Table of ContentsMarket SizesCost StructureMarket ShareIndustry TrendsMoving Online Increases ProfitabilityThe primary industry in which ATVI operates is the video game software industry. This section begins with a description of the volume and growth of the industry. Next, the cost structure is explored, followed by a summary of key players and trends in the industry. Say no to plagiarism. Get a Tailored Essay on “Why Violent Video Games Should Not Be Banned”?Get the original essayMarket SizeTaking advantage of technological developments and greater accessibility to the Internet and mobile devices, the gaming industry Video game software grew at an impressive 12% compound annual growth rate (CAGR) from 2010 to 2016 and a positive trend through 2021 is expected, reaching total sales of $135 billion worldwide. Additionally, based on the amount of revenue attributed to each platform, most of the growth in the United States is derived from mobile games (see Figure 3). Mobile game sales have seen dramatic growth over the past few years. Although the growth of mobile gaming will drive much of the new market space, continued growth in console game sales is expected due to the continued release of new consoles every six or seven years. Cost structureThis industry has a particular cost structure compared to that of the market. average costs of all industries. Figure 4 shows video game software industry costs (left) and average costs for all industries (right) as a percentage of revenue for 2016. As Figure 4 shows, 46% of costs are assigned to “Others”. This category includes product development and marketing expenses. In this industry, innovation and game development are crucial factors for growth. Another group that stands out is salaries, which represent 27.7% of income. This is because this industry is an intellectually intensive industry. The outcome of investments in product development strongly depends on the quality of employees. Therefore, companies offer better rewards to the best employees. Market Share The top five companies have a combined market share of 23% worldwide. Figure 5 shows the regional market share in 2016. ATVI holds the leading position in most regional markets. It ranks first in the world with a market share of 8%, followed by Electronic Arts with 7%. games. These games, often called "AAA" games, have high development and marketing budgets and are aimed at a wider audience. Most ATVI franchises are considered "AAA" games. Additionally, the concentration of revenue among key titles is evident. The top ten brands represent a combined market share of 17% worldwide. CoD, WoW and ATVI's Candy Crush Saga are among the top rankings in most regions in terms of market share. Since ATVI has significant experience producing successful video games, it benefits from a loyal customer base of hardcore gamers and a distinct value proposition that positions its products among the best. Keep in mind: this is just a sample. Get a custom paper now from our expert writers.Get a custom essayMoving online increases profitabilityAs mentioned earlier, the emergence of digital delivery channels will increase the profitability of businesses in this sector. Not only manufacturing and production costs.