Market Dynamics
Rising research and development (R&D) expenses in the gaming console industry have led to increased consolidation, as smaller companies struggle to compete with the large console manufacturers. In 2023, the top three console manufacturers accounted for over 90% of the global market share. As a result, smaller console makers may need to pursue licensing agreements or partnerships to keep up.
Financial Implications
The extended patent life for gaming consoles has allowed major game manufacturers to maintain exclusive rights to their platforms and technologies. This can limit innovation in the industry, as smaller upstarts face more barriers to entry. Additionally, it can lead to higher prices for consumers, who may have fewer options to choose from. The PlayStation 5, released in 2020, carried a higher price tag than its predecessor due to its advanced features and the cost of obtaining relevant patents.
