HA3 Task 1 Structure – The Value Chain

Developers
Make The Games
A video game developer is a developer that specializes into creating video games. A development team can range from one person who undertakes all the tasks to an enormous company which is made of a lot of people. There are 4 types of developers

First Party Developers
1st party developers which In the video game industry, a first-party developer is part of a company which manufactures a video game console and develops exclusively for it. First-party developers may use the name of the company itself (such as Nintendo), have a specific division name (such as Sony's Polyphony Digital) or have been an independent studio before being acquired by the console manufacturer (such as Rare or Naughty Dog).
http://en.wikipedia.org/wiki/Video_game_developer

Second Party Developers
Second-party developer is a colloquial term used by gaming enthusiasts and media often used to describe two different types of game development studios:

Independently owned studios who take development contracts from the platform holders and what they produce will usually be exclusive to that platform.
Studios who are partially or wholly owned by the platform holder (also known as a subsidiary) and what they produce will usually be exclusive to that platform.
In reality, the resulting game is first party (since it is funded by the platform holder who usually owns the resulting IP), but the term helps to distinguish independent studios from those directly owned by the platform holder. These studios may have exclusive publishing agreements (or other business relationships) with the platform holder, while maintaining independence. Examples are Insomniac Games (which previously developed games solely for Sony's PlayStation platforms as an independent studio) and Game Freak, (which primarily develops the Nintendo-exclusive Pokémon game series).
http://en.wikipedia.org/wiki/Video_game_developer

Third Party Developers
Third-party developers are usually called upon by a video game publisher to develop a title for one (or more) systems. Both publisher and developer have considerable input in the game's design and content. However, the publisher's wishes generally override those of the developer.

The business arrangement between the developer and publisher is governed by a contract, which specifies a list of milestones intended to be delivered over a period of time. By updating its milestones, the publisher verifies that work is progressing quickly enough to meet its deadline and can direct the developer if the game is not meeting expectations. When each milestone is completed (and accepted), the publisher pays the developer an advance on royalties. Successful developers may maintain several teams working on different games for different publishers. Generally, however, third-party developers tend to be small, close-knit team. Third-party game development is a volatile sector, since small developers may be dependent on income from a single publisher; one canceled game may be devastating to a small developer. Because of this, many small development companies are short-lived.

A common exit strategy for a successful video-game developer is to sell the company to a publisher, becoming an in-house developer. In-house development teams tend to have more freedom in the design and content of a game compared to third-party developers. One reason is that since the developers are employees of the publisher, their interests are aligned with those of the publisher; the publisher may spend less effort ensuring that the developer's decisions do not enrich the developer at the publisher's expense.

In recent years, larger publishers have acquired several third-party developers. While these development teams are now technically "in-house", they often continue to operate in an autonomous manner (with their own culture and work practices). For example, Activision acquired Raven (1997); Neversoft (1999); Z-Axis (2001); Treyarch (2001); Luxoflux (2002); Shaba (2002); Infinity Ward (2003) and Vicarious Visions (2005). All these developers continue operating much as they did before acquisition, the primary differences being exclusivity and financial details. Publishers tend to be more forgiving of their own development teams going over budget (or missing deadlines) than third-party developers.

A developer may not be the primary entity creating a piece of software, usually providing an external software tool which helps organize (or use) information for the primary software product. Such tools may be a database, Voice over IP, or add-in interface software; this is also known as middleware. A good example of this is Speedtree developed by Interactive Data Visualization Inc.

In addition, accessories like headsets may be known as third-party headsets; the company manufacturing the headset may be different from the console company. For example, Turtle Beach is a third-party headset manufacturer for the PlayStation 3 and Xbox 360.

http://en.wikipedia.org/wiki/Video_game_developer


Publishers
A video game publisher is a company that publishes video games that they have either developed internally or have had developed by a video game developer.
They often finance the development, sometimes by paying a video game developer (the publisher calls this external development) and sometimes by paying an internal staff of developers called a studio. The large video game publishers also distribute the games they publish, while some smaller publishers instead hire distribution companies (or larger video game publishers) to distribute the games they publish. Other functions usually performed by the publisher include deciding on and paying for any license that the game may utilize; paying for localization; layout, printing, and possibly the writing of the user manual; and the creation of graphic design elements such as the box design.

http://en.wikipedia.org/wiki/Video_game_publisher

Console Manufacturers/First Party Publishers

First party publishers are companies that make the hardware for example: Sony, Microsoft and Nintendo. These companies all make video game consoles but there are also mobile based publishers for example Nokia, Apple and Samsung.

These companies decide whether a game can get published on there consoles or not. They choose whether or not a game can be played on there console.

First party publishers provide help and support for publishers working on a particular platform.

Distribution and Retail
You can get distribution and retail in both physical and digital.
Physical: distributors sell to retails delivering the games to the retailer through disc form which the public purchase from the store. The retailer also has to allocate space for the title and has to organize sale promotions for the game.
digital: games are being sold electronically more often as via sites like steam and Xbox live marketplace. This is a lot cheaper as in cuts the cost of having to make the disc for the game and the packaging, warehousing, transport and retail space. Now that things such as mobiles and social networking have  games on the digital side is becoming more popular.


Outsourcing Companies
These provide different sources for developers and publishers. This includes everything you need to make a game for example art, animation, design etc.


Press and Media
This provides journalist output on reviews and analysis for the consumer. This includes magazines, websites and television, press and media can effect how well the game does.