Corporate Governance – A case in the Video Games Industry

Below is a piece of coursework that I produced for my final year degree program.  The module is on Corporate Governance and for this piece of coursework I had to find a case within an industry and company, apply corporate governance models and contrast with any other examples.  All this work is work of my own, if you come across this in the future I would advise you to use this in a responsible manner, reference and credit where due as well as using this as a guide for source material.

If you would like to download a PDF of this, you can do so here with all the bells and whistles (along with missing images and formatting).  I would welcome the feedback and any discursive comments you may have about this piece. Enjoy.

“Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals….the aim is to align as nearly as possible the interests of individuals, corporations, and society” Sir Adrian Cadbury (1999)

Introduction

In this coursework I will be looking at Corporate Governance today and how it came to be today, within an industry I will also assess how corporate governance theories can be applied to a situation that has occurred and what can be learnt from this.

The development of Corporate Governance Today

Within UK corporate governance the key aspects are that a single board are collectively responsible for the success of the company. There are 4 points that are key to governing an organisation in a checks and balances exercise;

• The roles of Chief Executive and Chairman are separated
• There is a balance in Executive and independent non-Executive directors
• The organisation has strong, independent audit and remuneration committees
• There is an annual revaluation by the board of its performance

There is an emphasis on objectivity within directors and the interests of the organisation, there should also be a transparency on appointments awarded by the organisation and remunerations made by the organisation. Shareholders have effective rights from a legal standpoint within the governing of an organisation. This ‘Code of best practice’ is not a legal requirement but is rather a guidance on how to do things within the organisation, which is why it is given a ‘Comply or Explain’ requirement for listing meaning that if an organisation does not follow the UK Corporate Governance Code, they must explain as to why they see fit to do something else. “The Code is not a rigid set of rules. It consists of principles (main and supporting) and provisions. The Listing Rules require companies to apply the Main Principles and report to shareholders on how they have done so.” (FRC June 2010)

The Guitar Hero Syndrome

Well, we hear it all over the industry, Music Genre is failing and this that the other. But what is causing such a decline? What’s stifling the market? And is there a future for the genre?

As for all music games they are peripheral driven, peripherals make up the majority of the expenditure for the consumer. What makes it worse is that these peripherals seem to change as often as the new games come out. I firmly believe that unless a new instrument is added to the roster the peripherals should remain the same through the majority of the consoles life span, this will allow the consumer to have more disposable income for the following parts of my idea of how the music games genre should work in the future.

This Video Makes Me Want Modern Warfare 2!!!

Seriously, that is AWESOME!
I should shop around for it, I wonder if Sainsburys still have it for £26, mmmmm…

New Play Control – Motion, is it the Vital Component?

Nintendo pioneered the move for console manufacturers to rethink control designs with the Wii remote. This was quickly and somewhat unashamedly ripped off my Sony with the Six Axis controller, we have Microsoft heavily hinted to release their new control scheme at E3 (you can read more about this in my previous blog). We have Tony Hawk’s RIDE coming soon for a rumoured $120 that includes a motion sensing board controller which is the only control option. It leaves me thinking, what about the other component of the Wii Remote.

New Play Control – Microsoft

Now everyone seems to have an opinion on new ways to play videogames, whether you love it or hate it this seems to be the future for the industry. This is not exclusive to console manufacturers, it is also open to publishers/developers of video games the best examples are EA/MTV/Harmonix and Red Octane/Activision with their seemingly never ending stream of music controllers, or an even more recent one would be with Tony Hawk’s RIDE with the new board peripheral that simulates a skateboard for the game but could also be used in the future as a snowboard, surfboard or even wakeboard.

Nintendo was the pioneer of opening up the games market to new control types, going all the way back to the NES with the power glove, the power mat and the synonymous R.O.B the robot. Up until the recent times Nintendo had a prototype controller for the Gamecube that is similar to the Playstation 3’s sixaxis controller they also had Donkey Kong bongo’s moving to the Wii with the Remote as a primary control option with motion and infra-red pointer control. Also looking at what the touch abilities have done for the handheld market and the possibilities for the in-game use of the DSi’s cameras already showing with augmented reality games in the works.