3/10/2005

Baseball Simulation

This article discusses how an entrepreneur from Germany made his own simulation baseball game. He designed the game so that fans can manage their own teams. The game plays according to statistical data, which makes the simulations more realistic in that the performances of the players are tied to their current numbers, like batting averages. The business is not very large; however, it has found a profitable niche in the market. Customers can download the simulation games from ootpdevelopments.com for $19.95 a each game. According to Markus Heinsohn, his company's sales reaches "six-digits" every year. He has found a way to make money doing what he loves.

1 comment:

Dr. Tufte said...

-1 on MEG's comment for poor editing.

I think what you seeing here is the early stages of monopolistic competition. Sports simulation games have been around for a long time: first with cards and boards, then computers, and so on.

The story every time is that the firms start out making a profit (when they are acting as monopolists) and then sink towards zero profits through free entry.

The fundamental problem is that they aren't selling some fixed resource over which they have control. They can't buy and monopolize the probability concepts they are using, or the raw data on performance. So, they can't keep out the competition.