Electronic Toys & Games Manufacturing

Electronic Toys & Games Manufacturing

Brief Excerpt from Industry Overview Chapter:

Companies in this industry manufacture electronic toys and games, including video game consoles. Major companies include console makers Microsoft (based in the US), Nintendo (Japan), and Sony (Japan), as well as peripheral providers such as Bigben (France), Nyko (US), and Logitech (Switzerland).

COMPETITIVE LANDSCAPE

Demand is driven by personal income and product innovation. The profitability of individual companies depends on effective marketing, competitive product design, and manufacturing efficiency. Market success drives additional revenue via royalties paid by third-party game developers. The US video game console industry is highly concentrated: the top 50 companies account for more than 80% of the industry's revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products in the industry includes nonelectronic games and puzzles, which account for about 20% of the industry's revenues. This is followed by toys, games and hobbies (about 15%) and dolls, action figures, and toy animals (about 10%). Other products and services include baby carriages and contract manufacturing services. The home video game console market is dominated by three product lines: Sony's PlayStation, Microsoft's Xbox, and Nintendo's Wii. Similarly, handheld products made by Nintendo (DS, Switch) account for most of the portable gaming console market. Nintendo also offers a hybrid console called Switch that has both home console and mobile gaming capabilities. Peripheral hardware includes devices that elevate the human-machine interaction (HMI) such as controllers, joysticks, and driving wheels. Peripherals also include upgrades to core products, such as larger hard drives, additional memory,...