In the space of just more than four decades, video games have grown from nothing to become one of the world’s most diverse, exciting and lucrative entertainment industries, and it’s only going to get bigger. Video games’ commercial origins date back to 1971 and the release of Atari’s Computer Space. The pace of change and expansion since then has been blistering. In an industry where nothing stands still, revolution has been the default mode of operation. It’s an attitude that has reaped rich rewards.
People no longer talk of audiences in the millions or even the hundreds of millions. In recent years, the biggest developers have started thinking in terms of reaching billions of players. As a result, revenues are skyrocketing. In 2014, the total market is expected to reach some US$86.8bn compared with US$63.9bn last year, according to PricewaterhouseCoopers. How did this happen?
Video games gained their first foothold in the public consciousness with the arcade games of the 1970s and early 1980s, which became a cultural phenomenon among the younger generation. Following Atari’s early breakthroughs Pong and Breakout, the thirst for the next big hit was unquenchable. Space Invaders, Asteroids, Pac-Man, Donkey Kong, Centipede, Defender.
But the arcade boom wasn’t to last. As more powerful consoles and computers came to the home, a whole new culture – and industry – was to emerge. Video games had gone – almost overnight – from a social, ruthlessly competitive experience to a comparatively solitary one. Games became longer, deeper and more focused on immersing the lone player.
Fuelled by an explosion of interest in home computing, a vast cottage industry grew up to tap into this latent demand. Thousands of budding developers contributed to a relentlessly creative scene on affordable machines such as the Commodore 64 and ZX Spectrum. Young entrepreneurs were quick to take advantage and dozens of fledgling publishers materialised. But as technology became more complex and new generations of systems became available, an aggressive technology race emerged. Only the best-looking, most sophisticated games received financial backing. As the budgets soared, the industry quickly consolidated around the likes of Sega, Nintendo, Activision and Electronic Arts.
But it was an outsider, Sony, that helped revolutionise video-game play and haul it out of its increasingly geek-centric comfort zone. With the 1994 release of the PlayStation console and, in particular, the seminal futuristic racing game Wipeout, it brought video-gaming to the club scene and tapped in to a whole new audience. Crucially, the PlayStation pushed the activity forwards as a more social pastime again. Suddenly it was back in the mainstream, with icons such as Lara Croft bringing an aspirational cool that had been lacking since the early 1980s.
In the mid-1990s, the advent of online video-gaming on the PC began connecting players in previously unimaginable ways. Entire communities were coming together, unrestricted by locality. Once online technology was available on home consoles, audience sizes began to grow. Games such as Tomb Raider and FIFA smashed sales records year after year. The figures were often unprecedented.
But it was with the release of the PlayStation 2 and the controversial Grand Theft Auto III in 2001 that video-gaming finally crossed over into the mainstream. Grand Theft Auto III was banned in many countries yet sales soared beyond 10 million worldwide. With its smartly written and defiantly adult-orientated games, Grand Theft Auto’s developer, Rockstar, set the kind of benchmark that marked out the industry as not simply a huge entertainment business but one that could actually outstrip even the biggest Hollywood blockbuster for profit.
The scale of these kind of global mega-hits quickly became the norm for the industry. Franchises such as The Sims, Need for Speed, FIFA, Pro Evolution Soccer, and Halo sold more than 10 million in the blink of an eye. But even these successes were dwarfed by some of Nintendo’s achievements. Having been completely overshadowed by Sony for two console generations, the Japanese veteran struck back with the release of the Wii in 2006. For the first time in the industry’s history, it wasn’t about having the most technically powerful system, but the most accessible.
Nintendo’s competitors had always targeted the hardcore player and offered more layers of complexity in their quest for added immersion. But it recognised that the controller was the barrier putting off most people. With the simple, motion-controlled Wiimote, players could interact with the technology via natural movement gestures. Nintendo marketed the system almost exclusively at non-gamers and positioned it as an inclusive and above all active form of family entertainment. Nearly 100 million sales later, the Wii is far and away the fastest-selling home system in history.
Incredibly, the success of Nintendo’s handheld DS console has been even greater, with sales of more than 150 million since its launch in late 2004. With its intuitive touchscreen and range of wholesome titles (including the wildly popular Brain Training), Nintendo captured demographics, including housewives and the older generation, that had previously given video games a wide berth.
But however successful the Nintendo DS appeared to be a few years ago, it was the arrival of smartphones and games such as Rovio’s Angry Birds that catapulted video games into stratospheric levels of mass acceptance. Mobile phones had been capable of running them for a long time, but it wasn’t until Apple launched the revolutionary iPhone in 2007 that the tipping point was finally reached.
Once Apple’s App Store went live the following year, games suddenly became more accessible than ever before. The response was dramatic. Just 10 months after the App Store opened, an incredible one billion apps had been downloaded. Within four years, this rose to an eye-watering 25 billion, the majority of which are games.
Meanwhile, the success of Google’s Android platform has been equally impressive, with 1.5 million handsets activated every day. But apart from the ease of downloading, the growing success of smartphone games also comes down to two other crucial factors: accessibility and price. The biggest-selling game, Angry Birds, involves little more than trying to knock down rickety structures with birds.
But where can video gaming go from here? Jason Avent, the creative director behind CSR Racing, thinks the industry has a bright future. “The market has the potential to grow at an incredible rate across phones, tablets, PCs and consoles. It’s not geeky to play games any more.”