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Industry
The video game industry encompasses the development, marketing, and monetization of video games. The industry encompasses dozens of job disciplines and thousands of jobs worldwide.
The early history of the video game industry, following the first game hardware releases and through 1983, had little structure. Video games quickly took off during the golden age of arcade video games from the late 1970s to early 1980s, but the newfound industry was mainly composed of game developers with little business experience. This led to numerous companies forming simply to create clones of popular games to try to capitalize on the market. Due to loss of publishing control and oversaturation of the market, the North American home video game market crashed in 1983, dropping from revenues of around $3 billion in 1983 to $100 million by 1985. Many of the North American companies created in the prior years closed down. Japan's growing game industry was briefly shocked by this crash but had sufficient longevity to withstand the short-term effects, and Nintendo helped to revitalize the industry with the release of the Nintendo Entertainment System in North America in 1985. Along with it, Nintendo established a number of core industrial practices to prevent unlicensed game development and control game distribution on their platform, methods that continue to be used by console manufacturers today.
According to the market research firm Newzoo, the global video game industry drew estimated revenues of over $159 billion in 2020. Mobile games accounted for the bulk of this, with a 48% share of the market, followed by console games at 28% and personal computer games at 23%.
Sales of different types of games vary widely between countries due to local preferences. Japanese consumers tend to purchase much more handheld games than console games and especially PC games, with a strong preference for games catering to local tastes.[95][96] Another key difference is that, though having declined in the West, arcade games remain an important sector of the Japanese gaming industry. In South Korea, computer games are generally preferred over console games, especially MMORPG games and real-time strategy games. Computer games are also popular in China.
Video games have a large network effect that draw on many different sectors that tie into the larger video game industry. While video game developers are a significant portion of the industry, other key participants in the market include publishers, distributors, retailers, hardware manufacturers, journalists, influencers, Esports leagues, trade and advocacy groups, and gamers.
The industry itself grew out from both the United States and Japan in the 1970s and 1980s before having a larger worldwide contribution. Today, the video game industry is predominantly led by major companies in North America (primarily the United States and Canada), Europe, and southeast Asia including Japan, South Korea, and China. Hardware production remains an area dominated by Asian companies either directly involved in hardware design or part of the production process, but digital distribution and indie game development of the late 2000s has allowed game developers to flourish nearly anywhere and diversify the field.