THE BUSINESS OF VIDEO GAMES
AS a younger person, you were probably told not to get addicted with video games. What if I told you that the video game industry was valued at $99.6 billion as of 2016? It probably doesn’t come as a surprise to hear that it’s just that lucrative, especially given the rise of mobile gaming.
Last year alone, mobile games took a huge lead from PC and console gaming, generating -
The economics
simple, and could be worked on by a single programmer, or a small team of programmers and artists. This made the industry easier to break into at the time, with new releases coming out every few months.
Due to the relatively low cost to develop titles for systems at the time, developers like Sierra Entertainment or Activision were perfectly comfortable offering including royalties. It was this generosity and market saturation that would lead to
Your little Family Computer/Nintendo Entertainment System back when you were a child and was instrumental in reviving the industry as a whole through the effects of the crash in as a primary contender in the console arena.
Today, it takes a larger development team method of marketing the game beyond ads in magazines and word-of-mouth. Given that
the current generation of gaming many developers are choosing to allocate resources in their development, instead of focusing on many different titles. This has resulted in less high-budget, high-quality titles, or in games that take years to develop— the most current offender in that being SquareEnix’s Final Fantasy XV.
Impacting the economy
You’ve probably walked into a mall and wandered toward video game retail stores on certain days, only to spot a line of men, women and children in line for the latest title released that day. Releases of highly anticipated games or consoles on the economy, one such incidence being the release of Final Fantasy XV. On its release in December 2016, the its physical copies in Japan, according to Media Create.
Forbes also reported that the game release in Western markets, making it the fastest selling title in the history of the Final Fantasy franchise.
Sales from titles like these, or can take in revenues above the case of Black Ops, the total take
The widely anticipated Nintendo Switch is also set to make a splash, though a report from the Financial Times states that the company’s conservative ship target of 2 million units might hurt the company more than a higher target would.
In a more competitive setting, several brands and personalities have recognized the value of competitive gaming leagues and are rushing to sponsor them, effectively turning the team and the game by extension, into a marketing tool.
Yearly conventions to showcase video games also affect the local economy, with accommodations, venues, and other establishments the sheer volume of people who attend such events.
Final thoughts
As a business worth millions across the world, it shouldn’t be a surprise that you hear people talking about considering breaking into the industry, although it is more likely that it’s about making a game that they feel is worth their effort than the the creators of some of the longestrunning game franchises didn’t think they would someday be at the forefront of the industry, being raised to become the standard for all other titles to come.