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Mathieu Provencher

High Impact Gaming


Hi again Guys. I heard earlier this week that the gaming industry is bigger than the movie and the music industries combined!!!! Grand Theft Auto 5 for example sold worth $800'000'000 in ONE DAY! Which, by the way, is more than the Avatar movie has made in its lifetime (since 2009).

So... what can you guys tell us about this growing industry? A bit of history and economic analysis perhaps? Where does it come from and how did it get soooooo big?

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A person answered:

Here are some interesting facts regarding video games and the US Economy, From 2005 to 2010, the entertainment software industry's revenue more than doubled. Over the same period, the entire U.S. Gross Domestic Product (GDP) only grew by about 16 percent.

The entertainment software industry added nearly $5 billion to the U.S. GDP in 2009. The U.S. entertainment software industry also continues to function as a vital source of employment. Currently, video game companies directly and indirectly employ more than 120,000 people in 34 states. The average compensation for direct employees is $90,000, resulting in total national compensation of $2.9 billion.

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Another person answered:

The whole home console industry is an oligopoly run by Nintendo, Sony and Xbox. I think the market crashed in the 1980s with too many consoles. Then the SNES was a success, Sony followed and Microsoft launched Xbox afterwards. And I am not sure, but video games (not piracy) are very expensive thanks to high average costs on R&D. Therefore entry costs are huge and there is product diferentiation (the point is that every video game should be a different experience!)

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