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An Unofficial
Marketing Research
on
Squaresoft, Inc.
(The Best Video Game Developer Ever!!!)
"Situation Analysis"
by Spirit Mouse
I. Global Macroenvironment
In 2001, over 225 million computer and video games were sold, grew
4.5% compare to 2000. In 2001, it generates $6.35 billion revenues, 7.9%
growth from 2000.
O Income and spending behavior
90% of all games are purchased by adults over the age of 18. The
nineteen of the top twenty best selling games in 2000 were read
"E" for everyone or "T" for teen. The majority of
players do so with friends and family. Almost 60% of frequent game
players play with friends and 33% play with siblings.
The average age of video games players is 28 years old. 43% of game
players are women. Americans, Japanese and western European are the
action group of the industry. Most of the loyal customers would be
teenage students with a few computer artists who are looking for the
best graphics. Their family income would usually be approximately
$22,000 or above.
The detailed study of U.S. Government census and other data shows
that sales in the game software industry in the year 2000 grew at a rate
of 14.9 % per year, more than double the rate of growth of the U.S.
economy as a whole and far outpacing sales growth in related industries.
- Legal / Regulatory Environment
Worldwide piracy is estimated to have cost the US entertainment
software industry over $3.0 billion in 2001, robbing game developers and
the game industry of revenue that could be used to underwrite the
creation and marketing of an even wider array of game titles.
And all games must be rated by the Entertainment Software Rating Board (ERSB)
before releasing into the market. Rating of Teen, must be purchased by
ages 13 or older, Mature must be for ages 17 or older, and Adults Only,
must not rent or sell to ages under 18.
Violations in video game are not totally restricted by the laws yet.
Violations in video game demonstrate a negative sample for teenagers and
could unconsciously influence their action and behavior. Many companies
included violations in their products in order to attract consumers who
would like excitements. It has been a heavy issue for most entertainment
media and software.
The Interactive Digital Software Association (IDSA) opposes efforts to
regulate the content of entertainment media in any form, including
proposals to criminalize the sale of certain video games to minors,
government-sanctioned entertainment rating systems.
II. Microenvironment
- Current Sales & Market Share
Squaresoft is the leading third party developer and publisher of
interactive entertainment software. It is one of the global leading-edge
marketers. In 2000, the ninth episode of their brand equity product
line, Final Fantasy, had over 1 million units on reserve in a
record-breaking 17 days in Japan, before the game was released in July
2000. Their entire Final Fantasy series, their recognition product line
has sold more than 30 million units worldwide to date. They became the
lion share of video role-playing games industry since this series is
released.
Unlike most video game developer, Square does not issue plenty of
games every season. Every year they invest all their resources on one
or not more than four projects. They concerned about quality much more
than quantity. Part of Square's marketing initiative is to attract
consumers with product differentiations. Though efficiency is an
important part in most business, it is not as valuable in Square.
Their initiative is not mass marketing, but differentiation.
Therefore, they would have all their best resources and technicians to
develop an amazing game with the best quality. Besides resources, the
policy of issuing fewer products each year, they have the advantage to
create better graphics and programs with more time allowance.
The price of Square's video games is usually in the standard range.
However, other than the video game itself, Square also sells a lot
ancillaries, such as posters, art books, models and others. Although
Square can only earn revenues from the game depend on the frequency,
Square gains much more from these ancillaries.
In the new millennium, people want better technologies. Online and
3-D animation is part of the high technology age. By promoting an
advertisement with highly rendered graphics, design and playing
online. Squaresoft's product positioning has been so successful and
its image is attracting new consumers too.
Their products are mainly sold in Japan, the U.S., and the western
part of Europe, where most of the people are wealthier and have more
spare money for entertainments. Also, people in these places tend to
demand higher technologies.
- Consumers (psychographics & demographic)
Their primary target audience is more mature teenagers who would
demand a game of better quality. They do not focus on either male or
female, but people who are more sensitive and imaginative. With the
more complex system and story, the players would have at least basic
to moderate experiences on video games. Since their games are usually
much longer than others are, the players must have of patience and
willing to commit to the game. Moreover, their customers are tended to
be hardcore loyal and be more patient and regardless of how long they
have to wait until the next game comes out.
Their newly developing secondary market is for the younger ages, from
6-12. Their target audiences are children who are looking for an
advanced challenge. The style of this segment group will mainly be
aggressive and cheerful. Since Squaresoft has not developed enough
products for this niche group to decide if they are going to be
hardcore loyal customer, they are still trying to force trial by
joining force with popular alliances. Although the market size is
still small, it is predicted to be growing fast in the next few years
by fulfilling customer expectations.
Square Co, Ltd is consisted of Square Soft Inc., Co., Square USA
Inc., Co. and Square EA Co., Ltd. They have 1,200 employees worldwide.
19% of the company belongs to Sony Inc.
- Capcom USA, INC. Capcom is also one of the leading
video game developers in the world. Their brand equities are Street
fighter, Resident Evil and Onimusha. They have the similar target
audience of Square's, but with minor differences of targeting
consumers that would not be so patience to wait for a year for a new
game. Their primary persuasive sub-segment are teenage males. As a
result, they produce many games every season and every year, and
produce more fighting or action game than Square.
- Koei Corp. Just like Square, Koei focus a lot on the
quality of their games. Like their recently released game, Dynasty
Warriors 3, they have incredible designed characters and simulation
environment. Unlike Square release one or two games a year or Capcom
producing so many games, Koei publish a few games every season.
Their target audiences are similar, however, their target market is
Mainland China. Therefore, their product line focuses more about
Chinese History.
- Electronic Arts. Electronic Arts (EA) is the world's leading
independent developer and publisher of interactive entertainment
software based in the U.S. Since its inception, EA has garnered more
than 700 awards for outstanding software in the U.S. and Europe.
Their product line in the industry of video games on Playstation are
varies, but they focus mainly on sports as most American focus on.
Their products have always been in the top 10 because they have more
resources to develop better graphics and game environment.
Moreover, other than developing their own game, they also cooperate
with many other developers and publish their products. Squaresoft is
one of them. They joint force to establish two joint venture
companies, Square Electronic Arts L.L.C. in Japan and in North
America. Square Electronic Arts has the exclusive publishing rights
in North America for all interactive entertainment titles developed
by Square.
¡@
The two axis on this map are Ratings and Age, to determine which
company tends to target which age group and which type of video games.
There is a cluster between the young age of 6-12 and between Early
Childhood and Kids to Adults game. Another cluster is around the
Everyone and Teen games for ages around 15-20.
These two groups are the most demanding market of video games,
especially the youth empire. Generally speaking, they have the most
spare time for entertainments. Most product line of these companies
target the fantasies and imaginations the teenagers are looking for.
Written on: Nov. 04, 2002
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