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 systems makers Microsoft, Nintendo, and Sony, as well as peripheral providers such as Logitech and Mad Catz.

The US electronic toys and games manufacturing industry, part of the $2 billion toy manufacturing industry, is expected to enjoy high growth over the next two years. Key growth drivers are new products and the rising popularity of online gaming. Revenue from electronic toys and games manufacturing in the US represents only a portion of revenue recorded by US-based manufacturers, as almost all manufacturing of electronic toys and games takes place in other countries.

Entertainment and games software and manufacturing of personal computers (PCs) used for gaming are covered in separate industry profiles.

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 industry is highly concentrated: the top three companies dominate.

Electronic gaming products compete with PCs, TV, and other forms of electronic and non-electronic entertainment for consumer leisure time.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products are video game consoles, portable players, and peripheral hardware. Video game consoles are computers specially designed to deliver entertainment and game software, using a TV as a monitor. Video game console sales consist of three competing product lines: Sony's PlayStation, Microsoft's Xbox 360,...