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The History and Structure of the Video Game Industry – Retail & Disruption (The New Norm) - Part 5

Posted by Dmitri Williams

Feb 14, 2014 6:05:00 AM

Distribution

Distributors is the least sexy sounding part of the vertical chain, but it’s the most important one over the past decade. Everyone hears in school about the massive changes in the music industry or film, where digital destroyed the old way of delivering product. Games have gone through the same phases, and with a lot more grace than the music industry. Traditionally, distributors are responsible for the physical storage and delivery of the product, and usually for the sales effort.

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Topics: Game News, History and Structure of Video Game Industry

The History and Structure of the Video Game Industry – Structure, Development to Publishing - Part 4

Posted by Dmitri Williams

Feb 7, 2014 8:57:00 AM

Don’t be alarmed - there’s nothing complicated about this. Any industry can be thought of in what’s commonly called “vertical stages.”

Simply imagine the series of people a product goes through from its creation until it gets bought.

Now, imagine those steps arrayed from the first step with a designer at the top to the consumer at the bottom. Voila, vertical stages.

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Topics: Game News, History and Structure of Video Game Industry

The History and Structure of the Video Game Industry – Casual & Mobile Boom - Part 3

Posted by Dmitri Williams

Jan 31, 2014 8:11:00 AM


Tanjala Gica / Shutterstock.com

The Casual and Mobile Boom (2010-present)

Casual games are defined by their opposition to “hardcore” games. Where a hardcore game takes commitment and focus and features cutting-edge graphics and complex game mechanics, casual games require no real dedication, feature simple graphics and are often easy to learn and play in a short time (Juul, 2010). Yet despite the moniker, so-called “casual” gaming is the largest, most tectonic force in the history of the medium. It is also a case study in how supply, demand, cultural shifts and new technologies can create an industry almost overnight. First, consider the numbers behind casual gaming. Whereas the target population of “mainstream,” console gaming is males 18-35, casual games target everyone and attract a 60% female audience (Taylor, 2010). Typical console games cost $15-25 million to develop, last about 3 months and reach from 500,000 to four million players. Typical social and casual games cost $250-500 thousand to develop, last about 9 months and reach 10-50 million or more players (Taylor, 2010). One is played for hours, the other minutes. In the U.S. there are about 350 million dedicated game-playing devices, not including cell phones. These are home consoles and portable game players—in other words, the traditional, dedicated game-playing audience. From 2009-2010, there were about 510 million accounts on social and casual games, up from virtually zero two years before. In other words, casual gaming in only two years appeared and rapidly surpassed the 35-year-old mainstream game industry.

Enter the Smartphone

Where did this sudden explosion come from? There are many factors, but the rise and worldwide spread of smart mobile devices has to be at the top of the list. Smart phones now outnumber all other devices and game play is typically one of their primary uses. When you consider the “installed base” of a platform, mobile suddenly wins and disrupts everything.

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Topics: Game News, History and Structure of Video Game Industry

The History and Structure of the Video Game Industry – Modern Era - Part 2

Posted by Dmitri Williams

Jan 24, 2014 12:32:00 PM

Barone Firenze / Shutterstock.com

The Modern Era (2004-2010)

During the first decade of the twenty-first century, the percentage of American adults with access to the Internet increased from 37 in 2000 to 71 in 2010. Fast, broadband connections rose as well, with slower dial-up connections beginning to decline in 2001 (Pew Internet & American Life Project, 2010). Meanwhile, by the end of the decade, video games had become commonplace in the American household, cutting across age and gender demographics. In 2010, estimates had 53 percent of all American adults and 67 percent of American households playing some form of video games (Entertainment Software Association, 2010; Lenhart, Kahne, et al., 2008). And despite the long-held stereotype of the young male gamer, both independent and university research (Griffiths, Davies, & Chappell, 2003; Williams, Yee, & Caplan, 2008; Yee, 2006) found this stereotype not to be true. In fact, according to the Entertainment Software Association (ESA; 2010), women age 18 or older represented more of the game playing population (33%) than boys age 17 or younger (20%).

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Topics: Video Games, History and Structure of Video Game Industry

The History and Structure of the Video Game Industry – Beginnings, Boom & Bust - Part 1

Posted by Dmitri Williams

Jan 17, 2014 4:27:00 PM

This is part-1 of a 5-part series on the history and structure of the video game industry.

Beginnings (1951-1973)

Like many media industries, the home video game industry began with hobbyists and enthusiasts. The first known video game dates back to 1951, when a Cambridge University computer science graduate student named A.S. Douglas created a “naughts and crosses” (more popularly known in America as Tic-Tac-Toe) game. The next, slightly better-known video game, Tennis for Two, was developed in 1958 in a lab by a government nuclear research scientist with the fabulously improbable name of Wally Higginbotham. Higginbotham, tired of
seeing bored visitors at his lab’s open house, decided to create a game of tennis on an oscilloscope screen (Herman 1997). 1Higginbotham never patented the game, and this kept the U.S. government from owning the initial patent for the industry.


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Topics: Video Games, History and Structure of Video Game Industry

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