Entertainment and Games Software

The US entertainment and games software industry includes about ­­­1,000 companies with combined annual revenue of about $12 billion. Major companies include Activision Blizzard, Electronic Arts, Take-Two Interactive, and THQ, along with divisions of Microsoft, Nintendo, and Sony.

Manufacturers of video game consoles and computers used for gaming are covered in the Electronic Gaming Products and Computer Manufacture 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 are video game software (about 70 percent of revenues) and PC game software. Video game software is made for dedicated gaming machines that work with TVs, such as Sony’s PlayStation, Microsoft’s Xbox, and Nintendo’s Wii; the category also includes content for portable handheld devices such as PSP (PlayStation Portable); Nintendo’s Game Cube and DS systems; and cell phones.

Development studios bring together the talents of game designers, producers, programmers, graphic artists, sound engineers, and play testers who may work for months or years to deliver a completed software product. Development studios work with software ...