About the Company
Mobirix is a Korean mobile gaming developer and publisher that started in 2004 whose base is
in Geumcheon-gu, Seoul, South Korea. The company has already developed over 200 games
for both Android and iOS. Currently, it has about 48 employees.
EXTERNAL ANALYSIS
A. Macro Environment
Economic Environment
● Increasing price of smartphones
According to International Data Corporation analyst, Anthony Scarsella, in IDC’s
Worldwide Quarterly Mobile Tracker, there is a 10.3 % increase in the average
selling price of smartphones from 2017 to 2018.
● Currency Exchange Rate
Since Mobirix’s mobile game products are sold internationally through Google
Play Store and Apple App Store, prices of paid games and in-app purchases may
differ and can affect sales.
Technological Environment
● Increasing popularity of VR (Virtual Reality) and AR (Augmented Reality)
technology
● Decrease in the number of users of PC games
● Adaption of artificial intelligence in most technology
Social Environment
● Low Birth Rate in South Korea
According to a study by Chosun Ilbo newspaper, South Korea’s fertility rate is
expected to fall to an all-time low this year, setting the country up for a host of
problems including underfunded pensions, expanding debt and economic
decline. This can also affect businesses like Mobirix because there will also be
less consumers.
● Change in mobile user demographics particularly regarding age
Contrary to popular belief, people who spent the most time in their mobile phones
are mothers specifically housewives rather than teenagers or students according
to the 2017 Korean White Paper on Gaming Industry. Considering this, Mobirix
should be able to properly know who they are supposed to cater with their
games.
● Rise in Nomophobia
According to studies, South Korean teens are at risk for smartphone addiction or
a psychological condition known as Nomophobia (the fear of not having his
phone).
● Protests rising from inhumane working environment for employees creating
gadgets
Example: Issue with the company Samsung versus employees that were
exposed to health risks particularly cancer
Natural Environment
● Seasonal Change (4 seasons in Korea)
The change in the weather can affect how employees work.
Legal Environment
● Intellectual Property Law or Copyright for digital contents may not be as helpful to
protect products in the future.
● Enforcement of laws limiting children or teenagers to use gadgets
For example, midnight curfew for computer gamers under 16 years old. The
South Korea government also thinks of distributing an application that will censor
harmful content in mobiles.
B. Micro Environment
Industry Rivalry
The industry rivalry in the mobile game industry is very high since there is a significant
number of companies developing and producing mobile games. In addition, the growth
rate of the industry is increasing and is expected to grow more for the following years.
Therefore, the industry becomes more attractive for new companies.
● Large Number of Competitors
Ex: com2us, Tencent that developed game MOBA League of Legends,
Activision Blizzard that develop Call of Duty
● Low Fixed Costs
Mobile game companies such as Mobirix does not require extensive physical
infrastructure.
● High Strategic Relevance
Through AdMob by Google, Mobirix implemented a hybrid monetization model,
using a combination of in-app ads and in-app purchases together to maximize
revenue. Adding ads to the mix allowed Mobirix to monetize non-paying players
while avoiding relying solely on IAP customers, who can end up leaving the app.
● Little differentiation between products
Mobirix develops and publishes games with various genres that are almost
similar to other mobile games available in the market.
Example: Mobirix’s Block Breaking King VS EA’s Tetris
● High growth rate of the industry
According to the 2017 White Paper on Korean Game Industry, the mobile
game market made a 26.9% year-on-year growth in 2016, and posted USD
45.489 billion in sales
Barriers to Entry
Barriers to entry is low in comparison to other digital games. The development and
production of mobile games are relatively cheaper. Moreover, other companies can also
compete with Mobirix easily because there is a low to moderate switching cost for
consumers.
● Low fixed costs
In comparison with other gaming platforms such as PC games, online games,
console games, etc., mobile games have a low fixed cost.
● Low Trust and Brand Loyalty
Since there are a lot of games in the market especially Free-to-Play (F2P)
games, users can easily change the mobile games they have. The availability of
similar games but with better features could also lower the level of loyalty mobile
gamers have for Mobirix.
● A steep learning curve
Publishing Free-to-Play games does not guarantee profit. Thus, having an
effective strategy to monetize it is very important for Mobirix i.e. through in-app
purchase and in-app ads.
● Low to Moderate switching costs
Users do not have to pay to play most of Mobirix games. But in-app purchase
can be done to enhance gaming experience.
● Strong intellectual property protection
Mobirix mobiles games are protected by the Intellectual Property Law. The
Copyright Law also play an important role to develop and protect the company’s
products.
Substitute Products
Substitutes are normally derived from distinctive business that manage to fulfill
consumers’ necessities and needs. These necessities and needs are further supported
and met by key industry.
Substitutes could threaten Mobirix if they have distinctive feature classifications. To
determine possible substitutes, we need to know why customers use Mobirix’s mobile
games:
1. For Leisure (killing time) - hang out with friends, exercise
2. Brain exercise - play music instrument, puzzle
3. Entertainment - Watch movies through Netflix or Youtube, picnic
4. Sense of Achievement (want to advance in the games/ compete with others)-
play sport
5. Socializing - engage in social media platforms such as Facebook, Instagram,
Twitter, etc.
Bargaining powers of buyers and suppliers
Bargaining powers of buyers is high
● High concentration of buyers
Gamers have the option to choose from a large number of gaming and
entertainment options. In addition, they can play games on either consoles,
desktops, or mobile devices.
● A high degree of market transparency
The buyers are highly informed about the latest trends, downloads and games,
along with their cost structures. Information is available through various online
platforms, social media channels and blogs.
Nowadays, there are a lot of Youtuber who livestream their playing process or
review about thegame, and one bad or disappointing offering that causes a revolt
from the gaming community can devastate a company.
● Low switching costs and weak network effect
Within the same platform switching cost is very low(free) between different
games or games who provide the same experience.
Bargaining of suppliers is high
● Strong fragmentation of suppliers
Who are the suppliers for Mobirix?
1. Hardware producers
2. Engine developers
3. Google (Play Store) and Apple (App Store)
Since there is a significant number of hardware producers and engine
developers, these suppliers are under no pressure to negotiate with mobile game
developers like Mobirix. Any price drops are more a function of their own
incumbent competition than the power of Mobirix as a buyer. Switching engines
for mobile games will also cost months of productivity.
The retail stores for Mobirix, Play Store and App store, have the ultimate power
and control in distribution.
● Products are increasingly becoming commodities
With the growing presence of mobile games, a lot of companies have developed
games that are almost like each other.
DEFINING THE INDUSTRY
The mobile gaming industry is a subset of the video game industry. It specializes in creating
gaming content for hand-held devices such as smartphones, tablets, feature phones, etc.
Although most of the available games are of different genres, the industry is dominated by
casual games - games that are intended to appeal to mass audience due to their gentle learning
curves.
Age Segmentation: 18 years old and above mobile users
Target Market Segment: Product Specialization
INTERNAL ANALYSIS
Understanding a business in depth is the goal of internal analysis. This analysis is based
on resources and capabilities of the firm. A good starting point to identify company resources is
to look at tangible, intangible and human resources.
Tangible resources are the easiest to identify and evaluate, financial resources and
physical assets are identified and valued in the firm’s financial statements.
Intangible resources are largely invisible, but over time become more important to the
firm than tangible assets because they can be a main source for a competitive advantage. Such
intangible resources include reputational assets (brands, image, etc.) and technological assets
(proprietary technology and know-how).
Human resources or human capital are the productive services human beings offer the
firm in terms of their skills, knowledge, reasoning, and decision-making abilities.
KEY RESOURCES
TANGIBLE
Financial The firm’s borrowing capacity and its internal fund generation determines its
capacity to weather fluctuation in demand and profit overtime
Mobirix generate revenue $14.41 million In the past years.
Physical The physical resources related to plan, equipment, asset, technology and raw
materials
Resale value of asset, age of capital equipment
• Office in Seoul, South Korea
• Computers
• Office Equipment and Supplies
Others •Company’s official website
•Social Media pages such as in Facebook and Twitter
•Game engine
•Software used in creating games
INTANGIBLE
Technological technology in the term of proprietary technology such as Copyright, patents,
trade secret and expertise in application of technology a know-how approach.
● Own copyright and patents for each game being developed
● Know how to develop games suitable to target market and in demand
in the market
Reputation Reputation with customers through ownership of brand, established
relationship with customers, reputation on the firm’s products and services.
Brand recognition, percent of repeat buying, level and consistency of
company performance.
● Games provided by Mobirix have great feedback from consumer.
Based on feedback in apps store
Resources are not productive on their own. The most productive tasks require that resources
collaborate closely together within teams. The term organizational capabilities are used to refer
to a firm’s capacity for undertaking a particular productive activity. Our interest is not in
capabilities per se, but in capabilities relative to other firms. To identify the firm’s capabilities we
will use the functional classification approach. A functional classification identifies organizational
capabilities in relation to each of the principal functional areas.
CAPABILITIES
FUNCTIONAL AREA CAPABILITIES
Corporate 1. Financial management
2. Expertise in strategic control
3. Effectiveness in motivating and coordinating business unit
4. Overall company management/ resources management
Information Comprehensive and effective information system that can be used for
management managerial decision making
● Have data based on consumer.
● Rank each games to analyse taste and preference of
consumer
Research and Capabilities in basic research
development ● Have team that do market research and used it to develop
new games
Product design Design capabilities
● Have expert team to design each games
Marketing 1. Brand management and promotion
2. Understand and responsiveness towards market trend
Sales and fulfillment 1. Effectiveness in promoting and executing sales.
2. Efficiency and speed fulfillment
3. Quality and effectiveness of customers services
The core competence of MOBIRIX its ability to release new games regularly, therefore, offering
a wide range of Free-To-Play games while implementing a hybrid type of monetization.
VALUE CHAIN
A. Primary activities
1. Inbound logistics
● Distribution channels for developer and publishers
● Includes mobile game portal and pre- installation on mobile devices.
● Contracts between publisher and developers
2. Operation
● Publishers of multiple top game in various game genres
● Maintenance activity for game engines, game development middleware and
project management tools
● There are a large number of tools available for games development including
games engines for consoles, Mac and PC environments as well as middleware
programmes and project management software.
3. Outbound logistics
● Generating game titles for placement through online and retail distribution
channels
● Digital distribution, whether over the internet, or through mobile providers, is an
attractive alternative due to the reduction in overhead costs
4. Marketing & Sales
● Use M2M marketing (mobile to mobile), SNS (Facebook) and in-app ads to
increase sales
● Free download
5. Service
● Service through e-commerce model: update more information, features,
subscription...
B. Support Activities
1. Firm Infrastructure
● Distribution center: Nclould24 & ENTscale
● Office: in Seoul
● Development of gaming studio
● Hardware suppliers: Google (Play Store) and Apple (App Store)
2. Human resources
● Attracting the right human capital talent (producer/ developer)
● Now have 48 employees
3. Technology
● Technology is very important for a mobile game company.
● Protection of intellectual property: Copyright by MOBIRIX Corporation.
● Design of new software titles for various platforms.
● Multiplayer functionality for mobile games can be achieved through Bluetooth,
GPRS, 3G or Wi-Fi connection
4. Procurement
● Purchase of fixed assets: PC, hardware which are inputs for different processes
within the company
SWOT ANALYSIS
STRENGTH WEAKNESS
- Including 200 games for both IOS and - High volume of competitors
Android - Low switching cost for customers
- Good reputation in Korea - Not much different with the products of
- Low fixed cost competitors.( e.g: Mobirix’s Block Breaking King
- Using a combination of in-app ads and and EA’s Tetris)
in-app purchase to maximize revenue - Just popular in Korea
- Know how to entertain people by new
games with new features
OPPORTUNITY THREATEN
- Penetration of new market all over the - The appearance of many other kinds of video
world game:
- The retail of derived product like toys, ● VR/AR
books, movies, etc can bring a great ● Nintendo Switch
effect. ● Console game
- Introduction of Screen Time
- The competition is fast, many competitors:
Com2us, Tencent,...
- Customer’s preference changes quickly, so the
company has to be flexible with the development of
new games.
CONCLUSION
VALUE CURVE
Before:
Suggestions:
• Develop games that are compatible with VR and AR Technology
• Extend mobile games to PCs through App Players
• Create games that are educational for children or even adults (i.e. through storyline
based on history, science, etc.)
• Create a reward system for players’ engagement with other people.
• Advocate for responsible usage of mobile phone or gadgets in general
After:
Submitted by:
Camille Peteza (201819655)
Wan Aqilah (201819733)
Thuy Duong (201819727)
