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Horizontal and vertical integration

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Vertical and horizontal integration and ownership issues

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Horizontal and vertical integration

  1. 1. OWNERSHIP VerticalIntegration Thisiswhereacompanyownseachpartoftheproduction anddistributionprocess.Forexample:Nintendoisprobably themostverticallyintegratedvideogamesproducer. Sometimesacompanywillbecomeverticallyintegratedby buyinguparivalormerging;ActivisionBlizzardforexample. HorizontalIntegrationHorizontalIntegration HorizontalIntegrationiswhereacompanyexpandsbybuying upcompetitorsorownersofintellectualproperty.When there’saneedit’sboughtin.ForexamplewhenSonyneeded todeveloptheirstreamingdistributionsystemPlaystation NowtheyboughtGaikaifortheintellectualproperty. SometimeshorizontalintegrationcanbeasynergeticSometimeshorizontalintegrationcanbeasynergetic agreement.ForexampleBungiehasatenyearcontractwith ActivisiontoproduceDestinywhileActivisionpublishand distributeit.

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