Industry Structure - In Brief

THE GAMES INDUSTRY

Introduction
The games industry, once a niche form of interactive entertainment often dismissed as being for children or teenage boys, is now a multi-billion pound industry that rivals the film industry in terms of revenue and prestige.
Gaming was perceived as having ‘hobby culture’ (created by enthusiasts rather than big business) as recently as the 1970s so this is relatively young industry and the way it functions is constantly changing. The main reason for this is due to it being a technology led industry, and as software and hardware develops so does the framework around which games are created, sold and consumed.

Institutions
The games industry is made up of the following institutions:

Developers
Games are created by development studios comprised of software engineers, artists and programmers who write the code, create the structure and animate the game making them playable for gamers. It’s these developers that are perceived as the ‘talent’ in the industry.

Publishers
These are companies that are responsible for the marketing and distribution of the game.

Distributor
A distributor works with retailers (shops, online) to make product available for the consumers to purchase. In the games industry the Publisher usually handles the distribution.

Hardware manufacturers
While developers create software, other companies create the hardware that the games run on. In the games industry the major players are Microsoft, Sony and Nintendo who make the Xbox 360, PlayStation 3 and Wii respectively. There are, however, many other types of hardware apart from consoles on which games can be played such as PC, phones and handhelds (DS, PSP).

Consumer
Or ‘the audience’ - anyone that buys, plays, downloads games.

Structure
Below is a basic illustration of how the videogames industry functions and the process in which games go from ‘concept to consumption’:

Developer - Publisher – Distributor – Hardware – Consumer