Game theory in online game market Essay

In Chinese online halt market place, there are two normal price strategies, Charging and Free. The Charging means that the customers need to pay for the spirited. They need to secure the game client or pay for the fiting time (for shell RMB30 for 4000minits or RMB90 for 1month). The Free means that the customers can play the basic game for exonerate. And they can buy some items in the shop on the official website or directly in the game store.The two players I picked for this psychoanalysis are terra firma of Warcraft from skin rash merriment, Inc.and a new launched online game from capital of Red China complete universe Network Technology Co. , Ltd. Blizzard Entertainment is wizard of the best game producers all over the world. And the World of Warcraft is one of the tether c retire to famous game launched by Blizzard Entertainment. In come in of simultaneous online players of World of Warcraft reached its peak on 2009 at about 13million players.This fall decrease d to about 10million in 2012. And straight, based on the financial distinguish from Blizzard Entertainment, this number is about 8million. Perfect World is one of the most famous game producers in China.They launched more than 15 online games not simply in Chinese market, but also in oversea market such as Europe, North America, Russia and Australia. My topic is about that Perfect World wants to launch a new online game in Chinese market. And therefore Blizzard Entertainment allow decide the price dodging for World of Warcraft. Both the two company has two price strategies, Charging and Free. The World of Warcraft now using the Charging price strategy. Because that when Blizzard Entertainment launched World of Warcraft, it was the best online game in the online game market.Now some of their customers go to play free games. nevertheless the World of Warcraft still being seen as has higher character than any Made in China online games. Perfect World Blizzard EntertainmentPW Fr ee BE FreePW Charging BE Free PW Free BE ChargingPW Charging BE Charging In the left top block, two the two company exact Free. In this case, more customers will take on Blizzard Entertainments game. At the same price, they will naturally choose the better one. But the Blizzard Entertainments profits will decline as they translate from Charging to Free.In the left bottom block, Blizzard Entertainment retain Charging and Perfect World choose Free. This situation is what happened in recent years. slightly of their customers go to play free games. The Blizzard Entertainment will relapse their customers and profits. In the right top block, Blizzard Entertainment changes its price strategy to Free but Perfect World chooses Charging. In this case, most of customers will choose Blizzard Entertainments World of Warcraft. Because they can play higher quality game for free. In the right bottom block, both the two company choose Charging.In this situation, both of them will lose their pro fits. The customers will go to find other free games in the market. So l will evaluate the case as follow Perfect World Blizzard EntertainmentPW Free(4) BE Free(5)PW Charging(3) BE Free(10) PW Free(5) BE Charging(6)PW Charging(3) BE Charging(3) So we can see that no matter Blizzard Entertainment choose Charging or Free, Perfect World will choose Free to progress to more profits. That means, in this Sequential Game, Perfect World has its domain plectrum to choose Free. After Perfect World make its decision, Blizzard Entertainment will keep Charging to get more profits.