STEEP-analysisThe puzzle of the macro environmentGroup 6A

Media Management 2304

Finding opportunities and threats in a new environment

Steep-analysis

SocialTechnologicalEconomicEnvironmentalPolitical

GDP-growth rate Inflation Interest rate Unemployment Purchasing power Labor cost Currency exchange ratewww.netmba.com/strategy/past

Main economic factors

“Casual games are video games developed for the mass consumer, even those who would not normally regard themselves as a ‘gamer.’”

http://archives.igda.org/casual/IGDA_Casual_Games_White_Paper_2008.pdf

Casual Gaming Industry

Fundamental indicator reveling the tendency of the economic development

Defines the attractiveness of the economy GDP-growth rate describes the business cycle

stage Indirect effects on casual gaming industryMost casual games are “free” and hence GDP

is not directly related to casual gaming industry. However, a too low GDP indicates that people can’t purchase the casual game equipment

GDP-Growth Rate

Casual gaming industry = low-involvement purchase (high involvement product)

No big investments for developing the casual games inflation/interest rate not influencial

“Price wars: the price for downloadable PC games decreases, with $6.99 becoming the new industry standard”

http://www.slideshare.net/alawar/the-state-of-the-casual-games-industry-in-2009-market-trends-and-opportunities

Inflation/Interest Rate

With unemployments people play morehttp://stuffunemployedpeoplelike.com/2009/06/02/92-

playing-casual-games-until-their-hands-cramp/

Due to unemployment, people have more time to play, hence the demand should increase. However, the demand for casual game equipment should decrease.

Unemployment

Unemployment effects the purchasing power Several casual games are for free demand

of basic games should not be effected due to lack of income

Purchasing of extras should decrease effecting the industry

With higher purchasing power,people can spend more money

on casual game equipment

Purchasing Power

Labor cost stands for a majority of total cost in casual gaming industry

Industry demands knowledgable, specialist people

Shortage of people available to work in the industry

http://www.sudesca.org/green-economics/the-games-industry-casual-and-serious-reasons-for-continued-growth/

Since the casual gaming industry is labor intensive and it requires specific knowledge, the industry should be highly effected by the labor cost.

Labor Cost

International market Products of export Extras and equipment is payed with local

currency and bought on local markets Currency exchange rate effects the industry

– revenues, profitability and attractiveness in general

Currency exchange rate

”Seeing that most causal games are free or inexpensive for customers to use, the economic factors such as GDP and interest rates, should not have as much impact as in most other industries. However, factors such as unemployment rate and labor cost are important economic factors in the casual gaming industry”

Conclusion

www.netmba.com/strategy/past http://archives.igda.org/casual/

IGDA_Casual_Games_White_Paper_2008.pdf http://www.slideshare.net/alawar/the-state-of-the-

casual-games-industry-in-2009-market-trends-and-opportunities

http://stuffunemployedpeoplelike.com/2009/06/02/92-playing-casual-games-until-their-hands-cramp/

http://www.sudesca.org/green-economics/the-games-industry-casual-and-serious-reasons-for-continued-growth/

Reference

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