Market Segmentation Analysis of the Video Games Industry

Targeting unique segments in today’s competitive video game market has become not only a necessity but is a prominent reality. Thus the need to implement an informative cluster analysis has become a critical aspect of business. This book sets out to identify the degree of similarity and/or dissimilarity amongst operating gamer segments in USA Japan and Europe based on sales and product characteristics hence a two – step market segmentation analysis was implemented. Firstly a dendrogram of each market was constructed through hierarchical clustering. The distance metric was created using Euclidean distance while the linkage which gave the most informative results was Ward’s minimum – variance. The second step involved implementing k – means clustering on the larger population by using the lowest Root-Mean-Square (RMS) Standard Deviation and significant ANOVA (p<0.001) outcomes. As a result this analytical investigation resulted in informative cluster and gamer profiles. The analysis should be especially useful to professionals in marketing and analytics or anyone who may be considering contributing further to clustering the video game markets in these countries.