Video Games: A Hobby and a Business Venture

If you are like me, the prospect of a new console or release of upcoming video game gets you mighty excited and impatient. For a long time, I viewed my simple hobby as child's play. There are people out there making video games just for fun. It's true that many game developers love to make and create games, but things are a little more complicated these days. Now, "gamers" see a consistent trend of publisher imposed deadlines and the installation of "microtransactions." I will break this down for industry outsiders.

So assuming you like to play the popular games like Call of Duty, Battlefield, or Assassins Creed (there are many more unmentioned titles), that means you like games that are at the peak of the industry. There are game developers and game publishers. That is an oversimplification of a complex industry, but that is the jest of it. More recently, games have started marketing paid downloadable content (DLC), premium memberships, and the aforementioned microtransactions. So now we have a base game selling for $60. Then usually there are 4 DLC releases over a year that are about $15 dollars each or people can opt into the "premium" membership and save about $10 by paying $50 upfront. Alternatively, there are microtransactions which are small purchases of $1 (give or take) to make the game easier or more enjoyable. The fact is, video games are always asking for more money. It isn't cheap to make a video game, but there is definitely a growing trend in finding alternative routes for videos games to keep making money 1 or 2 years into their cycle. Time for some stats:

"Total revenues for the industry in the U.S. hit $23.5 billion last year—a 5% jump over 2014, according to the Entertainment Software Association, the industry lobbying body, which also hosts the E3 trade show in June."

"The recent open beta for DICE’s upcoming Battlefield 1 has broken EA records.

The studio has revealed that the game was played by 13.2m people" in a week of free access.

"Sony has sold 40 million units of the PlayStation 4 globally the company announced today."

Trend: The numbers (active users and sales) in the video game industry just keep getting bigger.