Bellerbys Economics - Mr Stephenson

Thursday, May 11, 2006

Games War

Nintendo will launch their new Wii games machine next week at the annual E3 exhibition in the US. The XBox 360 came out last year and the Playstation 3 will be available in November.

The games market is a monopoly-power oligopoly. Sony currently have 70% of the market with the other two on 15% - but Sony have been badly hit by the late delivery of the Playstation 3 - and analysts predict the market could flip dramatically in favour of Nintendo over the next twelve months.

There are huge barriers to entry to this market - particularly in development costs. But of course, the products sell cheaply because of bundling through derived demand. If you buy a Nintendo then you must buy Nintendo games - and these are very expensive.

The next generation of games machines will include full-motion sensors - thin gloves and spectacles containing mini-plasma screens providing a 3-d sensurround effect - you won't just see the games, you will be inside the game.

I don't like computer games because of the enormous time they take to play. The opportunity cost of playing games is life itself - but my son argues that the opportunity cost of all the time we make him spend on real life is less time spent with Lara Croft.

By the way, you might like to know that I was the teacher for the model who was the very first Lara Croft - Rhona Mitra. She has also starred in films like 'Spartacus' and 'Beowulf'. Here's her website: (terrible name for a website!)

She was a nice girl - but strangely not very good at Computing...

Don't forget, next Wednesday (May 17th), my six-term groups will be visiting the Bank of England, leaving at 11.15am from outside House 46. Here's the BofE website:


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