video game industry part of a series on thevideo game industry activitiesjobs video game design game design game art design game development game developer game modification game producer game programming game programmer game publisher game studies game testing game journalism level design development game ai game design interaction design game programming level design video game art video game design video game graphics video game music types adult game casual game indie game nongame interactive art interactive movie nonviolent video game serious game advergame art game edugame exergame topics digital rights management drm outsourcing software license enduser license agreement eula video game preservation related video game history of video games lists list of indie game developers list of video game developers list of video game industry people list of video game publishers list of video game websites vte the video game industry is the economic sector involved in the development marketing and monetization of video games it encompasses dozens of job disciplines and its component parts employ thousands of people worldwide overview the computer and video game industry has grown from focused markets to mainstream they took in about us95 billion in the us in 2007 117 billion in 2008 and 251 billion in 2010 esa annual report modern personal computers owe many advancements and innovations to the game industry sound cards graphics cards and 3d graphic accelerators faster cpus and dedicated coprocessors like physx are a few of the more notable improvements sound cards were developed for addition of digitalquality sound to games and only later improved for music and audiophiles game industry value chain ben sawyer of digitalmill observes that the game industry value chain is made up of six connected and distinctive layers capital and publishing layer involved in paying for development of new titles and seeking returns through licensing of the titles product and talent layer includes developers designers and artists who may be working under individual contracts or as part of inhouse development teams production and tools layer generates content production tools game development middleware customizable game engines and production management tools distribution layer or the publishing industry involved in generating and marketing catalogs of games for retail and online distribution hardware or virtual machine or software platform layer or the providers of the underlying platform which may be consolebased accessed through online media or accessed through mobile devices such as smartphones this layer now includes network infrastructure and nonhardware platforms such as virtual machines eg java or flash or software platforms such as browsers or even further facebook etc endusers layer or the usersplayers of the games disciplines the game industry employs those experienced in other traditional businesses but some have experience tailored to the game industry some of the disciplines specific to the game industry include game programmer game designer level designer game producer game artist and game tester most of these professionals are employed by video game developers or video game publishers however many hobbyists also produce computer games and sell them commercially history history of video games 1940s1960s early history of video games and early mainframe games prior to the 1970s there was no significant commercial aspect of the video game industry but many advances in computing would set the stage for the birth of the industry many early publiclyavailable interactive computerbased game machines used or other mechanisms to mimic a display while technically not video games they had elements of interactivity between the player and the machine some examples of these included the 1940 nimatron an electromagentic relaybased nimplaying device designed by edward condon and built by westinghouse electric for the new york worlds fair the development of cathode ray tubethe core technology behind televisionscreated several of the first true video games in 1947 thomas t goldsmith jr and estle ray mann filed a patent for a cathode ray tube amusement device their game which uses a cathode ray tube hooked to an oscilloscope display challenges players to fire a gun at target between the 1950s and 1960s with mainframe computers becoming available to campus colleges students and others started to develop games that could be played at terminals that accessed the mainframe one of the first known examples is spacewar developed by harvard and mit employees martin graetz steve russell and wayne wiitanen the introduction of easytoprogram languages like basic for mainframes allowed for more simplistic games to be developed 1970s the magnavox odyssey released in 1972 was the first home gaming console see also history of video game consoles first generation video game crash of 1977 golden age of video arcade games and history of video game consoles second generation in 1971 the arcade game computer space was released soon after space invaders was licensed for the atari vcs later known as atari 2600 becoming the first killer app and quadrupling the consoles sales by the end of the 1970s the personal computer game industry began forming from a hobby culture 1980s the nintendo entertainment system released in 1985 helped to revive the american gaming industry after the video game crash of 1983 see also golden age of video arcade games history of video game consoles second generation north american video game crash of 1983 history of video game consoles third generation and history of video game consoles fourth generation the early 1980s saw the golden age of video arcade games reach its zenith the total sales of arcade video game machines in north america increased significantly during this period from 50 million in 1978 to 900 million by 1981 the early part of the decade saw the rise of 8bit home computing and homemade games especially in europe with the zx spectrum and commodore 64 and asia with the nec pc88 and msx this time also saw the rise of video game journalism which was later expanded to include covermounted cassettes and cds in 1983 the north american industry crashed due to the production of too many badly developed games quantity over quality resulting in the fall of the north american industry the industry would eventually be revitalized by the release of the nintendo entertainment system which resulted in the home console market being dominated by japanese companies such as nintendo the latter part of the decade saw the rise of the game boy handheld system in 1987 nintendo lost a legal challenge against blockbuster entertainment which enabled games rentals in the same way as movies 1990s the playstation was the most popular gaming console of the fifth generation which saw the common adoption of cd media see also history of video game consoles fourth generation history of video game consoles fifth generation and history of video game consoles sixth generation the 1990s saw advancements in game related technology among the significant advancements were the widespread adoption of cdbased storage and software distribution widespread adoption of guibased operating systems such as the series of amiga os microsoft windows and mac os advancement in 3d graphics technology as 3d graphic cards became widely adopted with 3d graphics now the de facto standard for video game visual presentation continuing advancement of cpu speed and sophistication miniaturisation of hardware and mobile phones which enabled mobile gaming the emergence of the internet which in the latter part of the decade enabled online cooperative play and competitive gaming aside from technology in the early part of the decade licensed games became more popular the video game industry generated worldwide sales of 198 billion in 1993 2000s see also history of video game consoles sixth generation and history of video game consoles seventh generation in 2000s the video game industry is a juggernaut of development profit still drives technological advancement which is then used by other industry sectors technologies such as smartphones virtual reality and augmented reality are major drivers for game hardware and gameplay development though maturing the video game industry was still very volatile with thirdparty video game developers quickly cropping up and just as quickly going out of business 2010s see also history of video game consoles eighth generation though not the main driving force indie games continue to have a significant impact on the industry with sales of some of these titles such as spelunky fez dont starve castle crashers and minecraft exceeding millions of dollars and over a million users economics early on development costs were minimal and video games could be quite profitable games developed by a single programmer or by a small team of programmers and artists could sell hundreds of thousands of copies each many of these games only took a few months to create so developers could release multiple titles per year thus publishers could often be generous with benefits such as royalties on the games sold many early game publishers started from this economic climate such as origin systems sierra entertainment capcom activision and electronic arts as computing and graphics power increased so too did the size of development teams as larger staffs were needed to address the everincreasing technical and design complexities the larger teams consist of programmers artists game designers and producers their salaries can range anywhere from 50000 to 120000 generating large labor costs for firms producing videogames the game development team has to select a profitable and suitable method to sell or earn money from the finished game traditionally the game monetization method is to sell hard copies in retail store now some developers are turning to alternative production and distribution methods such as online distribution to reduce costs and increase revenue today the video game industry has a major impact on the economy through the sales of major systems and games such as call of duty black ops which took in over 650 usd million of sales in the games first five days and which set a fiveday global record for a movie book or videogame the industry wide adoption of highdefinition graphics during the seventh generation of consoles greatly increased development teams sizes and reduced the number of highbudget highquality titles under development in 2013 richard hilleman of electronic arts estimated that only 25 developers were working on such titles for the eighth console generation compared to 125 at the same point in the seventh generationconsole cycle seven or eight years earlier retail the games industrys shift from brick and mortar retail to digital downloads led to a severe sales decline at video game retailers such as gamestop following other media retailers superseded by internet delivery such as blockbuster tower records and virgin megastores gamestop diversified its services by purchasing chains that repair wireless devices and expanding its tradein program through which customers trade used games for credit towards new games publishers often funded tradein deals to encourage consumers to purchase new games tradein customers at the australia retailer game would purchase twice the games per year as nontradein customers the sale of preowned games kept retailers in business and composed about a third of games revenue retailers also saved on the uks valueadded tax which only taxed the retailers profit on preowned games rather than the full sale on regular games the former tradein retail executives behind the tradein price comparison site trade in detectives estimated that the united kingdoms tradein industry was about a third of the size of its new games business practices video game industry practices are similar to those of other entertainment industries eg the music recording industry but the video game industry in particular has been accused of treating its development talent poorly this promotes independent development as developers leave to form new companies and projects in some notable cases these new companies grow large and impersonal having adopted the business practices of their forebears and ultimately perpetuate the cycle however unlike the music industry where modern technology has allowed a fully professional product to be created extremely inexpensively by an independent musician modern games require increasing amounts of manpower and equipment this dynamic makes publishers who fund the developers much more important than in the music industry breakaways in the video game industry it is common for developers to leave their current studio and start their own a particularly famous case is the original independent developer activision founded by former atari developers activision grew to become the worlds second largest game publisher in the mean time many of the original developers left to work on other projects for example founder alan miller left activision to start another video game development company accolade now atari ne infogrames activision was popular among developers for giving them credit in the packaging and title screens for their games while atari disallowed this practice as the video game industry took off in the mid1980s many developers faced the more distressing problem of working with flybynight or unscrupulous publishers that would either fold unexpectedly or run off with the game profits piracy the industry claims software piracy to be a big problem and take measures to counter this digital rights management have proved to be the most unpopular with gamers as a measure to counter piracy the most popular and effective strategy to counter piracy is to change the business model to freemium where gamers pay for their ingame needs or service strong serverside security is required for this to properly distinguish authentic transactions from hacked faked transactions creative control on various internet forums some gamers have expressed disapproval of publishers having creative control since publishers are more apt to follow shortterm market trends rather than invest in risky but potentially lucrative ideas on the other hand publishers may know better than developers what consumers want the relationship between video game developers and publishers parallels the relationship between recording artists and record labels in many ways but unlike the music industry which has seen flat or declining sales in the early 2000s also personal computers have made the independent development of music almost effortless while the gap between an independent game developer and the product of a fully financed one grows larger in the computer games industry it is easier to create a startup resulting in many successful companies the console games industry is a more closed one and a game developer must have up to three licenses from the console manufacturer a license to develop games for the console the publisher must have a license to publish games for the console a separate license for each game in addition the developer must usually buy development systems from the console manufacturer in order to even develop a game for consideration as well as obtain concept approval for the game from the console manufacturer therefore the developer normally has to have a publishing deal in place before starting development on a game project but in order to secure a publishing deal the developer must have a track record of console development something which few startups will have alternatives an alternative method for publishing video games is to selfpublish using the shareware or open source model over the internet gaming conventions gaming conventions are an important showcase of the industry the major annual gaming conventions include gamescom in cologne germany the e3 in los angeles usa the penny arcade expo and others regional distribution see also regional lockout video games this section needs expansion you can help by adding to it june 2018 as with other forms of media video games have often been released in different world regions at different times international practices world trends international video game revenue is estimated to be 815b in 2014 the largest nations by estimated video game revenues in 2016 are china 244b the united states 235b and japan 124b conventions see also categoryvideo game trade shows the gamescom in cologne the major gaming fair by attendance gaming conventions are an important showcase of the industry the annual gamescom in cologne germany is a major expo for video games the e3 in los angeles usa is also of global importance but is an event for industry insiders only other notable conventions and trade fairs include tokyo game show japan brasil game show brazil eb games expo australia kri russia chinajoy china and the annual game developers conference some publishers developers and technology producers also have their own regular conventions with blizzcon quakecon nvision and the x shows being prominent examples africa video gaming is still in its infancy throughout the african continent but due to the continents young population and increasing technological literacy the sector is growing rapidly african countries such as south africa nigeria and kenya have been making rapid advances in mobile game development both within their country and internationally canada ubisoft montreal video gaming in canada canada has the third largest video game industry in terms of employment numbers china video gaming in china tencent is the largest company in the world by video game revenue china is the largest country by game revenue germany the gamescom in cologne is the worlds leading game trade fair video gaming in germany germany has the largest video games market in europe with revenues of 41billion forecast for 2017 the annual gamescom in cologne is europes largest gaming expo one of the earliest internationally successful video game companies was gterslohbased rainbow arts founded in 1984 who were responsible for publishing the popular turrican series of games the anno series and the settlers series are globally popular strategy game franchises since the 1990s the gothic series spellforce and risen are established rpg franchises the x series by egosoft is the bestselling space simulation the fifa manager series was also developed in germany the german action game spec ops the line 2012 was successful in the markets and received largely positive reviews one of the most famed titles to come out of germany is far cry 2004 by frankfurtbased crytek who also produced the topseller crysis and its sequels later other wellknown current and former developers from germany include ascaron blue byte deck13 phenomic piranha bytes radon related spellbound and yager development publishers include deep silver koch media dtp entertainment kalypso and nintendo europe bigpoint games gameforge goodgame studios and wooga are among the worlds leading browser game and social network game developersdistributors japan video gaming in japan headquarters of nintendo in kyoto japan 2006 the japanese video game industry is markedly different from the industry in north america europe and australia japanese companies have created some of the largest and most lucrative titles ever made such as the mario final fantasy metal gear pokmon and resident evil series of games in recent years consoles and arcade games have both been overtaken by downloadable freetoplay games on the pc and mobile platforms united kingdom video gaming in the united kingdom the uk industry is the third largest in the world in terms of developer success and sales of hardware and software by country alone but fourth behind canada in terms of people employed the country is home to some of the worlds most successful video game franchises such as tomb raider grand theft auto fable colin mcrae dirt and total war the country also went without tax relief until march 21 2012 united states video gaming in the united states activision now activision blizzard is the first independentthirdparty video game developer sony interactive entertainment runs the playstation brand ralph baer receiving the national medal of technology and innovation the united states has the largest video games presence in the world in terms of total industry employees history magnavox is credited for releasing the first video game console the odyssey activision was the first developer to create independentthirdparty video games once the fastestgrowing american company atari crashed in spectacular fashion resulting in the north american video game crash of 1983 this resulted in the domination of the japanese video game industry worldwide throughout the 1980s and 1990s companies the us is home to major game development companies such as activision blizzard call of duty world of warcraft electronic arts fifa battlefield mass effect and taketwo interactive civilization nba 2k series grand theft auto zenimax media doom fallout the elder scrolls is the worlds largest privately held video game company niantic ingress pokmon go is a notable mobile game developer valve corporation operates steam the largest computer gaming platform with an active user base 125 million that rivals the combined user bases of the current console generation 150 million intel and nvidia are the largest makers of pc graphics chips advanced micro devices has become the most important console processor vendor with all three of the eighth generation home consoles using amd gpus and two of them use amd cpus microsoft nintendo and sony were not aware that they were all using amd processors until all their consoles were announced underscoring the secrecy found within the game industry notable game engine developers include epic games unreal engine and unity technologies unity regions the west coast is home to important video game conventions such as electronic entertainment expo e3 one of the largest video game industryonly events in the world and penny arcade expo pax west the largest public video game convention in north america the west coast is also home to many of the major american video game industry companies particularly the regions of los angeles san francisco bay area and seattle major game development regions outside of the west coast include the northeast and texas people over 150 million americans play video games with an average age of 35 and a gender breakdown of 59 percent male and 41 percent female several important game development personalities were born in or moved to the united states notable developers include ralph h baer magnavox odyssey the father of video games jonathan blow braid john d carmack doom quake and alexey pajitnov tetris mario is named after mario segale a former landlord of nintendo of america some rightwing and leftwing activists including jack thompson and anita sarkeesian have met extreme resistance from the gaming public in response to the perceived politicizing of their art form sports the united states recognizes esports players as professional athletes trends players become fourthparty developers allowing for more open source models of game design development and engineering players also create modifications mods which in some cases become just as popular as the original game for which they were created an example of this is the game counterstrike which began as a mod of the video game halflife and eventually became a very successful published game in its own right while this community of modifiers may only add up to approximately 1 of a particular games user base the number of those involved will grow as more games offer modifying opportunities such as by releasing source code and the video user base swells according to ben sawyer as many as 600000 established online game community developers existed as of 2012 this effectively added a new component to the game industry value chain and if it continues to mature it will integrate itself into the overall industry the industry has seen a shift towards games with multiplayer facilities a larger percentage of games on all types of platforms include some type of competitive online multiplayer capability in addition the industry is experiencing further significant change driven by convergence with technology and player comfort being the two primary reasons for this wave of industry convergence video games and related content can now be accessed and played on a variety of media including cable television dedicated consoles handheld devices and smartphones through social networking sites or through an isp through a game developers website and online through a game console andor home or office personal computer in fact 12 of us households already make regular use of game consoles for accessing video content provided by online services such as hulu and netflix in 2012 for the first time entertainment usage passed multiplayer game usage on xbox meaning that users spent more time with online video and music services and applications than playing multiplayer games this rapid type of industry convergence has caused the distinction between video game console and personal computers to disappear a game console with highspeed microprocessors attached to a television set is for all intents and purposes a computer and monitor as this distinction has been diminished players willingness to play and access content on different platforms has increased the growing video gamer demographic accounts for this trend as former president of the entertainment software association douglas lowenstein explained at the 10th e3 expo looking ahead a child born in 1995 e3s inaugural year will be 19 years old in 2014 and according to census bureau data by the year 2020 there will be 174 million americans between the ages of 5 and 44 thats 174 million americans who will have grown up with playstations xboxes and gamecubes from their early childhood and teenage yearswhat this means is that the average gamer will be both older and given their lifetime familiarity with playing interactive games more sophisticated and discriminating about the games they play evidence of the increasing player willingness to play video games across a variety of media and different platforms can be seen in the rise of casual gaming on smartphones tablets and social networking sites as 92 of all smartphone and tablet owners play games at least once a week 45 play daily and industry estimates predict that by 2016 onethird of all global mobile gaming revenue will come from tablets alone apples app store alone has more than 90000 game apps a growth of 1400 since it went online in addition game revenues for ios and android mobile devices now exceed those of both nintendo and sony handheld gaming systems combined index of gaming articles list of video games mwparseroutput refbeginfontsize90marginbottom05emmwparseroutput refbeginhangingindentsulliststyletypenonemarginleft0mwparseroutput refbeginhangingindentsullimwparseroutput refbeginhangingindentsdlddmarginleft0paddingleft32emtextindent32emliststylenonemwparseroutput refbegin100fontsize100 leone matt july 17 2017 what it costs to run an independent video game store polygon retrieved july 17 2017 look up video game industry in wiktionary the free dictionary compgamesdevelopmentindustry google groups international game developers association playing the game the economics of the computer game industry cambridge university press sloperama game biz advice tom sloper vtemajor industries heavy light primary industry agriculture flowers horticulture coffee meat fishing forestry mining petroleum oil shale secondary industry manufacturing aerospace arms automotive shipbuilding chemical plastics meat packing textile tertiary 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