Electronic Games, International

Characteristics of Electronic Games

An electronic game is an interactive, rule-governed system based on computer processing power. Rules are a fundamental feature that electronic games share with all other games. The outcomes of the interactions are variable because they depend on players' efforts; when players do not communicate with the game, it simply stops. As in other games, players care about the outcome of the game. Serious players want to win, after all, and feel disappointed when they lose. In electronic games, the structure of credit points teaches players immediately that some outcomes are positive and some negative.

International Production of Games

Today, the development, production, and distribution of electronic games constitute a large industry involving many commercial partners. The process of game production begins in a development studio, where ideas are generated. If the studio succeeds in persuading a game publisher of the idea's value, an advance sum is allocated, and actual development begins. A design team of 30 to 40 writers, graphic designers, programmers, musicians, and quality testers works for about a year and a half on a new game. After approval of the final version, the game is mass-produced and distributed. The international market for electronic games is highly competitive. Estimates are that only about 5% of the games make a profit. However, these profits are huge in the case of blockbusters like The Sims, Halo, or GTA: San Andreas, but such profits are often needed to cover losses on less successful games.

Competition has led to concentration in the gaming industry on a level comparable with the movie and music industries. Many small, independent developers from the early days went out of business or were bought by other companies, as in the case of Maxis, the developer of SimCity and The Sims, which is now owned by Electronic Arts. Mergers between publishers and many takeovers further contributed to the industry's concentration. In this process, Electronic Arts became the world's largest game publisher.

The international game industry is dominated by publishers and developers from the United States, Japan, and the United Kingdom. The American companies (e.g., Electronic Arts, Atari, Id Software) have the largest global market share. Japanese companies (e.g., Konami, Square Enid, Sega) are second in the world game market, but they dominate the local Japanese market. The British game industry (e.g., Adios Interactive, Sic games, Rockstar Games) produces successfully for the world market, but its volume is far smaller than the American and Japanese output. Developers and publishers in other countries are mostly small. French Besot is the exception: It is on the edge of the world's 10 largest game publishers.

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