Video game industry
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The '''video game industry''' (formally referred to as '''[[interactive entertainment]]''') is the [[economics|economic]] sector involved with the [[video game developer|development]], [[marketing]] and sale of [[video game|video]] and [[Personal computer game|computer game]]s. It encompasses dozens of job disciplines and employs thousands of people worldwide.
==Overview==
Once a niche market and considered by some as a curiosity in the mid-1970s, the computer and video game industry took in about [[United States dollar|USD$]]9.5 billion in the US in 2007 ([[Entertainment Software Association|ESA]] annual report).
The modern [[personal computer|computing]] world owes many modern computing innovations to the game industry. The following computing elements owe their lineage and development to the game industry:
* [[Sound card]]s: developed for addition of digital-quality sound to games. Later improved for music and audiophiles.
* [[Graphics card]]s and [[3D graphic accelerator]]s: were developed for [[graphical user interface]]s (GUIs) and games. GUIs drove the need for high resolution, games drove 3D acceleration. They also gave one the opportunity to use multiple graphics cards in one computer (such as with [[Scan Line Interleave|SLI]] or [[ATI CrossFire|CrossFire]] graphics cards).
* [[CD ROM]] drives: were developed for mass distribution of media in general, however games use is probably instrumental in driving their ever higher speeds.
* [[Unix]]: developed, in part, so that the [[programmer]]s could play a space traveling game.<ref>[http://www.faqs.org/docs/artu/ch02s01.html#genesis Origins and History of Unix, 1969-1995] in [[The Art of Unix Programming]]</ref><ref>[http://www.informationweek.com/shared/printableArticle.jhtml?articleID=191901844 "What's The Greatest Software Ever Written?"] ''[[Information Week]]'' article by [[Charles Babcock]]</ref>
In addition, many of the higher powered [[IBM PC compatible|personal computers]] are purchased by [[gamer]]s who want the fastest equipment to power the latest cutting-edge games. Modern games are among the most demanding of applications on PC resources, so the latest hardware is often targeted at this sector likely to purchase and make use of the latest features. Thus, the inertia of [[Central processing unit|CPU]] development is due in part to this industry whose [[software|applications]] demand faster processors than traditional applications.
==Disciplines==
The game industry employs those experienced in other traditional businesses, but some have experience tailored to the game industry. For example, many [[recruiter]]s target just game industry professionals. Some of the disciplines specific to the game industry include:
* [[Game programmer]]
* [[Game designer]]
* [[Level designer]]
* [[Game producer]]
* [[Game artist]]
* [[Game tester]]
Most of these professionals are employed by [[video game developer]]s or [[video game publisher]]s. However, many [[hobby]]ists also produce computer games and sell them commercially.
==History==
[[William Higinbotham]], a scientist, created "[[Tennis For Two]]" in 1958. It was never commercially released because it wasn't an actual video game. It was meant to be an electrical experiment.
By the late 1970s, the computer game industry formed from a hobby culture, when personal computers just began to become widely available. The industry grew along with the advancement of computing technology, and often drove that advancement. Today, the video game industry is a juggernaut of development; profit still drives technological advancement which is then used by other industry sectors. Though maturing, the video game industry is still very volatile, with third-party video game developers quickly cropping up and, just as quickly, going out of business.
In Asian countries, notably [[Japan]] and [[Hong Kong]], the video game medium did not reach major popularity on a mass scale until the arrival of the [[manga]] series [[Game Center Arashi]] in the late 70s.{{Fact|date=February 2007}} The series helped the public understand the possibility of the product and the entertainment value at the cultural level.
==Economics==
The video game industry is currently facing financial strains{{Fact|date=February 2007}} as it attempts to fairly compensate its talent, while continuing to turn a profit. The result is that the game developer—the traditional source of new games—is essentially dying out or is being incorporated into large publishers.{{Fact|date=February 2007}} The game industry is currently experiencing a phase of consolidation and vertical integration as a reaction to spiraling costs.{{Fact|date=February 2007}}This climate has also given birth to vibrant [[List of indie game developers|indie game developers]] comprising tiny companies trying to use the internet rather than traditional retail channels to reach an audience.
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 several titles each 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 ever increasing graphical and programming complexities. Now budgets can easily reach millions of dollars, even if [[Game engine#Middleware|middleware]] and pre-built [[game engine]]s are used. Most professional games require one to three years to develop, further increasing the strain on budgets.
Some developers are turning to alternative production and distribution methods, such as [[online distribution]], to reduce costs.
Today, the video game industry has a major impact on the economy through the sales of major systems and games such as, ''[[Grand Theft Auto IV]]'', which took in over [[United States dollar|USD]]$500 million in sales during its opening week.<ref>[http://kotaku.com/5008102/take+two-confirms-gtas-half-a-billion-week "Take-Two Confirms GTA's Half a Billion Week"]''[[Kotaku]]'', 2008-05-07. Retrieved on 2008-05-07.</ref> The game's income was more than the opening weekend of ''[[Spider-Man 3]]'' and the original title holder for a video game ''[[Halo 3]]''.<ref>[http://kotaku.com/380205/variety-gtaiv-launch-bigger-than-halo-3-and-then-some "Variety: GTA IV Launch Bigger Than Halo 3 (And Then Some)"]
''[[Kotaku]]'', 2008-04-15. Retrieved on 2008-04-15.</ref> Many individuals have also benefited from the economic success of video games including the former chairman of [[Nintendo]] and Japan's richest man: [[Hiroshi Yamauchi]].<ref>[http://www.forbes.com/business/2008/05/07/japan-wealth-technology-cz-km-japanrichest08_0507intro.html "Japan's Richest Man Is...Yes, Hiroshi Yamauchi] ''[[Forbes]]'', 2008-05-07. Retrieved on 2008-05-07.</ref>
==Practices==
Video game industry practices are similar to those of other entertainment industries (e.g. the [[recording industry|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 [[video game publisher|publishers]], who fund the [[video game developer|developers]], much more important than in the music industry.
===Breakaways===
A particularly famous case is the "original" independent developer [[Activision]], founded by former [[Atari]] developers. Activision grew to become the world's second largest game publisher.{{Fact|date=February 2007}} In the mean time, many of the original developers left to work on other projects. For example, founder [[Alan Miller (game designer)|Alan Miller]] left Activision to start another video game development company, [[Accolade (video game publisher)|Accolade]] (now [[Atari]] née [[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 mid-80s, many developers faced the more distressing problem of working with fly-by-night or unscrupulous publishers that would either fold unexpectedly or run off with the game profits.
===Economics===
Economic problems remain today with regard to publisher-developer contracts (see [[copyright#Transfer of rights|copyright: transfer of rights]]). Typically, developers receive a royalty of around 20% of the sales profits, and the rest goes to the publisher.{{Fact|date=February 2007}} Rather than dividing royalties, many publishers buy the development studio outright. Some developers begrudge the tendency for the studio's original management to leave in the wake of a buyout, while the remaining employees try to finish the project only to be shut down after a few years. These buyouts often result in a big push to finish video game projects in time for the holiday purchasing season, and transfer of creative control to the publisher.
===Creative control===
Some people disapprove of publishers having creative control since they are more apt to follow short-term 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' Coalition|recording artists]] and [[RIAA|record labels]] in many ways. But unlike the [[music industry]], which has seen flat or declining sales in the early 2000s{{Fact|date=June 2008}}, the video game industry continues to grow.{{Fact|date=October 2007}} 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 game]]s industry, it is easier to create a startup, resulting in many successful companies. The [[video game console|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 self-publish using the [[shareware]] or [[open source]] model over the [[Internet]]. However, it remains to be seen whether freely made and distributed games can survive in the era of multi-million dollar productions.
===Japanese video game industry practices===
The [[Japan]]ese video game industry is markedly different from the industry in the [[United States|US]] and [[Europe]].
Generally, games occupy greater cultural attention in Japan than the U.S., and its [[market share]] of total entertainment in Japan is higher than the U.S. Japan has created some of the largest and most expensive titles ever made, such as ''[[Shenmue]]'', ''[[Final Fantasy]]'' and the ''[[Metal Gear Solid]]'' series of games.
====Arcades====
[[Video arcade|Video game arcades]] are still relatively popular in Japan; for every [[arcade game]] released in the US, nine are released in Japan.{{Fact|date=February 2007}} The history of the Japanese arcade is very significant in the story of the decline of the American arcade, and in the shape of [[game design]] in general. In particular, the arcade scene in Japan has caused them to lag behind in the field of [[sound effect]]s and [[sound design]], because this is less important in an arcade. For example, a modern game like ''[[Tekken 4]]'' still uses 16 kHz samples like the original arcade release.
====Media====
[[video game console|Consoles]] and arcade games are the main media for Japanese game design; [[IBM PC compatible|PC]] games are nowhere near as popular. This necessarily dictates that there are fewer independently developed games coming from Japan, as it is much harder to develop independently for a console than it is for a PC.
====Development environment====
The structure and culture of a Japanese game developer is different from a western one. Throughout the history of Japanese game design, many developers have seen fit to remain mostly anonymous, even using pseudonyms to a large degree in video game credits.
Also, the division in labor for video game development is different. For example, Japanese game design teams had a dedicated [[game designer|designer]] (which they called a "director") much earlier than American design teams adopted the practice.
Secondly, Japanese game designers throughout history generally had far more people working on a particular game than a comparable western design team. For example, ''[[Street Fighter 2]]'' (1991), a Japanese title, had almost one artist working on every character in the game, plus two programmers and a musician, with the result being a team of twenty or more people. ''[[Mortal Kombat (video game)|Mortal Kombat]]'' (1992), a comparable American title, was developed by four people: a [[game programmer|programmer]], an [[artist]], a [[musician]], and a background artist.
==See also==
* [[List of gaming topics]]
* ''[[Game Developer (magazine)|Game Developer]]'' magazine
==References==
<!--See http://en.wikipedia.org/wiki/Wikipedia:Footnotes for an explanation of how to generate footnotes using the <ref(erences/)> tags-->
{{reflist}}
==External links==
* [http://groups.google.com/groups?hl=en&lr=&ie=UTF-8&group=comp.games.development.industry comp.games.development.industry] ([[Google Groups]])
* [http://www.igda.org/ International Game Developers Association]
*[http://www.fathom.com/course/21701761/index.html Playing the Game: The Economics of the Computer Game Industry] ([[Cambridge University Press]])
* [http://www.sloperama.com/advice.html Sloperama: Game Biz Advice] ([[Tom Sloper]])
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[[Category:Video game industry| Computer and video game industry]]
[[Category:Industries]]
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[[pl:Przemysł gier komputerowych]]