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Midway Games

Midway Games Inc.

Case Analysis

Strategic Management
William McKeown
December 6, 2007



Strategic Purpose and Case Analysis Purpose
Midway Games "develop(s) and publish(es) interactive entertainment software for the global game market."4 The company began in 1988 focusing on the coin operated game sector, and the development of home console and handheld versions that proved to be successful in the coin operated market. In 2001, the management team at Midway Games made the decision to exit the coin-operated segment of their business and "focus exclusively on the rapidly growing home console and handheld video game software market." 4 Over the past several years, Midway Games has suffered significant financial losses. Because of these losses, Midway Games must identify a new strategic purpose: double market capitalization within four years.
Situation Analysis/Market Study
General Environmental Analysis
By 1983, so many bad games had hit the market that consumers began to turn away from video games for entertainment. The market had become hyper-competitive and consumers were less willing to spend their money on video games that they thought were boring or not challenging. Midway Games entered the video game industry in 1988; five years after the market suffered its crash. From its start, Midway Games focused on coin-operated games and developed home console or handheld games only if it was proven successful in the coin-operated market.
Demographic
• 60 percent of gamers are 18 or older (25 percent of these are 35 years old or older).2
• Average age of consumer is 33 years old and has been playing for 12 years. In 2007 24% of gamers were over 50 years old.2
• "69 percent of American heads of households play computer and video games." 2
• Adult gamers have been playing for an average of 12 years. 53 percent expect to be...