Horizontal and vertical integration

OWNERSHIP

Vertical Integration

This is where a company owns each part of the production and distribution process. For example: Nintendo is probably the most vertically integrated video games producer. Sometimes a company will become vertically integrated by buying up a rival or merging; Activision Blizzard for example.

Horizontal IntegrationHorizontal Integration

Horizontal Integration is where a company expands by buying up competitors or owners of intellectual property. When there’s a need it’s bought in. For example when Sony needed to develop their streaming distribution system Playstation Now they bought Gaikai for the intellectual property.

Sometimes horizontal integration can be a synergetic Sometimes horizontal integration can be a synergetic agreement. For example Bungie has a ten year contract with Activision to produce Destiny while Activision publish and distribute it.