Video Game Industry Transformation

In the 1970s, individual gamers pecked at keyboards or manipulated a dial to move black-and-white dots across the screen. Thirty years later, games are an experience for groups of family and friends to send their cartoon avatars soaring through multi-dimensional virtual cities. The gamer audience has expanded, matured and diversified with the evolution of video games. A solitary pastime played on a box in the corner of a basement recreation room or bar barely resembles collaborative educational, artistic and serious games simultaneously played on several continents by millions of contestants. Devices for the young have become devices that keep senior citizens young, bring families together and train corporate professionals. In barely more than a generation, video games have been transformed from a diversion for the few into a mass medium, helping people live, learn, work and of course, play.

The Evolution of Games

Game programming has developed beyond DOS-based games with simple linear programming to advanced artistic, dramatic and interactive game experiences. Pop-culture guitar and band games have players strumming in bars, spurring an entertainment phenomenon to compete with karaoke. Today’s games create new worlds where players can manipulate and change their environment through realistic animation and unique motion-sensor controllers.

Today’s games also do more than create virtual worlds; they also illustrate the real world. Nonprofit organizations and issue advocates use “serious games” as a medium to reach young tech-savvy consumers. The United Nations World Food Programme, for example, created a computer game to educate children about world hunger. A commercial video game modified by University of Southern California researchers helps recently deployed troops cope with symptoms of post-traumatic stress disorder through play that simulates conditions in Iraq.

Corporations and educational institutions have also found video games to be useful tools. Companies like American Express, Bank of America, IBM, JP Morgan Chase, Nokia and Pfizer offer interactive computer training that includes game-like simulations. Educators harness the power of video games to teach the next generation. The National Education Association (NEA), a guiding force for instructors in schools, recommends city-building games to improve students’ problem-solving and analytical skills.

Today’s Gamer

The individuals playing video games comprise an increasingly large and definition-defying group. According to the Entertainment Software Association, the average gamer is 34 years old and has been playing for 12 years. Forty percent of gamers are women and more than a quarter are over age 50. In addition, a December 2008 study by the Pew Internet and American Life Project found that 53 percent of all Americans over the age of 18 play video games, as do a full 97 percent of teens. As these statistics show, today’s video game players include students, employees, military troops, seniors, mothers and fathers.

The diverse segments of the gamer group -- students, parents and grandparents -- have driven the evolution of games into new territory. The first gamers have grown up, started families and included their children and parents in the fun, multiplying the pool of multi-generational gamers exponentially. Interactive social dance games are also making this pastime more appealing to family members of all ages. Schools have also used active dance, fitness and sports games like these in gym classes to the delight of many students. Retirement communities are holding video game tournaments and receiving grants to purchase video game consoles.

As the population of gamers has expanded, market forces have driven game developers to make games more accessible to this new, diverse audience. Senior citizens are keeping their minds sharp through games offering a series of 15 different activities like Sudoku, word scrambles and number games. Suburban moms are running diners in casual games featuring a stockbroker who quits her day job to run a diner. Casual games have simple rules and plot lines to target a growing segment of occasional players.

Industry Growth

In the 1970s, a handful of companies, including Atari Inc. and Magnavox, produced a limited amount of video games designed to appeal mainly to young males. In the following decades, competitors such as Nintendo, Sony and Namco joined the industry and companies began making games that appealed to a wider audience. Today, the growth of gamers and increased demand for games has translated into the explosive growth of the entertainment software industry. Video games are now a $20 billion industry in the U.S.and the Entertainment Software Associationhas over 30 member companies, including Microsoft, Nintendo, Sony and Electronic Arts.

The entertainment software industry is currently one of the best performing sectors of the American economy. Overall computer and video game industry hardware, software and peripheral sales reached $20 billion in 2009. The industry’s December 2009 sales alone reached $5.53 billion. By comparison, as recently as 1997, the industry generated $5.1 billion over the entire year.

The industry also adds lucrative jobs to local economies with average total compensation reaching more than $89,000. Computer and video game companies directly and indirectly employ more than 120,000 people in 34 states.

Go Figure

• 1972 - The year Magnavox released the first home video game console, The Odyssey, predating the Atari Pong consoles by three years.
• 1,000,000 - The number of units sold of the video game console Telstar, the first produced by Coleco, a toy manufacturing company in 1976.
• $199.00 - The cost of the Nintendo 64 video game console released in 1996.
• 67 - The percent of American households that play computer or video games.
• 20 - The percent of people playing some type of video game in March 2010 who did at least some of their gaming on a social networking site like Facebook.