Decision Tree Applications

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TABLE OF CONTENTS:

INTRODUCTION        

ARTICLE 1        

1.        INDUSTRY ANALYSIS        

2.        THE ANALYTIC APPROACH        

3.        CRITICAL INTERPRETATION        

ARTICLE 2        

1.        PROBLEM ANALYSIS        

2.        NEED FOR DECISION TREE ALGORITHM        

3.        Operation        

4.        IMPLEMENTATION OF DT BASED ALGORITHM:        

5.        VALUE ADDED BY DT:        

REFERENCES        

INTRODUCTION

ARTICLE 1

CLASSIFICATION TREES AND DECISION-ANALYTIC FEEDFORWARD

CONTROL: A CASE STUDY FROM THE VIDEO GAME INDUSTRY

1. INDUSTRY ANALYSIS

In the past four decades, the industry of video game development has grown leaps and bounds. Starting from the basic bouncing block games, the developers have been successful in making the most of the technological growth to produce games involving a virtual world with life-like figures (Wolf, 2008). The video game companies in 2013 posted worldwide sales worth $93 billion, with revenues from US alone exceeding $21 billion (The Entertainment Software Association, 2014). With the development of enhanced gaming capabilities on newer devices like smartphones and tablets, this industry has grown four times faster than the US economy between the years 2009 and 2012 (Gaudiosi, 2015). Considering the fact that four out of every five households in America own a gaming console and that on an average, there are two gamers in every house in USA, the market for the video game developers is vast (Entertainment Software Association, 2015).

It is therefore only natural that the economic stakes involved in the development of video games are equally high (Brydon & Gemino, 2008). However, not all games that are developed are successful in overcoming the cost of development, let alone achieving the expected profitability.

The following boxplot indicates the distribution of Life-to-Date Sales of 1317 sample games between 2000–2004 from the data set chosen for this article:

Figure 1 - Distribution of Life-to-Date Sales

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According to the boxplot, the median revenue earned by the developers is only $3.9 million. Thus, it is evident that the process involved in deciding whether to invest in the development of a particular game is extremely complicated – mainly because of a long lag that exists between the decision to develop a game and its market outcomes and the requirement that these decisions be irreversible (Brydon & Gemino, 2008) (Barry, Kemerer, & Slaughter, 2006).