This research project was defined in 2017 and aimed at examining the dynamics of the video game industry development in Iran to propose solutions for enhancing its development. In this research project, a system dynamics modelling approach was employed to create qualitative models (including Subsystems Diagram and Causal Loops Diagram) and mathematical simulation models (in the form of a Stock-Flow Diagram). The model was run under different scenarios and policies, and the simulation results were discussed.
The Importance of Entertainment Industries
Entertainment industries, including the video game industry, are considered among the most productive sectors worldwide, with continuous growth in profitability and revenue. The video game industry is confidently one of the most profitable segments within the entertainment sector. Nowadays, major gaming companies have achieved substantial revenues, and intense competition persists in the market for market share acquisition.
In this regard, the following figure shows the global games market per region and segement published byNEWZOO.
In addition to its economic aspect, the cultural impact of the video game industry has led to a competitive advantage for countries with superior game development capabilities, as the primary audience for video games consists of children, teenagers, and young adults. The following figure shows the global games players per region published byNEWZOO.
The System Dynamics Model of Video Game Industry Development
Given that the video game industry environment encompasses numerous and diverse economic, social, cultural, and technical factors, it is crucial to investigate the influential variables and their interactions with a systems approach. This research investigates the factors affecting the development of the gaming industry in Iran using a system dynamics approach based on the Bass diffusion model and the technology competition model (Poliya).
The system dynamics approach provides a toolbox to identify the main subsystems, influential variables, and dynamics impacting the industry’s development. A mathematical simulation model was developed based on the dynamics that create the identified reference behaviours. This enabled the examination and evaluation of various scenarios and policies. Article Sponsored Find something for everyone in our collection of colourful, bright and stylish socks. Buy individually or in bundles to add color to your drawer!
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Accordingly, the research was conducted in five steps as follows:
- Examining the current state of the video game industry through expert interviews and literature review
- Drawing the subsystems and causal loops diagrams
- Creating stock-flow diagram and formulating mathematical equations.
- Formulating scenarios and policies.
- Simulation results analysis to comprehend improvement strategies for the industry.
Simulation Results
According to the simulation results under different scenarios and policies, six key factors leading to industry development were identified. First, increasing the share of exports significantly influences key variables such as accumulated profits, the number of games, human resources, and the audience of domestic games.
Enhancing human resource productivity is the second influential factor. Unlike certain industries dependent on hardware, the video game industry relies heavily on human resources, playing a primary and critical role.
Third, copyright breach has a crucial impact. Fourth, reducing taxes on gaming companies’ income is absolutely influential. Fifth, increasing the share of research and development in game development projects is essential.
Lastly, avoiding unilateral increases in official advertisements for local video games is crucial. Focusing solely on official advertisements without considering the development of educational infrastructure, research and development, and production will not yield positive results. It may lead to lower audience attraction and a considerable decline in profitability due to the lack of competitiveness and low relative attractiveness of domestic games. Therefore, it is recommended to emphasize both official advertisements and simultaneous attention to research, development, and infrastructure development.
My role in this project:
I acted as the project manager for this project, playing a pivotal role in a wide range of essential activities. From crafting the project proposal to negotiating and defining the project scope and contract, I took charge of planning the project meticulously. Building and coordinating the project team was another crucial aspect where I ensured a cohesive and efficient collaboration among team members. Throughout the project’s execution, I diligently oversaw each step, ensuring progress and successful outcomes.
In addition to my managerial responsibilities, I presented the team’s outputs and engaged in conducting semi-structured interviews with experts. Active involvement of stakeholders was a priority for me, as it facilitated a comprehensive understanding of their needs and perspectives. Moreover, I took the responsibility of supervising the quality of models, reports, and published papers, guaranteeing the delivery of high-quality and accurate results.
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