Will mobile devices, VR and AR fuel expansion?

Executive Summary

The video game industry is growing in size, technological sophistication and social reach. More people are playing, more are playing in groups and the demographics of the business are changing, belying the old image of the typical gamer as a male teenager and often a loner. The industry is spreading beyond entertainment to play a role in employee training, education and health care. The widespread use of mobile phones has increased the reach of gaming, and the development of innovations such as virtual reality and augmented reality create opportunities for expansion.

Here are some key takeaways:

  • Nearly half of the U.S. adult population plays video games, according to a Pew Research Center survey.

  • Consumer spending on games in 2016 exceeded $30 billion, fueling an industry that employs more than 65,000 workers and added $11.7 billion to the nation’s GDP, according to industry data.

  • Sony, Microsoft and Nintendo continue to dominate the gaming business, even as some participants move to play on mobile devices.

Resources for Further Study

Bibliography

Books

Hansen, Dustin, “Game On! Video Game History from Pong and Pac-Man to Mario, Minecraft, and More,” Feiwel & Friends, 2016. A video game executive looks at the growth of games.

Harris, Blake J., “Console Wars: Sega, Nintendo, and the Battle that Defined a Generation,” Dey Street Books, 2014. A writer chronicles how Sega, a small gaming company, took on the juggernaut Nintendo and revolutionized the video game industry.

Schreier, Jason, “Blood, Sweat, and Pixels: The Triumphant, Turbulent Stories Behind How Video Games Are Made,” Harper Paperbacks, 2017. This book explores the artistic challenges, technical impossibilities and marketplace demands of developing popular video games.

Articles

Anderton, Kevin, “The Business Of Video Games: A Multi Billion Dollar Industry,” Forbes, April 29, 2017, http://tinyurl.com/ydc9nlh8. The video gaming industry is continuing to grow and employs nearly 66,000 workers, a graphics designer writes.

Coppock, Mark, “Gaming market explodes for $91 billion in 2016, led by mobile and PC games,” Digital Trends, Dec. 22, 2016, http://tinyurl.com/y7wlkdph. The overall gaming market is growing, and mobile games led the way, but PC gaming also expanded in 2016, according to industry data.

Desjardins, Jeff, “How video games became a $100 billion industry,” Business Insider, Jan. 12, 2017, http://tinyurl.com/yb8vehrr. A writer offers a detailed look at the evolution of the video games market and the emergence of mobile gaming.

Miller, Chance, “Tim Cook touts the future of AR, says the technology isn’t there yet for AR glasses,” 9to5Mac, Oct. 10, 2017, http://tinyurl.com/ybyytmlq. The Apple CEO looks at the future of augmented reality.

Popper, Ben, “Field of streams: how Twitch made video games a spectator sport,” The Verge, Sept. 30, 2013, http://tinyurl.com/ycc58jon. A streaming service helps transform eSports from a “niche sideshow” to a centerpiece of the gaming industry.

Shapiro, T. Rees, “Can video games make kids smarter? Yale University researchers think so,” The Washington Post, Sept. 15, 2016, http://tinyurl.com/y7mlcc6n. A study concludes that playing video games can increase learning capacity in elementary school students.

Reports and Studies

“Essential Facts About the Computer and Video Game Industry,” Entertainment Software Association, 2017, http://tinyurl.com/yb9qdhed. This annual report from the industry trade association surveys more than 4,000 American households about their video game playing habits and attitudes.

Duggan, Maeve, “Gaming and Gamers,” Pew Research Center, Dec. 15, 2015, http://tinyurl.com/qdva6xf. A Washington research group offers an overview of players and the public’s attitudes toward video games.

The Next Step

Innovation

Gallagher, Michael D., “Video games virtually certain to drive future innovation,” The Hill, July 5, 2017, https://tinyurl.com/ybw9pkrj. More than 300 exhibitors displayed their latest innovations at E3, the industry’s largest video games trade show, over the summer.

Matheson, Rob, “Demo day showcases serious innovation in ‘playful’ tech,” MIT News, Aug. 17, 2017, https://tinyurl.com/ydh4s557. An accelerator backed by the Massachusetts Institute of Technology and two other groups is providing startup funding to “playful” gaming technologies such as virtual reality (VR) and augmented reality (AR).

Patterson, Dan, “Game companies are forerunners of the next wave of business tech innovation,” TechRepublic, July 21, 2017, https://tinyurl.com/yalylhbu. Video game developers are pioneering innovations found in the business technology industry, says the developer of Albion Online, a medieval fantasy game.

Training

Becker, Rachel, “Say what? Playing a puzzle video game could help improve your hearing,” The Verge, Oct. 20, 2017, https://tinyurl.com/y8whprbn. The Massachusetts Eye and Ear Infirmary and Harvard Medical School have developed a video game to help the elderly with hearing loss to train themselves to track speech in noisy environments.

Dobkin, Adin, “The Video Game That Could Shape the Future of War,” The Atlantic, Oct. 26, 2017, https://tinyurl.com/ya4wspue. Operation Overmatch, a video game that pits two teams of eight U.S. soldiers against each other in a simulated digital battle, is helping the Army determine which technologies and tactics are most effective.

Vanian, Jonathan, “Farmers Insurance Is Using the Oculus Rift to Train Workers in Virtual Reality,” Fortune, Oct. 25, 2017, https://tinyurl.com/y9vjfj5d. Farmers Insurance is relying on Oculus Rift, a virtual reality program, to simulate home damage scenarios that claims adjusters might encounter after earthquakes, floods and other natural disasters.

Organizations

DAQRI
1201 W. 5th St., Suite T-900, Los Angeles, CA 90017
1-213-375-8830
https://daqri.com/
A company that has created augmented reality-enabled helmets and glasses for use by the aerospace, defense and engineering industries.

Entertainment Software Association
1211 Connecticut Ave., N.W., Washington, DC 20036
1-202-223-2400
www.theesa.com/
A U.S. trade association that supports the business and public affairs needs of companies that publish computer and video games for video game consoles, handheld devices, personal computers and the internet.

IHS Markit
25 Ropemaker St., London, EC2Y 9LY, United Kingdom
+44 20 7260 2000
https://ihsmarkit.com/
Global consulting firm that offers information about, and analysis of, industries and markets, including video games.

Microsoft Corp.
1 Microsoft Way, Redmond, WA 98052
1-800-642-7676
www.microsoft.com/en-us/
Creators of the Xbox 360 gaming console.

Nintendo of America
4600 150th Ave., N.E., Redmond, WA 98052
1-425-882-2040
www.nintendo.com/
Gaming giant that created the Wii console.

Sony Corporation of America
25 Madison Ave., New York, NY 10010
1-212-833-6800
www.sony.com/
Creators of the PlayStation gaming console.

Statista Inc.
55 Broad St., 30th floor, New York, NY 10004
1-212-433-2270
www.statista.com/
Company that provides an online portal for statistics, market research and business intelligence.

DOI: 10.1177/237455680334.n1