The key to success will be the ability to create production teams that can cost effectively translate storytelling skills and technical expertise into innovative, popular products. The three main variables such teams will work with are technology, creativity and content. In recognition of this new reality, publishers are building production studios similar to those found in the record and video industries. Product line breadth Product line diversity and breadth strengthens a company's ability to withstand an expected product glitch, unforeseen competitive threat or shift in market conditions. Those companies that are platform independent and can spread their fixed costs across either a wider development base or more market segments will have a distinct advantage.
Several trends make it difficult for smaller publishers to compete.
To mitigate financial risk, retailers tend to select titles with recognisable icons and prefer to work with financially strong publishers. In addition, the entry of mass merchants will translate into fewer titles being marketed broadly. Once the installed base of CD-ROM drives reaches a critical mass, the distribution of multimedia software will more closely resemble that of entertainment media, such as video, audio and books. Those companies that have access to recognisable personalities or can develop captivating fictional characters can create product franchises. Financial resources Financial strength will increasingly become a competitive advantage.