Media Ownership in the Video Game Industry
Media ownership in the video game industry refers to the control and influence companies have over the production, distribution, and consumption of video games, as well as the surrounding media landscape. Companies that dominate both the hardware and software markets can shape the direction of the industry by exerting control over multiple stages of game development, marketing, and post-release engagement. This type of ownership also involves companies expanding their reach beyond games into related media, such as film, television, and digital platforms. Here, we’ll explore various facets of media ownership in the video game industry, with references to Animal Crossing: New Horizons (ACNH) when relevant.
1. Vertical Integration
Definition: Vertical integration occurs when a company controls multiple stages of production, distribution, and consumption in the value chain, from game development to hardware manufacturing and distribution.
Examples:
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Sony: Sony has a strong vertical integration strategy, as it owns multiple game development studios (e.g., Naughty Dog and Insomniac), manufactures its PlayStation consoles, and distributes games through the PlayStation Store. This allows Sony to control a large portion of the gaming experience, from the development of first-party titles like The Last of Us to its distribution on PlayStation platforms.
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Nintendo: Animal Crossing: New Horizons is a clear example of vertical integration. Nintendo not only developed the game but also created the Nintendo Switch hardware it is played on. Furthermore, the game is exclusively distributed through the Nintendo eShop or physical copies, ensuring that Nintendo controls the entire ecosystem surrounding the game. This gives Nintendo a significant advantage by controlling both the production and delivery of the gaming experience.
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Comparison: While ACNH benefits from Nintendo’s vertical integration, it does not involve third-party developers or external platforms. This stands in contrast to companies like Sony, which have larger third-party gaming ecosystems due to acquisitions and partnerships with other game developers.
2. Horizontal Integration
Definition: Horizontal integration occurs when a company acquires or merges with other companies at the same level of the value chain, often to expand market share or reduce competition.
Examples:
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Microsoft: Microsoft’s acquisition of companies like ZeniMax Media (Bethesda) and Activision Blizzard represents significant horizontal integration. These acquisitions allow Microsoft to expand its library of exclusive games and strengthen its position in the gaming market. Franchises like The Elder Scrolls, Fallout, and Call of Duty bolster Xbox's offerings and contribute to the success of Xbox Game Pass, which is part of Microsoft’s broader gaming ecosystem.
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Nintendo: While Nintendo is a dominant player in the gaming world, it has not aggressively pursued horizontal integration. Most of its acquisitions are relatively small compared to companies like Microsoft or Sony. For instance, Nintendo acquired Next Level Games, the studio behind Luigi's Mansion 3, but it hasn't made the large-scale acquisitions seen from its competitors. As a result, while Nintendo owns and manages its core franchises, it remains more focused on in-house development rather than acquiring other large companies or studios.
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Animal Crossing: New Horizons: There are no significant horizontal integration examples tied directly to ACNH. However, Nintendo has partnered with companies like Sanrio for special crossover items, showing a more limited form of horizontal integration. These partnerships allow for the inclusion of branded items and events within the game, but they don’t go as far as the massive acquisitions seen with other companies.
3. Media Diversification and Cross-Media Ownership
Definition: Companies expanding their reach into various media formats, such as television, film, and online content, to increase their influence and market presence.
Examples:
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Sony: Sony’s success in vertical integration allows it to dominate both gaming and film, owning the PlayStation brand and a multitude of movie and TV production assets. Franchises like Uncharted have crossed over into film, enhancing both the gaming and cinematic experiences.
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Nintendo: Nintendo's media diversification strategy is more selective. Animal Crossing: New Horizons has not expanded into film or television yet, though the Animal Crossing franchise has seen adaptations, such as Animal Crossing (the anime series), and the Animal Crossing movie released in Japan in 2006. However, the New Horizons installment remains primarily a gaming experience without substantial media extensions beyond the game itself.
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Comparison: While ACNH hasn't yet diversified into film or television as some other games have, its influence is evident in various forms of cross-media content, such as in-game events or collaborations with brands like Sanrio. These collaborations tie the game to broader pop culture but stop short of a full-fledged media expansion. It’s possible that future installments or updates could further explore this direction.
4. Brand Ownership and Licensing
Definition: Brand ownership and licensing involve the use of established game franchises or characters across multiple media formats for cross-promotion and revenue generation.
Examples:
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Nintendo: Nintendo’s approach to brand ownership is centered on its flagship characters like Mario, Link, and Donkey Kong, which are licensed for use in various formats beyond games, including merchandise, theme park attractions, and even mobile apps (e.g., Super Mario Run). While Animal Crossing: New Horizons has not been as heavily utilized outside of the gaming space, the franchise is still a significant part of the Nintendo brand, contributing to themed products and collaborations, such as the limited-edition ACNH-themed Nintendo Switch console.
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Animal Crossing: New Horizons: The Animal Crossing franchise is a huge part of the Nintendo brand, even though it doesn’t yet have a major licensing deal beyond games. Limited-edition merchandise, such as plush toys or themed accessories, can be found, and the collaboration with Sanrio for in-game items exemplifies how ACNH can use its brand for cross-promotion.
5. Platform Exclusivity
Definition: Platform exclusivity refers to the practice of restricting certain content to specific gaming consoles or platforms, which helps companies control distribution and force players to buy specific hardware.
Examples:
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Sony: Titles like The Last of Us or Spider-Man are exclusive to PlayStation platforms, encouraging players to purchase PlayStation consoles if they want to access these games. This exclusivity strategy strengthens the brand loyalty of PlayStation users.
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Nintendo: Animal Crossing: New Horizons is exclusively available on the Nintendo Switch, ensuring that the game cannot be played on other consoles or platforms. This exclusivity gives Nintendo full control over the game’s distribution, making it a key seller for the Nintendo Switch and reinforcing the console's success.
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Comparison: ACNH is an excellent example of platform exclusivity, with the game being available only on the Nintendo Switch. While this exclusivity has contributed to the Switch’s success, it also limits the game’s reach compared to multiplatform titles.
Conclusion
Media ownership in the video game industry allows companies to shape the direction of gaming by controlling multiple aspects of production, distribution, and post-release engagement. In the case of Animal Crossing: New Horizons, Nintendo’s approach to vertical integration and platform exclusivity has allowed them to exert significant control over the game’s ecosystem. While the game doesn’t engage in horizontal integration or cross-media ownership as extensively as other major franchises, its strategic brand ownership and platform exclusivity remain key elements in its success. As the industry continues to evolve, it will be interesting to see how Nintendo may further expand its media ownership and whether ACNH will be incorporated into a broader media strategy.
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