Like Any Industry, The Gaming Industry has Seen Several Cycles of Expansion and Consolidation GMAT Reading Comprehension

Reading Passage Question

Like any industry, the gaming industry has seen several cycles of expansion and consolidation. In many cases, trends and developments have enabled cagey and successful newcomers to absorb staid stalwarts who lost their edge. But over-expansion and an inability to maintain flexibility have turned the tables on more than one aggressive upstart.

Such was the case with Wizards of the Coast, following a breakout emergence in 1993. Known traditionally as a struggling outfit of gamers with more passion than business experience, Wizards of the Coast in 1993 published the now legendary title Magic: The Gathering and, in the process, rewrote the book on gaming. Combining the popularity of trading cards with a combative pseudo-role-playing game system, Magic spawned the collectible trading card game genre and became a whirlwind success. Sweeping through the related communities of gaming, collectibles, and fandom, the game sold in unprecedented numbers. The drive to win required players to amass decks containing the most powerful and rarest of cards. The card-hoarding mentality drove frenzied sales whenever the rumor of a new card's release spread across the budding Internet communities.

The trading card business flourished as many in the target market found themselves moving into professional careers with dramatically increased disposable income. Flush with cash, Wizards of the Coast sought acquisitions and, in 1997, acquired TSR, the famed owner of Dungeons and Dragons. This classic game was not only responsible for the rise of the modern social gaming market but was still the genre's most popular title. Spread thin and across many product lines, TSR had become a victim of its own success, unwilling to return to core product lines after diversifying into novels, video games, and even Saturday morning cartoons. TSR came at a discount and the management of Wizards immediately began making tough decisions and culling dead product areas.

Concurrently, Wizards' own expansion continued as a series of retail stores and clubs opened, providing places for players of Magic and other games to gather and play. Elaborate plans were made to re-launch much of the Dungeons and Dragons line in a new series of books and player aids. Finally, in 1999, old-school corporate America arrived in the form of Hasbro, which acquired Wizards at a phenomenal premium. For ownership of a company that was piling success upon success, however, no price seemed too high.

Unfortunately, a number of facts conspired to reverse the meteoric rise and bring about a gradual, painful descent. The seemingly inexhaustible interest in increasingly elaborate trading card games waned, and even the core offerings of Magic and Pokemon lost their excitement. The "dot-com" crash played its role in the decline since much of the fast-climbing IT profession, long a center of gaming and collectibles, found itself on hard times. Traditional role-playing gamers were disturbed by the push to release revised versions of Dungeons and Dragons and balked at several high-profile and high-budget launches. Soon Wizards' retail stores were closing and, in 2003, even its massive Seattle flagship store was forced to close. Today, Wizards of the Coast continues as a subsidiary of Hasbro, marketing to the more serious hobbyist gamer rather than to the casual game buyer. Ironically, its major income sources are now the various Dungeons and Dragons titles acquired years ago from then-struggling TSR

‘Like any industry, the gaming industry has seen several cycles of expansion and consolidation’ is a GMAT reading comprehension passage with answers. Candidates need a strong knowledge of English GMAT reading comprehension.

This GMAT Reading Comprehension consists of 3 comprehension questions. The GMAT Reading Comprehension questions are designed for the purpose of testing candidates’ abilities in understanding, analyzing, and applying information or concepts. Candidates can actively prepare with the help of GMAT Reading Comprehension Practice Questions.

Questions and Solutions

1. According to the passage, the struggles of Wizards of the Coast could best be seen as

1. not uncommon among game companies.
2. significantly more extreme than those faced by other game companies.
3. effectively identical to those faced by TSR.
4. a sign of the times during the "dot-com" crash.
5. the direct result of inexperienced management.

2. The tone of this passage could best be summarized as:

1. ambivalent
2. optimistic
3. revisionary
4. disparaging
5. cautionary

3. According to the information in the passage, at the time of its acquisition by Wizards of the Coast, TSR had been involved with all of the following products EXCEPT:

1. Saturday morning cartoons
2. Role-playing games
3. Collectible trading card games
4. Works of fiction
5. Video games

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