband Supply:
First Conclusion
“Many Communities Must Co-Exist"
Second Conclusion
Network Entertainment Changes Our Industry Value Chain.
CURRENT VALUE CHAIN
Developer
Publisher
Distributo
r
Retail
Design Creative
& Technology
Product Management
Marketing
Funding
Pricing Policy
Timing
Inventory
CRM
Sales
Logistics
Terms
Pricing
Mark Downs
Priority
Presentation
€
Dev
elop
er
NEW WORLD ORDER PUBLISHING
Design,
Creative &
Technology
Disc Publishing
Network Publishing
Reta
il
Product
Management,
Funding, Sales
Logistics, POS,
Marketing, CRM
€Pricing Policy Sales Terms
Priority, Technology, Marketing, Funding,
Billing, CRM, Product Management
Dis
trib
Third Conclusion
As Network Services become part of our
products, capability in delivery of Network
Publishing Services will impact
the Disc Publishing process.
NETWORK QOS
GAME INTEGRATION
MARKETING + COMMUNICATION
BILLING & PAYMENT OPTIONS
EVENT MANAGEMENT
MODERATION STRATEGY
IDENTITY AND AUTHENTICATION
Key Ingredients of Network Service Delivery
CUSTOMER SERVICE
OurTraditional Function
OurNew Functions
We have over 70 broadband ISP partners
Final ConclusionVideo Game Publishers Need to Develop 3D
Business Model Thinking
SubsFees
EventFees
DiscSale
Changes in one offering will affect the others
Thank you
OECD BROADBAND CONTENT PANEL3rd June 2004