TAILIEUCHUNG - VIDEO GAMES: SERIOUS BUSINESS FOR AMERICA’S ECONOMY

The “Cost of Health Insurance” continues as the number one small-business problem, a posi- tion it has held for 25 years. The number one ranking is reflected in all but nine of the 50 sub-categories of businesses analyzed in this survey. Four of the nine defectors, including agriculture and transportation/warehousing, rank Energy Costs, except Electricity as their number one problem. The percent of small-business owners who cite the “Cost of Health Insurance” as critical fell slightly from 56 percent in 2008 to 52 percent in 2012. In 2004, this figure reached 66 percent during the height of yearly premium increases. But. | Video Games Serious Business for America s Economy by Robert W. Crandall J. Gregory Sidakft Executive Summary and Major Findings Introduction I. The Market for Entertainment Software as a Good A. The Economics of the Entertainment Software Industry B. The Entertainment Software Industry s Contribution to Consumer Value 1. Consumer Spending 2. Consumer Surplus II. The Demand for Inputs Used in the Production of Entertainment Software A. Labor B. Advanced Computer Equipment III. The Stimulative Effect of Entertainment Software on Technological Innovation and Consumer Demand in Complementary Markets A. Processors B. Devices 1. Gaming Consoles 2. Specialized Gaming Computers 3. Audio Visual Devices 4. Specialty Interactive Devices C. Bandwidth Fixed and Mobile Telecommunications 1. Residential Broadband Usage 2. Mobile Usage D. Content 1. Non-Interactive Entertainment 2. Complementarity Among Games over Time t Senior Fellow the Brookings Institution tt Visiting Professor of Law Georgetown University Law Center. This report was commissioned by the Entertainment Software Association. The views expressed here are those of the authors and not those of their academic institutions. The authors would like to thank John Kelley and Scott Brooks of IBM Joel Radford at Mercury Computers and Richard Doherty of Envisioneering for their interviews. - 2 - 3. Advertising 4. Summary IV. Technology Transfers from the Entertainment Software Industry A. Real Estate and Travel Websites B. Military Training C. Health Care D. Intelligence Testing E. Pollution Control F. Corporate Training G. Manufacturing Quality Control Conclusion Appendix Consumer Surplus Calculation Executive Summary and Major Findings This paper analyzes the contribution of the computer and video gaming industry entertainment software to the . economy. There are several ways to measure spending on entertainment software. The NPD Group estimates that . spending on entertainment software and hardware in 2005 reached

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