The Long Tail TheoryChris Anderson (2006)

VIDEOGAMESLauren, Martin and Shannon

What Is The Long Tail Theory

• The long tail theory (Anderson, 2006) describes how the introduction of the internet has affected and transformed economics, commerce and consumption within all of the types of media platforms.

• It focuses on how online shops (such as Amazon) supply products to niche markets, as the ‘shelf life’ of these products is unlimited, whereas high-street shops tend to sell the more in-demand products, and soon replace products that were once in high demand with newer products.

• Businesses usually choose the Internet as a way of displaying their products, as they can show a vast amount of products on their websites, where customers can narrow down their choices, which you are unable to do in high street shops.

• Due to the online age people are turning to shopping via the web due to the range of products the shops on the web provide.

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Video games and the long tail theory

• With the online age and the introduction of technology video games are becoming more and more popular as there are many devices you are able to download and play video games on such as smartphones, next generation consoles and handheld consoles.

• Not only can you buy video game in shops but with the introduction of online distribution services you are able to download games straight to your device, for example Xbox Live offers a wide range of video games available as a digital copy where a hard copy is not available.

• As digital downloads is now common within video games it’s now a lot easier and cheaper to distribute a wider range of video game titles, therefore targeting niches in the market.

Example• One of the biggest online retailers of video games is a service

named Steam owned by a video game developer company Valve.

• Steam offers over 1600 titles for sale all of which can be bought through the use of the Internet.

• This service is very popular as there are not post and packaging fees and unlike all high-street retailers it has no limits in terms of shelf space.

• This online store also offers a selection of ‘Indie Games’ which are not developed by mainstream video game companies, this helps the company gain reputation as it’s targeting niches within the market where high-street shops such as Game cannot reach.

Android markets vs. physical sales

Angry Birds Star Wars£1.9910,000,000+ downloadsFruit Ninja£0.761,000,000-5,000,000 downloads

• Although online retailers offering games to niches in the market and becoming more and more popular, physical copies are still the form of choice for most gamers.

• Mr Griffith quoted US market statistics which showed that between 2003 and 2007 sales of movie tickets fell by 6%; the number of hours of TV watched dropped by 6%, sales of recorded music slumped 12% and purchases of DVDs remained flat. “Over the same four-year period, the video game industry grew by 40%.Video games are poised to eclipse all other forms of entertainment in the decade ahead" he said.

• More can be read at: http://news.bbc.co.uk/1/hi/technology/7821612.stm

Growth of video game industry