107225 - BUSINESS MODELS

Subject type: Basic

Coordinator: Adso Fernández Baena

Trimester: Second term

Credits: 6

Materials (articles, videos, guides, etc.) in English and Spanish are used during the course. 

The subject of "Business Models" starts from the conceptual exploration of what a business model is per se and its applicability to the video game industry. The course covers a wide range of ways to monetize the different economic activities currently existing in the industry, video game monetization models, product strategies and possible contingencies arising from understanding the game as a product or service. 

The knowledge and skills covered by the subject are acquired from the different sessions of theory, teamwork, group discussions, research, etc. It is for this reason that the evaluation system rewards constant teamwork and the acquisition of theoretical knowledge on an individual basis.

This subject has methodological and digital resources to make possible its continuity in non-contact mode in the case of being necessary for reasons related to the Covid-19. In this way, the achievement of the same knowledge and skills that are specified in this teaching plan will be ensured. 

The Tecnocampus will make available to teachers and students the digital tools needed to carry out the course, as well as guides and recommendations that facilitate adaptation to the non-contact mode.

At the end of the course the student must be able to:

• E12.1. Generate innovative ideas for video game products and analyze them as a business opportunity.
• E12.2. Demonstrate knowledge about the creation and start-up of new businesses or start-ups.
• E12.3. Describe benchmarks of independent video game studies.
• E12.4. Test start-up prototypes and analyze user feedback.
• E12.5. Develop entrepreneurial projects, taking into account the business model, its viability, the marketing and sales plan and the customer.
• E13.1. Demonstrate knowledge about the structure and organization of a company.
• E13.2. Use forecasting and business planning tools.
• E13.3. Describe the basics of marketing and market research.
• E13.4. Design a marketing strategy for a video game.
• E13.5. Describe business models related to the video game industry.
• E13.6. Design a business model and monetize a video game.
• E13.7. Analyze the economic viability of a business or line of business.

The subject uses the following work methodologies:

Master Class, Lectures, Presentations, Video Capsules, Debates and Forums, Case Studies, Role Playing, Collaborative Learning, Problem Solving, Critical Article Search and Reading, and Question-Based Learning.

1. CONCEPTUALIZATION: BUSINESS MODELS
1.1 What is a Business Model? 
1.1.1 Economic Activity of the Company.
1.1.2 Strategic Business Units vs. Divisions.
1.1.3 Business Models vs. Income Models.
1.1.4 The CANVAS Business Model.
1.2 Economic Activities and Business Models in the Video Game Industry.
1.2.1 Development: amateur, indie and third party development (serious games, gamification, development service)
1.2.2 Publishing: platforms, publishing, distribution, marketing and PR, consulting, financing, etc.
1.2.3 Services: incubation, acceleration, coworking, porting, translation and localization, sound, music, voiceover, QA, UX, media agencies, advertising agencies, legal, engines, version control systems, software development (Hack 'n'Plan, Jira, Trello), etc.
1.2.4 Other agents: press, training, data management, associations, streamers and influencers, etc.
1.2.5 Possible combinations to ensure the survival of the small development study.
1.3 Possible changes in economic activities or UENs and important decisions that change the business.
1.3.1 Intrinsic Changes
1.3.2 Extrinsic Changes
1.4 Protection of own developments against possible changes.
1.4.1 Types of IPs and how to protect them.
1.4.2 Advantages and disadvantages of doing business with original IPs.
1.4.3 How to develop your own or third-party licenses.

2. CONCEPTUALIZATION: INCOME MODELS
2.1 Income Models vs. Income Sources
2.2 B2B vs B2C
2.3 Sources of Income vs. Monetization Systems.
2.4 Monetization Systems
2.4.1 Pay to Play vs Free to Play + Hybrid Monetization Systems.
2.4.1.1 P2P: Pay per Play, Pay per Copy, Pay Per Download, Episodic Sales, Subscription.
2.4.1.2 F2P: In-game purchases, Advertising, Auciton and Player Trades, Expansions, Donations
2.4.1.3 Hybrids: Freemium vs Paymium
2.5 Principles of economic design
2.5.1 Own developments: what to monetize, to whom, how and analysis of KPIs
2.5.2 Economic systems of cross-fertilization between UENs 

3. PRODUCT STRATEGIES
3.1 Competitive strategies
3.1.1 Markets vs Products. Ansoff matrix.
3.1.2 Generic Porter Strategies
3.1.3 Diversification vs. Concentration.
3.2 Corporate strategies:
3.2.1 Portfolio Analysis. BCG matrix.
3.2.2 Phases of the game life cycle in a market
3.2.3 Scope: Geographical coverage.
3.2.4 Decisions on the Business Development Method.
3.3 Operational strategies:
3.3.1 Global competitive advantage
3.3.1.1 Value Activities Configuration
3.3.1.2 Coordination of Value Activities
3.4 Landing: Dominant Strategies in the Video Game Industry
3.4.1 Organizational: Outsourcing
3.4.2 Corporate: Partnership
3.4.3 Competitive: Diversification

4. GAMES AS PRODUCTS VS GAMES AS SERVICES
4.1 Product Logic vs. Service Logic
4.2 Contextualization: the game before and now
4.3 The game as a product and the game as a service (Game as a Service or GaaS)
4.4 GaaS: problems and business requirements
4.5 Previous decisions: creativity and value proposition
4.6 Associated income models
4.7 Co-creation and the relationship with the user
4.7.1 Negotiation and turning points
4.7.1.1 Feedback and power symmetry
4.7.1.2 Change of hands
4.7.1.3 The end of the game life cycle

With the aim of collecting evidence of the achievement of the expected learning outcomes, the following activities of an evaluative nature will be carried out (related to all the common competences):

A1. Exercises in class or at home: Exercises (Evidence of learning outcomes E12.2, E12.3, E12.4, E13.1, E13.2, E13.5 and E13.6)
Practical analysis exercises, some of them based on real cases, starring video game companies nationally and internationally, and dealing with strategic decisions or real companies that end in success or failure. Usually supported by texts and viewed in class: videos or PWP presentations. The directed activities serve to evaluate the attitude towards learning. At the end of the activities the student must have a speech to comment on decisions about product creation and design and business ideas. However, the student should be able to analyze new cases independently with a more technical and scientific view.

A2. Group work: Analysis of a Business Model (Evidence of learning outcomes E12.1, E12.3, E12.5, E13.2, E13.5, E13.6 and E13.7)
This work consists of the analysis and documentation of a business model of the video game industry. The exercise aims to promote the reflection, analysis and documentation by students of the basics of a business model of a well-known company in the video game industry. These basic aspects correspond to the theoretical contents of the subject and, therefore, it is a question of the students selecting and analyzing these contents, applying them to a case of real life.

A3. Work in group: Design of a Business Model  (Evidence of learning outcomes E12.1, E12.3, E12.5, E13.2, E13.5, E13.6 and E13.7)
The purpose of this work will be to design and orally defend a business model of the video game industry. The exercise aims to promote the reflection, design, application, and documentation by students, of the basic aspects that correspond to the theoretical contents of the subject and, therefore, it is that students select and apply these contents to the activity. The format of the presentation will be conveniently detailed during the first session of the course.

A4. Partial exam: Exam (Evidence of learning outcomes E12.2, E13.1, E13.2, E13.5 and E13.7)
Individual partial examination of part of the syllabus. The statement of the test consists of three parts: a first part with test-type questions, a second part with practical exercises and a third part, reasoning questions.

A4. Final exam: Exam (Evidence of learning outcomes E12.2, E13.1, E13.2, E13.5 and E13.7)
Individual final exam of part of the syllabus. The statement of the test consists of three parts: a first part with test-type questions, a second part with practical exercises and a third part, reasoning questions.

General criteria of the activities:

• Teachers will present a statement for each activity and the evaluation and / or rubric criteria, in class and through the virtual campus.
• The teacher will inform of the dates and specifications of delivery of the activities, although it is the responsibility of the students to attend to any modification of dates or formats of delivery.
• Class and homework exercises will be done in teams of 4 people. The variation of the number of components to a number of students different from the specified one will be at the discretion of the teaching staff, according to the needs of the subject / groups. The groups will be created at the discretion of the students.
• Class exercises and assignments will be delivered in digital format via the eCampus, with one week for delivery in the case of class exercises.
• The exercises and works will be solved together in the classroom and will serve to comment, analyze and generate debates in class around the contents of the subject. Thus, the development of the works contemplates tutorials during the classes where the students can ask doubts. The class will detail the frequency and its operation. Attendance at these sessions will be important in the evaluation process, in accordance with the general competencies of the subject related to organizational work, self-learning, teamwork and the ability to apply content and generate ideas.

The grade of each student will be calculated following the following percentages:

• A1. Exercises to do in class or at home: Exercises 10%
• A2. Group work: Analysis of a Business Model 15%
• A3. Group work: Design of a Business Model 25%
• A4. Partial exam: Partial exam 20% 
• A5. Final exam 30%

Final grade = A1 x 0,1 + A2 x 0,15 + A3 x 0,25 + A4 x 0,2 + A5 x 0,3

Considerations:

• The exams (partial and final) must be passed with a minimum grade of five (5) to pass the continuous assessment.
• An activity not delivered or delivered late and without justification (court summons or medical matter) counts as a zero (0).
• It is the responsibility of the student to prevent plagiarism in all its forms. In the case of detecting plagiarism in any activity, regardless of its scope, it will correspond to having a grade of zero (0). In addition, the teacher will inform the Head of Studies of the situation so that applicable measures can be taken in matters of the sanctioning regime.

Recovery:

• Students with a grade of less than five (5) in the grade of any of the exams (partial or final), may retake the subject by taking a single exam that will collect all the contents of it. The mark of the resit exam will be the final mark of the subject.
• Students with a grade of less than five (5) in the weighted mark of the evaluation activities of the first call, will be able to recover the subject by carrying out a single exam that will collect all the content of the same. The mark of the resit exam will be the final mark of the subject.
• The maximum grade that can be achieved in an extraordinary call or second call is a five (5).

Laramee, FD (2005). Secrets Of The Game Business. Charles River Media, Inc.

Nichols, R. (2014) The Video Game Business (International Screen Industries). British Film Institute

Prahalad, CK, & Ramaswamy, V. (2013). The future of competition: Co-creating unique value with customers. Harvard Business Press.

Dillon, R., & Cohen, O. (2013). The evolution of business models in the video game industry. In Proceedings of the International Conference on Managing the Asian Century (pp. 101-108). Springer, Singapore.

Lehdonvirta, V. and Castronova, E. (2014) Virtual Economies: Design and Analysis. MIT Press.

Davidovici-Nora, M. (2014). Paid and free digital business models innovations in the video game industry. Digiworld Economic Journal, (94), 83.

Ritzer, G., & Jurgenson, N. (2010). Production, Consumption, Prosumption The nature of capitalism in the age of the digital 'prosumer'. Journal of consumer culture, 10 (1), 13-36.

Samper-Martinez, A., Gerling, K., García-Álvarez, E., Kirman, B., & Lawson, S. (2015, October). After All the Time I Put Into This: Co-Creation and the End-of-life of Social Network Games. In Proceedings of the 2015 Annual Symposium on Computer-Human Interaction in Play (pp. 135-140). ACM.

Banks, J. (2013). Co-creating videogames. Bloomsbury Publishing.

Osterwalder, A., Pigneur, Y., Bernarda, G., Smith, A., & Papadakos, T. (2015). Designing the value proposition. Deusto Ediciones.

Lovell, SNC (2017). The Pyramid of Game Design. CRC Press: Taylor & Francis Group.