Horizontal and vertical integration
Transcript of Horizontal and vertical integration
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OWNERSHIP
Vertical Integration
This is where a company owns each part of the production and distribution process. For example: Nintendo is probably the most vertically integrated video games producer. Sometimes a company will become vertically integrated by buying up a rival or merging; Activision Blizzard for example.
Horizontal IntegrationHorizontal Integration
Horizontal Integration is where a company expands by buying up competitors or owners of intellectual property. When there’s a need it’s bought in. For example when Sony needed to develop their streaming distribution system Playstation Now they bought Gaikai for the intellectual property.
Sometimes horizontal integration can be a synergetic Sometimes horizontal integration can be a synergetic agreement. For example Bungie has a ten year contract with Activision to produce Destiny while Activision publish and distribute it.