Electronic Health Records (EHR) -- Pharmacy Marketing Case Study

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Electronic Health Records (EHR) -- Pharmacy

Marketing Case Study

For confidentiality purposes, the name of this company has been withheld. In this report, it will be referred to as Tester Tech, Inc. (TTI).

Tester Tech, Inc. (TTI) has been in business for five years, and in that time has established a strong position in the computer/video game industry as an outsource provider of game testing services. Before being released to market, video and computer games (just like any software) undergoes rigorous quality assurance and testing to ensure that it operates correctly. Many game makers are in the practice of outsourcing this testing process to companies that specialize in the critical, yet often exacting and repetitive, work of running tests. As one of these outsource test firms, TTI employs game testers who will put a game "through its paces" to find and fix any "bugs" (malfunctions) in the software, or fix compatibility issues with different hardware and video platforms.

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Additionally, the company provides localization and technical communication services. Localization involves translating games into multiple languages for worldwide release, while also adjusting cultural references to appeal to local markets (e.g., instead of a hamburger restaurant on a street corner in the American version of a game, the restaurant will be changed to a curry stand for the game's release in India, where beef is not commonly consumed). Technical communications services provided by TTI include creating user manuals and online help files for game players.

Case Study on Electronic Health Records (EHR) -- Pharmacy Marketing Assignment

TTI's customers include some of the leading video game companies in the world, including Electronic Arts (maker of blockbuster games like Madden NFL) and Microsoft Xbox. However, the console game testing market, which has been TTI's primary focus, is relatively flat. TTI is planning to expand into two new testing market segments: online games and mobile games. Additionally, the company is considering expanding its testing capabilities beyond games and into the general software test market. TTI wants to launch into these new market segments to expand its customer base and grow business. Currently, annual revenues are approximately $20 million ($17.7 million for the testing services, and roughly $2.3 million for localization/translation services).

Growth targets for the next 3 years are:

Increase existing business line revenues in console game testing and localization by 5% per year, to $21 million by end of FY 2011, $22.5 million in FY2012, and $23.1 million in FY2013. (Note that the Fiscal Year ends March 31, so April 2, 2010 -- March 31, 2011 is FY 2011)

Capture $2 million in additional revenues from a successful launch into a new market segment in FY2011, $5 million in FY2012, and $8 million in FY2013.

Current Market Situation (Situation Analysis)

Industry Background: The video game industry is divided into a number of segments based on type of platform, type of game, and type of player. The platform segmentation is primarily relevant to TTI. There are three major platforms for interactive entertainment (DFC Intelligence, p.8):


Personal computers, i.e., PCs and Macs. Personal computer games include both packaged games that can be purchased and loaded onto a system for individual play, as well as online games, where the player accesses the game from a website via live internet connection.


TV-based video game console systems, e.g., Sony Playstation, Nintendo Wii, and Microsoft Xbox. The customer purchases a console and then hooks it up to a TV or other monitor to play.


Portable systems: PDAs and mobile phones that offer multiple uses (telephone, internet access) as well as ability to play games. Portable systems also include devices made specifically for games.

Industry Roles: There are a number of players in the game development and production value chain. The entertainment games market comprises platform makers, publishers, and developers. The platform makers include Sony, Nintendo, and Microsoft, as well as the makers of mobile phones, and other hardware on which games are played. Console platform makers create some of the game titles developed for their consoles; others are published by independent publishers who pay royalties to the console makers. Developers create games from scratch. Publishers manage the release and marketing of those games; many publishers also do development, or own or partner with development studios that feed the publisher's release slate. (DFC Intelligence, 2004, pp. 9-14).

TTI's Customers: The market dynamics for computer and video game testing serves closely parallels the video game market itself, as new platforms and new game releases drive the need for testing services. However, game testing service revenues are not tied to game sales revenues, per se; testing is a pre-release cost for the game companies, regardless of whether a game sells 100,000 copies or 10 million copies. The publisher typically pays for testing and certification in the PC and console markets, where games are growing larger and more complex. In the mobile market, where games are simpler and less complex than console/PC games, the developer typically pays for testing. (DFC Intelligence, pp. 34-38). Within developer and publisher firms, the individuals (decision makers) most likely to engage an outsource testing firm such as TTI include: QA Directors/Managers, Product Managers, Test Managers, Development Directors/Managers, and Production Directors/Managers.

Market Outlook: The console video game market remains solid with continued growth in sales revenues for both console hardware and console games. Console game sales are projected to grow at a healthy 6.9% per year through 2010 (PriceWaterhouse Coopers, 2008). However this growth comes largely from existing consoles and existing games titles. There are no new major console releases on the market that would drive a surge in new game development and testing activity, so the market prospects for TTI in that segment appear secure, but flat.

At the same time, there is rapid growth in both the online gaming segment and mobile games segment, areas where TTI traditionally has not been as dominant. Online games range from simple, single-player arcade-style games to MMOGs (massively multiplayer online games) linking thousands of players across the globe in real time in the same virtual "world." The online gaming market is growing rapidly. Online games are predicted to see an annual growth rate of 16.9% per year through 2012 (PriceWaterhouse Coopers, 2008), but may even be exceeding those predictions, for example, "[o]nline gaming sites attracted 87 million U.S. visitors in May 2009, up 22% year-on-year." (Ivan, 2009).

Likewise the mobile game market (encompassing games played on cell phones and on handheld PDAs like the iPhone and Blackberry, as well as handheld game devices like Nintendo's GameBoy) is experiencing strong growth, particularly in overseas markets due to the ubiquity of cell phones and PDA devices in both westernized and developing nations. The mobile game market is projected to reach $18 billion by 2014 (Crook, 2009).

Game testing is just one segment of the larger software testing service industry, which includes all types of packaged software programs and enterprise software for both consumer and business use. The software testing industry as a whole represents a rapidly growing market, projected to reach $56 billion by 2013, despite the global economic crisis, growing at a rate of 9.5% per year (Hertzlich, 2008).

Services: TTI offers the following services to meet the needs of its video game company customers, allowing them, essentially, to hand off a "raw" game to TTI, and then have all of the testing and quality assurance, translation, compatibility and other adjustments made to have the game be "market ready." This places TTI at a critical juncture in the video game value chain, between the game development process and the point at which the game can actually be released and sold. TTI's services include:

Game Software Testing

Game Hardware Testing

Localization & Technical Communications

Game play



Compliance (TCR/TRC, Lot Check)



Video Testing


Integration testing

Peripherals & Devices

Engineering Support





FAQ and Online Help

Competition: Many of the other game testing companies in the market are privately held, like TTI, thus their revenue and other information is unavailable. Nevertheless, based on a speculative set of assumptions, best guesses, and publicly available information from press releases and business databases, it is estimated that the total outsource game testing market currently stands at roughly $124 million annually. With $17.7 million in revenues, that gives TTI an estimated 14.3% market share, making it one of the larger players in the industry, we believe. Some of the leading competitors include:

Absolute Quality (a division of Vincity AQ). With revenues of $23.5 million, Absolute Quality positions themselves as testing specialists, with a games-focused practice area, but a broader industry clientele. Their services in games include testing, localization and gamer technical support. They have created and trademarked a proprietary testing tool "Bug City" which helps reinforce their image as experts in the testing field. (www.aqinc.com)

Babel Media is based in the UK, with $11 million in annual revenue. They have positioned themselves as a full-service game services specialist firm. In addition to game QA, testing and localization, they also offer multi-media services including animation and voice-over talent recording. They are a… [END OF PREVIEW] . . . READ MORE

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