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109-528: Game Freak Inc. is a Japanese video game developer , best known as the primary developer of the Pokémon series of role-playing video games , and as one of the co-owners of the Pokémon series. Predating the video game company, Game Freak was a self-published video game magazine created by Satoshi Tajiri and Ken Sugimori in the 1980s. The first issue was published in 1983 by Tajiri. Sugimori would join

218-593: A database , Voice over IP , or add-in interface software; this is also known as middleware . Examples of this include SpeedTree and Havoc . Independents are software developers which are not owned by (or dependent on) a single publisher. Some of these developers self-publish their games, relying on the Internet and word of mouth for publicity. Without the large marketing budgets of mainstream publishers, their products may receive less recognition than those of larger publishers such as Sony, Microsoft or Nintendo. With

327-452: A culture of "toxic geek masculinity" within the workplace. In addition, the conditions behind crunch time are far more discriminating towards women as this requires them to commit time exclusively to the company or to more personal activities like raising a family. These factors established conditions within some larger development studios where female developers have found themselves discriminated in workplace hiring and promotion, as well as

436-435: A developer using the services of a graphics design package from a different firm, the total number of employees involved in the video game industry rises above 220,000. Traditionally, the video game industry has had six connected layers in its value chain based on the retail distribution of games: As games have transitioned from the retail to more digital market, parts of this value chain have become redundant. For example,

545-571: A first-party company. As a balance to not being able to release their game for other platforms, second-party developers are usually offered higher royalty rates than third-party developers. These studios may have exclusive publishing agreements (or other business relationships) with the platform holder, but maintain independence so that upon completion or termination of their contracts, they are able to continue developing games for other publishers if they choose to. For example, while HAL Laboratory initially began developing games on personal computers like

654-402: A five-day global record for a movie, book or video game. The game's income was more than the opening weekend of Spider-Man 3 and the previous title holder for a video game Halo 3 . Many individuals have also benefited from the economic success of video games including the former chairman of Nintendo and Japan's third richest man: Hiroshi Yamauchi . By 2014, the global video game market

763-410: A fixed period and generally work similar hours as full-time staff members, assisting across all areas of video game development, but as contractors, do not get any benefits such as paid time-off or health care from the employer; they also are typically not credited on games that they work on for this reason. The practice itself is legal and common in other engineering and technology areas, and generally it

872-403: A game on schedule. The complexity of workflow, reliance on third-party deliverables, and the intangibles of artistic and aesthetic demands in video game creation create difficulty in predicting milestones. The use of crunch time is also seen to be exploitative of the younger male-dominated workforce in video games, who have not had the time to establish a family and who were eager to advance within

981-406: A game's profits. Current examples of first-party studios include PlayStation Studios for Sony, and Xbox Game Studios for Microsoft Gaming . Second-party developer is a colloquial term often used by gaming enthusiasts and media to describe game studios that take development contracts from platform holders and develop games exclusive to that platform, i.e. a non-owned developer making games for

1090-479: A mobile development company. The company was subsequently merged into Game Freak on December 1, 2015. In May 2019, Game Freak director Masayuki Onoue revealed that Game Freak is increasingly prioritizing original game creation, in order to grow the experience of its staff. The company's Gear Project initiative, which encourages creators to pitch original game ideas during quiet periods, has so far resulted in original games HarmoKnight , Pocket Card Jockey , Tembo

1199-437: A position in a medium to large video game company. An experienced game-development employee, depending on their expertise and experience, averaged roughly $ 73,000 in 2007. Indie game developers may only earn between $ 10,000 and $ 50,000 a year depending on how financially successful their titles are. In addition to being part of the software industry, game development is also within the entertainment industry; most sectors of

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1308-671: A professional European video game industry also began taking shape with companies such as Ocean Software and Gremlin Interactive . In 1987, Nintendo lost a legal challenge against Blockbuster Entertainment , which continued game rentals in the same way as movies. In 1989, the Game Boy handheld system was launched. Video games transitioned from having been showcased at general trade shows like Consumer Electronics Show , to dedicated shows like Nintendo Space World and Electronic Entertainment Expo . Game related technology advances of

1417-508: A revenue of $ 2 billion (equivalent to $ 6.31 billion in 2023) in quarters . Space Invaders was soon licensed for the Atari VCS (later known as Atari 2600), becoming the first " killer app " and quadrupling the console's sales. The success of the Atari 2600 in turn revived the home video game market during the second generation of consoles, until the video game crash of 1983 . By

1526-649: A roundtable discussion with the International Game Developers Association (IGDA), the professional association for developers. Statements made by the IGDA's current executive director Jen MacLean relating to IGDA's activities had been seen by as anti-union, and Game Workers Unite desired to start a conversation to lay out the need for developers to unionize. In the wake of the sudden near-closure of Telltale Games in September 2018,

1635-407: A single publisher; one canceled game may devastate a small developer. Because of this, many small development companies are short-lived. A common exit strategy for a successful video game developer is to sell the company to a publisher, becoming an in-house developer. In-house development teams tend to have more freedom in game design and content than third-party developers. One reason is that since

1744-403: A strong STEM (science, technology, engineering, and mathematics) background for women at the secondary education level, but there are issues with tertiary education such as at colleges and universities, where game development programs tend to reflect the male-dominated demographics of the industry, a factor that may lead women with strong STEM backgrounds to choose other career goals. There

1853-473: A traditional publishers, and some of these grew substantially. Spurred by some initial events in the late 2000s, eSports centered around professional players in organized competitions and leagues for prize money, grew greatly over this decade, drawing hundreds of millions of viewers and reaching nearly $ 500 million in revenue by 2016 and expected to break $ 1 billion by 2019. The next generations of Xbox Series X/S and PlayStation 5 were planned for 2020, but

1962-697: A unique case where nearly all parts of its labor force, including white-collar jobs such as video game development, may engage with labor unions under the Employment Protection Act often through collective bargaining agreements. Developer DICE had reached its union agreements in 2004. Paradox Interactive became one of the first major publishers to support unionization efforts in June 2020 with its own agreements to cover its Swedish employees within two labor unions Unionen and SACO . In Australia, video game developers could join other unions, but

2071-632: A year, collected more than $ 1 billion in quarters; in total, Pac-Man is estimated to have grossed over 10 billion quarters ($ 2.5 billion) during the 20th century. In the early 1980s, 8-bit home computing and home-made games boomed. This was especially in Europe (with the ZX Spectrum and Commodore 64 ) and in Asia (with the NEC PC-88 and MSX ). Video game journalism arose at that time, which

2180-482: Is also a significant gap in racial minorities within the video game industry; a 2019 IGDA survey found only 2% of developers considered themselves to be of African descent and 7% Hispanic, while 81% were Caucasian; in contrast, 2018 estimates from the United States Census estimate the U.S. population to be 13% of African descent and 18% Hispanic. In a 2014 and 2015 survey of job positions and salaries,

2289-431: Is easier to create a startup, resulting in many successful companies. The console industry is more closed, and a game developer must have up to three licenses from the console manufacturer : 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,

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2398-449: Is expected that this is meant to lead into a full-time position, or otherwise the end of the contract. But more recently, its use in the video game industry has been compared to Microsoft 's past use of " permatemp ", contract workers that were continually renewed and treated for all purposes as employees but received no benefits. While Microsoft has waned from the practice, the video game industry has adapted it more frequently. Around 10% of

2507-533: Is generally illegal, companies often target their oldest workers first during layoffs or other periods of reduction. Older developers with experience may find themselves too qualified for the types of positions that other game development companies seek given the salaries and compensations offered. Some of the larger video game developers and publishers have also engaged contract workers through agencies to help add manpower in game development in part to alleviate crunch time from employees. Contractors are brought on for

2616-494: Is still their primary activity they are generally described as "publishers" rather than "developers". Developers may be private as well. In the video game industry , a first-party developer is part of a company that manufactures a video game console and develops mainly for it. First-party developers may use the name of the company itself (such as Nintendo ), have a specific division name (such as Sony's Polyphony Digital ) or have been an independent studio before being acquired by

2725-453: Is the "original" independent developer Activision , founded by former Atari developers. Activision grew to become the world's second largest game publisher. In the meantime, 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 née Infogrames ). Activision was popular among developers for giving them credit in

2834-474: Is usually conducted in a casual business environment, with t-shirts and sandals as common work attire. Many workers find this type of environment rewarding and pleasant professionally and personally. However, the industry also requires long working hours from its employees (sometimes to an extent seen as unsustainable). Employee burnout is not uncommon. An entry-level programmer can make, on average, over $ 66,000 annually only if they are successful in obtaining

2943-520: The 2021–2022 cryptocurrency crash , computer parts such as GPUs have become more affordable as of August 2022. Early 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 games per year. Thus, publishers could often be generous with benefits, such as royalties on

3052-659: The AFL–CIO writing an open letter to video game developers encouraging them to unionize. In January 2020, Game Workers Unite and the Communications Workers of America established a new campaign to push for unionization of video game developers, the Campaign to Organize Digital Employees (CODE), in January 2020. Initial efforts for CODE were aimed to determine what approach to unionization would be best suited for

3161-680: The ESA annual report. Research from Ampere Analysis indicated three points: the sector has consistently grown since at least 2015 and expanded 26% from 2019 to 2021 , to a record $ 191 billion ; the global games and services market is forecast to shrink 1.2% annually to $ 188 billion in 2022; the industry is not recession -proof. The industry has influenced the technological advancement of personal computers through sound cards , graphics cards and 3D graphic accelerators , CPUs , and co-processors like PhysX . Sound cards, for example, were originally developed for games and then improved for adoptation by

3270-456: The International Game Developers Association (IGDA), are conducting increasing discussions about the problem; they are concerned that working conditions in the industry cause a significant deterioration in employees' quality of life. Some video game developers and publishers have been accused of the excessive invocation of "crunch time". "Crunch time" is the point at which the team is thought to be failing to achieve milestones needed to launch

3379-516: The MSX , they became one of the earliest second-party developers for Nintendo, developing exclusively for Nintendo's consoles starting with the Famicom, though they would self-publish their mobile games. A third-party developer may also publish games, or work for a video game publisher to develop a title. Both publisher and developer have considerable input in the game's design and content. However,

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3488-528: The Me Too movement and have tried to address the symptoms of these problems industry-wide, the video game industry has yet to have its Me Too-moment, even as late as 2021. There also tends to be pay-related discrimination against women in the industry. According to Gamasutra 's Game Developer Salary Survey 2014, women in the United States made 86 cents for every dollar men made. Game designing women had

3597-504: The Screen Actors Guild‐American Federation of Television and Radio Artists (SAG-AFTRA) union doing work for video games struck several major publishers, demanding better royalty payments and provisions related to the safety of their vocal performances, when their union's standard contract was up for renewal. The voice actor strike lasted for over 300 days into 2017 before a new deal was made between SAG-AFTRA and

3706-521: The development , marketing , distribution , monetization , and consumer feedback of video games . The industry encompasses dozens of job disciplines and thousands of jobs worldwide. The video game industry has grown from niche to mainstream. As of July 2018 , video games generated US$ 134.9 billion annually in global sales. In the US, the industry earned about $ 9.5 billion in 2007, $ 11.7 billion in 2008, and US$ 25.1 billion in 2010, according to

3815-400: The modding communities. 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 publicly available interactive computer-based game machines used or other mechanisms to mimic a display; while technically not "video games", they had elements of interactivity between

3924-537: The music industry . In 2017 in the United States, which represented about a third of the global video game market, the Entertainment Software Association estimated that there were over 2,300 development companies and over 525 publishing companies, including in hardware and software manufacturing, service providers, and distributors. These companies in total have nearly 66,000 direct employees. When including indirect employment, such as

4033-412: 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

4142-506: The video game industry . He told the Los Angeles Times : "Someone who was part of the co-creation of that world and those characters isn't getting a credit or a nickel for the work they put into it. Maybe we need unions in the video game industry to be able to protect creators." Video game industry The video game industry is the tertiary and quaternary sectors of the entertainment industry that specialize in

4251-559: 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 easy-to-program languages like BASIC for mainframes allowed for more simplistic games to be developed. The arcade video game industry grew out of

4360-402: The 1951 Festival of Britain . The development of cathode-ray tube , the core technology inside televisions, created 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

4469-402: The 1990s include these: Aside from technology, in the early part of the decade, licensed games became more popular, as did video game sequels. The arcades experienced a renaissance in the early 1990s following the release of Street Fighter II (1991), which led to a number of other popular fighting games such as Fatal Fury (1991) and Mortal Kombat (1992). The arcade resurgence

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4578-572: The Australian retailer Game would purchase twice the games per year as non-trade-in customers. The sale of pre-owned games kept retailers in business, and composed about a third of Game's revenue. Retailers also saved on the UK's value-added tax, which only taxed the retailer's profit on pre-owned games, rather than the full sale on regular games. The former trade-in retail executives behind the trade-in price comparison site Trade In Detectives estimated that

4687-677: The Badass Elephant and Giga Wrecker . In February 2020, Game Freak relocated their headquarters to Kanda Square, an office building in Nishikichō shared with Nintendo's Tokyo branch. In October 2024, nearly a terabyte of data from Game Freak's servers was stolen. Development builds , source code , and test sprites either planned or released for past Pokémon games were found, as well as code names for upcoming Pokémon games, and prototypes of unreleased remakes of Quinty and Yoshi . Shortly afterwards, Game Freak addressed

4796-446: The IGDA found that people of color were both underrepresented in senior management roles as well as underpaid in comparison to white developers. Further, because video game developers typically draw from personal experiences in building game characters, this diversity gap has led to few characters of racial minority to be featured as main characters within video games. Minority developers have also been harassed from external groups due to

4905-511: The United Kingdom's trade-in industry was about a third of the size of its new games business. They figured that sites such as eBay , which convert used games into cash, compose about a quarter of the UK's trade-in market, but do not keep the credit within the industry. While consumers might appear to receive better offers on these sites, they also take about 15 percent of the selling price in fees. Alternatively, some retailers will match

5014-556: The United States alone, in 1994, arcades generated $ 7 billion in quarters while home console game sales generated $ 6 billion Combined, this was nearly two and a half times the $ 5 billion revenue generated by movies in the United States at the time. In 2000s, the video game industry was in heavy development; profit still drove technological advancement used by other industry sectors. Technologies such as Smartphones , virtual reality , and augmented reality were major drivers for game hardware and gameplay development. Though maturing,

5123-535: The acquisition of Activision Blizzard , stated it supported these unionization efforts. After this acquisition, the employees of Bethesda Game Studios , part of Zenimax under Microsoft, unionized under the Communications Workers of America (CWA) in July 2024. Over 500 employees within Blizzard Entertainment 's World of Warcraft division also unionized with CWA that same month. Sweden presents

5232-572: The advent of digital distribution of inexpensive games on game consoles, it is now possible for indie game developers to forge agreements with console manufacturers for broad distribution of their games. Other indie game developers create game software for a number of video-game publishers on several gaming platforms. In recent years this model has been in decline; larger publishers, such as Electronic Arts and Activision, increasingly turn to internal studios (usually former independent developers acquired for their development needs). Video game development

5341-417: The arcade video game industry was generating an annual North American revenue of $ 5 billion (equivalent to $ 16.8 billion in 2023). In 1982, the arcade video game industry reached its peak, generating $ 8 billion in quarters, surpassing the annual gross revenue of both pop music ($ 4 billion) and Hollywood films ($ 3 billion) combined. This was also nearly twice as much as the $ 3.8 billion generated by

5450-431: The closest equity, making 96 cents for every dollar men made in the same job, while audio professional women had the largest gap, making 68% of what men in the same position made. Increasing the representation of women in the video game industry required breaking a feedback loop of the apparent lack of female representation in the production of video games and in the content of video games. Efforts have been made to provide

5559-416: The console manufacturer (such as Rare or Naughty Dog ). Whether by purchasing an independent studio or by founding a new team, the acquisition of a first-party developer involves a huge financial investment on the part of the console manufacturer, which is wasted if the developer fails to produce a hit game on time. However, using first-party developers saves the cost of having to make royalty payments on

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5668-622: The console market surpassed arcade video games for the first time around 1997-1998. Arcade systems such as the Sega Model 3 remained more technologically advanced than home systems in the late 1990s, but the gap between arcade and home systems began narrowing in the late 1990s. The video game industry generated worldwide sales of $ 19.8 billion in 1993 (equivalent to $ 41.8 billion in 2023), $ 20.8 billion in 1994 (equivalent to $ 42.8 billion in 2023), and an estimated $ 30 billion in 1998 (equivalent to $ 56.1 billion in 2023). In

5777-508: The console. This established the use of licensing fees as a model for third-party development that persists into the present. The licensing fee approach was further enforced by Nintendo when it decided to allow other third-party developers to make games for the Famicom console, setting a 30% licensing fee that covered game cartridge manufacturing costs and development fees. The 30% licensing fee for third-party developers has also persisted to

5886-432: The cost of development. Traditionally, the video game monetization method is to sell hard copies in retail store. Cheaper production and distribution methods include online distribution . In the 2010s, the video game industry had a major impact on the economy through the sales of major systems and games such as Call of Duty: Black Ops , which had over $ 650 million of sales in the game's first five days and which set

5995-444: The developer if the game is not meeting expectations. When each milestone is completed (and accepted), the publisher pays the developer an advance on royalties . Successful developers may maintain several teams working on different games for different publishers. Generally, however, third-party developers tend to be small, close-knit teams. Third-party game development is a volatile sector, since small developers may depend on income from

6104-441: 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. An alternative method for publishing video games is to self-publish using the shareware or open source model over the Internet . Gaming conventions are an important showcase of

6213-417: The developers are the publisher's employees, their interests align with those of the publisher; the publisher may spend less effort ensuring that the developer's decisions do not enrich the developer at the publisher's expense. Activision in 1979 became the first third-party video game developer. When four Atari, Inc. programmers left the company following its sale to Warner Communications , partially over

6322-429: The distributor may be redundant as a function of either the publisher or the retailer, or even in some cases as the case of indie games , the function of the developer themselves. Ben Sawyer of Digitalmill observes that the development side of the industry is made up of six connected and distinctive layers: The game industry employs those experienced in other traditional businesses, but some have experience tailored to

6431-506: The end of the 1970s, the personal computer game industry began forming from a hobby culture. In the early 1980s, the golden age of video arcade games reached 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, with the arcade video game industry's revenue in North America tripling to $ 2.8 billion in 1980. By 1981,

6540-467: The entertainment industry (such as films and television ) require long working hours and dedication from their employees, such as willingness to relocate and/or required to develop games that do not appeal to their personal taste. The creative rewards of work in the entertainment business attracts labor to the industry, creating a competitive labor market that demands a high level of commitment and performance from employees. Industry communities, such as

6649-633: The first time in twenty years. The industry's 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 trade-in program through which customers trade used games for credit towards new games. The company began to produce its own merchandise and games. In Britain,

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6758-572: The first video game-specific union, Game Workers Unite Australia, was formed in December 2021 under Professionals Australia to become active in 2022. In Canada, in a historic move, video game workers in Edmonton unanimously voted to unionize for the first time in June 2022. In January 2023, after not being credited in The Last of Us HBO adaptation, Bruce Straley called for unionization of

6867-465: 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. Game developers and publishers sometimes employ those with extensive or long-term experience within

6976-553: The games retailer Game revamped its stores so customers would spend time playing games there. It built a gaming arena for events and tournaments. The shift to digital marketplaces, especially for smartphones, led to an influx of inexpensive and disposable games, and lower engagement among gamers who otherwise purchased new games from retail. Customers also shifted away from the tradition of buying games on their first day of release. Publishers often funded trade-in deals to encourage consumers to purchase new games. Trade-in customers at

7085-893: 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 technical and design complexities. The larger teams consist of programmers, artists, game designers, and producers. Their salaries can range anywhere from $ 50,000 to $ 120,000 generating large labor costs for firms producing video games which can often take between one and three years to develop. Modern budgets typically reach millions of dollars and use middleware and pre-built game engines . In addition to growing development costs, marketing budgets have grown dramatically, sometimes two to three times of

7194-404: The gaming industry, while a 2017 IGDA survey found that the female demographic in game development had risen to about 20%. Taking into account that a 2017 ESA survey found 41% of video game players were female, this represented a significant gender gap in game development. The male-dominated industry, most who have grown up playing video games and are part of the video game culture , can create

7303-442: The home video game industry that year; both the arcade and home video game markets combined in 1982 total of $ 11.8 billion (equivalent to $ 37.3 billion in 2023). The arcade video game industry would continue to generate an annual revenue of $ 5 billion in quarters through to 1985. The most successful game of this era was Namco 's Pac-Man , released in 1980, of which more than 350,000 cabinets were eventually sold, and within

7412-979: The incident, stating that the leak was due to "unauthorized access to our servers by a third party", which had taken place in August 2024. They also stated that many employees' personal information had been leaked. Various non-canon Pokémon stories were also discovered. Video game developer A developer may specialize in specific game engines or specific video game consoles , or may develop for several systems (including personal computers and mobile devices ). Some focus on porting games from one system to another, or translating games from one language to another. Less commonly, some do software development work in addition to games. Most video game publishers maintain development studios (such as Electronic Arts 's EA Canada , Square Enix 's studios, Activision 's Radical Entertainment , Nintendo EPD and Sony's Polyphony Digital and Naughty Dog ). However, since publishing

7521-457: The industry by working long hours. Because crunch time tends to come from a combination of corporate practices as well as peer influence, the term "crunch culture" is often used to discuss video game development settings where crunch time may be seen as the norm rather than the exception. The use of crunch time as a workplace standard gained attention first in 2004, when Erin Hoffman exposed

7630-399: The industry was one of the few to actually thrive from a home-bound population using video games to cope. The market had a 20% year-to-year growth from 2019, reaching over $ 179 billion in global revenue in both hardware and software for 2020. Easily learned games with high social interactions were popular, including Animal Crossing: New Horizons , Fall Guys , and Among Us . As

7739-533: The industry. The major annual video game conventions include Gamescom in Cologne (Germany), E3 in Los Angeles (US), Penny Arcade Expo , Summer Games Fest , Tokyo Game Show(TGS) , Brazil Game Show (BGS), and etc. As with other forms of media, video games have often been released in different world regions at different times. The practice has been used where localization is not done in parallel with

7848-405: The introduction of the personal computer, Western Europe also became a major center for video game development. Since then, the industry is primarily led by companies in North America, Europe, and Japan, but other regions, including Australia/New Zealand, and other East Asian countries including China and South Korea, have become significant sectors for the industry. International video game revenue

7957-431: The lack of respect that the new management gave to programmers, they used their knowledge of how Atari VCS game cartridges were programmed to create their own games for the system, founding Activision in 1979 to sell these. Atari took legal action to try to block the sale of these games, but the companies ultimately settled, with Activision agreeing to pay a portion of their sales as a license fee to Atari for developing for

8066-420: The late 1960s, a college student named Nolan Bushnell had a part-time job at an arcade where he became familiar with EM games such as Chicago Coin 's racing game Speedway (1969), watching customers play and helping to maintain the machinery, while learning how it worked and developing his understanding of how the game business operates. In 1971, the first commercial arcade video game , Computer Space ,

8175-408: The magazine at a later date as an illustrator after finding the magazine in a shop and liking it. Tajiri also used "Game Freak" as his pen name when he wrote as a freelance writer to publications such as Family Computer Magazine and Famicom Tsūshin . On April 26, 1989, Tajiri, Sugimori and Junichi Masuda started a video game development company with the same name. One of Game Freak's first games

8284-678: The main driver but significantly impact the industry, such as Spelunky , Fez , Don't Starve , Castle Crashers , and Minecraft , with millions of dollars and users. In the 2010s, the shift increased to casual and mobile gaming , and in 2016, the mobile video game market was estimated at $ 38 billion in revenues, compared to $ 6 billion for the console market and $ 33 billion for personal computing gaming. Virtual reality and augmented reality games arose during this decade. As of 2014, newer game companies arose that vertically integrate live operations and publishing such as crowdfunding and other direct-to-consumer efforts, rather than relying on

8393-507: The market and led to the video game crash of 1977 . The crash eventually came to an end with the success of Taito 's Space Invaders , released in 1978, inspiring the golden age of video arcade games . The game's success prompted the prevalence of arcade machines in mainstream locations such as shopping malls , traditional storefronts, restaurants , and convenience stores during the golden age. More than 360,000 Space Invaders arcade cabinets were sold worldwide, and by 1982, generated

8502-457: The more profitable industries during the COVID-19 pandemic in 2020 and 2021. Video games are seen as a low-cost vice and entertainment for consumers when approaching recession. However, in 2022, atop pandemic economic fallout including chip shortages, supply chain disruption, and consumers preferring outdoor activities, the industry started to indicate recession with global revenues falling for

8611-583: 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 in-game needs or service. Strong server-side security is required for this, to properly distinguish authentic transactions from hacked transactions. On various Internet forums, some gamers have expressed disapproval of publishers having creative control since publishers are more apt to follow short-term market trends rather than invest in risky but potentially lucrative ideas. On

8720-559: The movement again called out for the industry to unionize. The movement argued that Telltale had not given any warning to its 250 employees let go, having hired additional staff as recently as a week prior, and left them without pensions or health-care options; it was further argued that the studio considered this a closure rather than layoffs, as to get around failure to notify required by the Worker Adjustment and Retraining Notification Act of 1988 preceding layoffs. The situation

8829-461: 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. In the video game industry, it is common for developers to leave their current studio and start their own. A particularly famous case

8938-448: The nature of the video game culture. The industry also is recognized to have an ageism issue, discriminating against the hiring and retention of older developers. A 2016 IGDA survey found only 3% of developers were over 50 years old, while at least two-thirds were between 20 and 34; these numbers show a far lower average age compared to the U.S. national average of about 41.9 that same year. While discrimination by age in hiring practices

9047-540: The news, there have typically been followup discussions towards the potential to form a union. A survey performed by the International Game Developers Association in 2014 found that more than half of the 2,200 developers surveyed favored unionization. A similar survey of over 4,000 game developers run by the Game Developers Conference in early 2019 found that 47% of respondents felt the video game industry should unionize. In 2016, voice actors in

9156-408: 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, the video game industry continues to grow. In the computer games industry, it

9265-461: The packaging and title screens for their games, while Atari disallowed this practice. As the video game industry took off in the mid-1980s, 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. The industry claims software piracy to be a big problem, and takes measures to counter this. Digital rights management have proved to be

9374-647: The pandemic wore on from 2020 into 2021, a secondary effect was the impact of the global semiconductor chip shortage on hardware manufacturing. The three major console vendors, Nintendo, Microsoft, and Sony, were impacted by availability of supply of core components, and for the latter two, limited the launch of their new consoles. The chip supply shortage also affected personal computer gamers, coupled with demand for computer parts to be used in cryptocurrency mining , which artificially raised prices and made it difficult to purchase newer components. However, after cryptocurrency mining started paying out less during and following

9483-526: The player and the machine. Some examples of these included the 1940 "Nimatron", an electromagnetic relay-based Nim -playing device designed by Edward Condon and built by Westinghouse Electric for the New York World's Fair , Bertie the Brain , an arcade game of tic-tac-toe , built by Josef Kates for the 1950 Canadian National Exhibition , and Nimrod created by engineering firm Ferranti for

9592-408: The pre-existing arcade game industry, which was previously dominated by electro-mechanical games (EM games). Following the arrival of Sega 's EM game Periscope (1966), the arcade industry was experiencing a "technological renaissance" driven by "audio-visual" EM novelty games, establishing the arcades as a healthy environment for the introduction of commercial video games in the early 1970s. In

9701-694: The present, being a de facto rate used for most digital storefronts for third-party developers to offer their games on the platform. In recent years, larger publishers have acquired several third-party developers. While these development teams are now technically "in-house", they often continue to operate in an autonomous manner (with their own culture and work practices). For example, Activision acquired Raven (1997); Neversoft (1999), which merged with Infinity Ward in 2014; Z-Axis (2001); Treyarch (2001); Luxoflux (2002); Shaba (2002); Infinity Ward (2003) and Vicarious Visions (2005). All these developers continue operating much as they did before acquisition,

9810-414: The primary differences being exclusivity and financial details. Publishers tend to be more forgiving of their own development teams going over budget (or missing deadlines) than third-party developers. A developer may not be the primary entity creating a piece of software, usually providing an external software tool which helps organize (or use) information for the primary software product. Such tools may be

9919-429: The publisher's wishes generally override those of the developer. Work for hire studios solely execute the publishers vision. The business arrangement between the developer and publisher is governed by a contract, which specifies a list of milestones intended to be delivered over a period of time. By updating its milestones, the publisher verifies that work is progressing quickly enough to meet its deadline and can direct

10028-467: The publishers. While this had some effects on a few games within the industry, it brought to the forefront the question of whether video game developers should unionize. A grassroots movement, Game Workers Unite , was established around 2017 to discuss and debate issues related to unionization of game developers. The group came to the forefront during the March 2018 Game Developers Conference by holding

10137-525: The rest of development or where the game must be encoded differently, as in PAL vs. NTSC . It has also been used to provide price discrimination in different markets or to focus limited marketing resources. Developers may also stagger digital releases so as not to overwhelm the servers hosting the game. The video game industry had its primary roots in the United States following the introduction of arcade games and console systems, with Japan soon following. With

10246-430: The same point in the seventh generation-console cycle seven or eight years earlier. By 2018, the United States video game industry had matched that of the United States film industry on basis of revenue, with both having made around US$ 43 billion that year. Since 2000, the video game industry was considered recession -proof, having thrived compared to other industries during the 2008 Great Recession , and as one of

10355-545: The target of sexual harassment. This can be coupled from similar harassment from external groups, such as during the 2014 Gamergate controversy . Major investigations into allegations of sexual harassment and misconduct that went unchecked by management, as well as discrimination by employers, have been brought up against Riot Games , Ubisoft and Activision Blizzard in the late 2010s and early 2020s, alongside smaller studios and individual developers. However, while other entertainment industries have had similar exposure through

10464-484: The toxic nature of the video game culture. This racial diversity issue has similar ties to the gender one, and similar methods to result both have been suggested, such as improving grade school education, developing games that appeal beyond the white, male gamer stereotype, and identifying toxic behavior in both video game workplaces and online communities that perpetuate discrimination against gender and race. In regards to LGBT and other gender or sexual orientations,

10573-460: The trade-in values offered by their competitors. Microsoft's original plan for the Xbox One attempted to translate trade-in deals for the digital marketplace, with a database of product licenses that shops would be able to resell with publisher permission, though the plan was poorly received or poorly sold. Video game industry practices are similar to those of other entertainment industries (e.g.,

10682-487: The use of crunch time at Electronic Arts , a situation known as the "EA Spouses" case. A similar "Rockstar Spouses" case gained further attention in 2010 over working conditions at Rockstar San Diego . Since then, there has generally been negative perception of crunch time from most of the industry as well as from its consumers and other media. Game development had generally been a predominately male workforce. In 1989, according to Variety , women constituted only 3% of

10791-508: The video game industry typically shares the same demographics as with the larger population based on a 2005 IGDA survey. Those in the LGBT community do not find workplace issues with their identity, though work to improve the representation of LGBT themes within video games in the same manner as with racial minorities. However, LGBT developers have also come under the same type of harassment from external groups like women and racial minorities due to

10900-401: The video game industry was affected by the COVID-19 pandemic that had a worldwide impact starting in March 2020 due to forced stay-at-home orders by governmental regulations. There were similar impacts to the video game industry as with other industries, such as cancellation of in-person trade shows, conventions and esports events, and the delay of many games into late 2020, 2021, or beyond, and

11009-475: The video game industry was still very volatile, with third-party video game developers quickly cropping up, and just as quickly, going out of business. Nevertheless, many casual games and indie games became successful, such as Braid and Limbo . Game development for mobile phones (such as iOS and Android devices) and social networking sites emerged. For example, a Facebook game developer, Zynga , raised more than $ 300 million. Indie games are not

11118-678: The video game industry. Whereas some video game employees believe they should follow the craft-based model used by SAG-AFTRA which would unionize based on job function, others feel an industry-wide union, regardless of job position, would be better. Starting in 2021, several smaller game studios in the United States began efforts to unionize. These mostly involved teams doing quality assurance rather than developers. These studios included three QA studios under Blizzard Entertainment : Raven Software , Blizzard Albany , and Proletariat; and Zenimax Media 's QA team. Microsoft , which had previously acquired Zenimax and announced plans to acquire Blizzard via

11227-504: The workforce in video games is estimated to be from contract labor. Similar to other tech industries, video game developers are typically not unionized . This is a result of the industry being driven more by creativity and innovation rather than production, the lack of distinction between management and employees in the white-collar area, and the pace at which the industry moves that makes union actions difficult to plan out. However, when situations related to crunch time become prevalent in

11336-724: Was argued to be "exploitive", as Telltale had been known to force its employees to frequently work under "crunch time" to deliver its games. By the end of 2018, a United Kingdom trade union, Game Workers Unite UK, an affiliate of the Game Workers Unite movement, had been legally established. Following Activision Blizzard 's financial report for the previous quarter in February 2019, the company said that they would be laying off around 775 employees (about 8% of their workforce) despite having record profits for that quarter. Further calls for unionization came from this news, including

11445-455: Was further driven by increasing realism, with the "3D Revolution" from 2D and pseudo-3D graphics to true real-time 3D polygon graphics , following the release of games such as Virtua Racing (1992) and Virtua Fighter (1993). In the late 1990s, there was a transition away from arcades to home systems. Until about 1996-1997, arcade video games represented the largest sector of the global video game industry, before arcades declined and

11554-662: 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 , while

11663-481: Was released. The following year, Atari, Inc. released the first commercially successful video game, Pong , and 19,000 arcade cabinets of the original arcade version were sold. In that year, video games were introduced to the home market with the release of the early video game console , the Magnavox Odyssey . However, both the arcade and home markets would be dominated by Pong clones, which flooded

11772-474: Was the Nintendo Entertainment System action and puzzle game Quinty , which was released in North America as Mendel Palace . Its most popular series, Pokémon —the romanized portmanteau of the Japanese brand Pocket Monsters ( ポケットモンスター , Poketto Monsutā ) —is published and distributed respectively by The Pokémon Company and Nintendo worldwide. In October 2015, Game Freak acquired Koa Games,

11881-414: Was valued at over $ 93 billion. The industry wide adoption of high-definition graphics during the seventh generation of consoles greatly increased development teams' sizes and reduced the number of high-budget, high-quality games under development. In 2013 Richard Hilleman of Electronic Arts estimated that only 25 developers were working on such games for the eighth console generation, compared to 125 at

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