Entertainment & Games Software Industry Profile

The US entertainment and games software industry includes about 220 companies with combined annual revenue of about $10 billion. Major companies include Activision Blizzard, Electronic Arts, Microsoft Game Studios, Take-Two Interactive, and THQ.

Globally, consumers spend about $45 billion annually on video game software. Outside of the US, Japan is the largest producer of video games and is home to such companies as Capcom, Nintendo, Sony, and Square Enix. Other major companies in this industry include NCsoft (South Korea), Shanda Games (China), and Ubisoft (France).

Manufacturers of video game consoles and computers used for gaming are covered in the Electronic Toys & Games Manufacturing and Computer Manufacturing profiles.

COMPETITIVE LANDSCAPE

Demand is driven primarily by personal income and gamer demographics. The profitability of individual companies depends on an understanding of consumer needs, timely product development, and effective marketing. Large companies have economies of scale in manufacturing, marketing, distribution, and selling. Small companies can compete successfully by developing creative products.

Computer and video games compete as a leisure-time activity with TV, movies, music, the Internet, and other forms of electronic and non-electronic entertainment.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major entertainment and games software product segments include applications for gaming consoles (about 75 percent of industry revenues), handheld devices (10 percent), and personal computers (10 percent). Console software is made for dedicated gaming devices that work with TVs; major platforms include Microsoft's Xbox, Nintendo's Wii, and Sony's Playstation. The handheld ...