Video game publisher

Last updated

A video game publisher is a company that publishes video games that have been developed either internally by the publisher or externally by a video game developer.


They often finance the development, sometimes by paying a video game developer (the publisher calls this external development) and sometimes by paying an internal staff of developers called a studio. [1] The large video game publishers also distribute the games they publish, while some smaller publishers instead hire distribution companies (or larger video game publishers) to distribute the games they publish. Other functions usually performed by the publisher include deciding on and paying for any licenses used by the game; paying for localization; layout, printing, and possibly the writing of the user manual; and the creation of graphic design elements such as the box design. Some large publishers with vertical structure also own publishing subsidiaries (labels).

Large publishers may also attempt to boost efficiency across all internal and external development teams by providing services such as sound design and code packages for commonly needed functionality.

Because the publisher often finances development, it usually tries to manage development risk with a staff of producers or project managers to monitor the progress of the developer, critique ongoing development, and assist as necessary. Most video games created by an external video game developer are paid for with periodic advances on royalties. These advances are paid when the developer reaches certain stages of development, called milestones.

Business risks

Video game publishing is associated with high risk:

  • Contrasting with the big budget titles increased expense of "front-line" console games is the casual game market, in which smaller, simpler games are published for PCs and as downloadable console games. Also, Nintendo's Wii console, though debuting in the same generation as the PlayStation 3 [10] and the Xbox 360, [11] requires a smaller development budget, as innovation on the Wii is centered around the use of the Wii Remote and not around the graphics pipeline.

Investor interest

Numerous video game publishers are traded publicly on stock markets. As a group, they have had mixed performance. At present, Electronic Arts is the only third-party publisher present in the S&P 500 diversified list of large U.S. corporations; in April 2010, it entered the Fortune 500 for the first time. [12]

Hype over video game publisher stocks has been breathless at two points:

Publishers by revenue

RankNameCountryRevenue in $bn
1 Sony Interactive Entertainment Japan26.9 [14]
2 Microsoft Gaming United States24.2 [15]
3 Tencent Games China16.224
4 Apple United States15.2
5 Nintendo Japan13.9 [16]
6 Electronic Arts United States7.42 [17]
7 NetEase China6.668
8 Embracer Group Sweden3.4 [18]
9 Take-Two Interactive United States3.089
10 Bandai Namco Entertainment Japan3.018
11 Square Enix Japan2.386
12 Nexon South Korea2.286
13 Ubisoft France1.9 [19]
14 Netmarble South Korea1.883
15 Konami Japan1.303
16 Sega Japan1.153
17 Capcom Japan0.73 [20]

In 2021, the largest public companies by game revenue were Tencent, with US$32.2 billion, followed by Sony, with US$18.2 billion, and Apple, with US$15.3 billion, according to Newzoo. [21]

    Related Research Articles

    A video game developer is a software developer specializing in video game development – the process and related disciplines of creating video games. A game developer can range from one person who undertakes all tasks to a large business with employee responsibilities split between individual disciplines, such as programmers, designers, artists, etc. Most game development companies have video game publisher financial and usually marketing support. Self-funded developers are known as independent or indie developers and usually make indie games.

    <span class="mw-page-title-main">History of video games</span>

    The history of video games began in the 1950s and 1960s as computer scientists began designing simple games and simulations on minicomputers and mainframes. Spacewar! was developed by Massachusetts Institute of Technology (MIT) student hobbyists in 1962 as one of the first such games on a video display. The first consumer video game hardware was released in the early 1970s. The first home video game console was the Magnavox Odyssey, and the first arcade video games were Computer Space and Pong. After its home console conversions, numerous companies sprang up to capture Pong's success in both the arcade and the home by cloning the game, causing a series of boom and bust cycles due to oversaturation and lack of innovation.

    <span class="mw-page-title-main">Video game console</span> Computer system for running video games

    A video game console is an electronic device that outputs a video signal or image to display a video game that can be played with a game controller. These may be home consoles, which are generally placed in a permanent location connected to a television or other display devices and controlled with a separate game controller, or handheld consoles, which include their own display unit and controller functions built into the unit and which can be played anywhere. Hybrid consoles combine elements of both home and handheld consoles.

    <span class="mw-page-title-main">Activision</span> American video game publisher

    Activision Publishing, Inc. is an American video game publisher based in Santa Monica, California. It serves as the publishing business for its parent company, Activision Blizzard, and consists of several subsidiary studios. Activision is one of the largest third-party video game publishers in the world and was the top United States publisher in 2016.

    The video game crash of 1983 was a large-scale recession in the video game industry that occurred from 1983 to 1985, primarily in the United States. The crash was attributed to several factors, including market saturation in the number of video game consoles and available games, many of which were of poor quality. This along with waning interest in console games in favor of personal computers. Home video game revenue peaked at around $3.2 billion in 1983, then fell to around $100 million by 1985. The crash abruptly ended what is retrospectively considered the second generation of console video gaming in North America. To a lesser extent, the arcade video game market also weakened as the golden age of arcade video games came to an end.

    <span class="mw-page-title-main">Video game industry</span> Economic sector involved with the development, marketing and sales of video games

    The video game industry is the tertiary and quaternary sectors of the entertainment industry that specialize in the development, marketing, distribution, monetization and consumer feedback of video games. The industry encompasses dozens of job disciplines and thousands of jobs worldwide.

    A console game is a type of video game consisting of images and often sounds generated by a video game console, which are displayed on a television or similar audio-video system, and that can be manipulated by a player. This manipulation usually takes place using a handheld device connected to the console, called a controller. The controller generally contains several buttons and directional controls such as analogue joysticks, each of which has been assigned a purpose for interacting with and controlling the images on the screen. The display, speakers, console, and controls of a console can also be incorporated into one small object known as a handheld game.

    Video game development is the process of developing a video game. The effort is undertaken by a developer, ranging from a single person to an international team dispersed across the globe. Development of commercial video games is normally funded by a publisher and can take several years to reach completion. Independent development has been on the rise, facilitated by the growth of accessible game development software such as Unity and Unreal Engine and new online distribution systems such as Steam and Uplay, as well as the mobile game market for Android and iOS devices.

    <span class="mw-page-title-main">Mobile game</span> Video game played on a mobile device

    A mobile game, or smartphone game, is a video game that is typically played on a mobile phone. The term also refers to all games that are played on any portable device, including from mobile phone, tablet, PDA to handheld game console, portable media player or graphing calculator, with and without network availability. The earliest known game on a mobile phone was a Tetris variant on the Hagenuk MT-2000 device from 1994.

    Germany has the second-largest video games player base in Europe, with 44.3 million gamers in 2018, after Russia. Consumers in Germany spent €5.87 billion on video games over the course of 2021, a 3 percent year-on-year increase from 2020. The video game market in Germany grew by 6 percent to €6.2 billion in 2019.

    <span class="mw-page-title-main">Video games in China</span> Overview of video gaming in China

    The video game industry in Mainland China currently is one of the major markets for the global video game industry, where more than half a billion people play video games. Revenues from China make up around 25% of nearly US$100 billion video game industry as of 2018, and since 2015 has exceeded the contribution to the global market from the United States. Because of its market size, China has been described as the "Games Industry Capital of the World" and is home to some of the largest video game companies. China has also been a major factor in the growth of esports, both in player talent and in revenue.

    Platform exclusivity refers to the status of a video game being developed for and released only on certain platforms. Most commonly, it refers to only being released on a specific video game console or through a specific vendor's platforms—either permanently, or for a definite period of time.

    <span class="mw-page-title-main">Video games in the United States</span> Overview of the video game system in America

    Video gaming in the United States is one of the fastest-growing entertainment industries in the country. The American video game industry is the largest video game industry in the world. According to a 2020 study released by the Entertainment Software Association, the yearly economic output of the American video game industry in 2019 was $90.3 billion, supporting over 429,000 American jobs. With an average yearly salary of about $121,000, the latter figure includes over 143,000 individuals who are directly employed by the video game business. Additionally, activities connected to the video game business generate $12.6 billion in federal, state, and local taxes each year. World Economic Forum estimates that by 2025 the American gaming industry will reach $42.3 billion while worldwide gaming industry will possibly reach US$270 billion. The United States is one of the nations with the largest influence in the video game industry, with video games representing a significant part of its economy.

    <span class="mw-page-title-main">AAA (video game industry)</span> High-budget video game

    In the video game industry, AAA (Triple-A) is an informal classification used to classify video games produced and distributed by a mid-sized or major publisher, which typically have higher development and marketing budgets than other tiers of games. In the mid-2010s, the term "AAA+" was used to describe AAA type games that generated additional revenue over time, in a similar fashion to massively multiplayer online games, by using games-as-a-service methods such as season passes and expansion packs. The similar construction "III" (Triple-I) has also been used to describe high-production-value games in the indie game industry.

    Video game monetization is a type of process that a video game publisher can use to generate revenue from a video game product. The methods of monetization may vary between games, especially when they come from different genres or platforms, but they all serve the same purpose to return money to the game developers, copyright owners, and other stakeholders. As the monetization methods continue to diversify, they also affect the game design in a way that sometimes leads to criticism.

    Video gaming in Finland consists of video game industry of 260 active video game developer studios, roughly a dozen professional players and countless enthusiastic amateurs.

    In the video game industry, games as a service (GaaS) represents providing video games or game content on a continuing revenue model, similar to software as a service. Games as a service are ways to monetize video games either after their initial sale, or to support a free-to-play model. Games released under the GaaS model typically receive a long or indefinite stream of monetized new content over time to encourage players to continue paying to support the game. This often leads to games that work under a GaaS model to be called "living games", "live games", or "live service games" since they continually change with these updates.

    <span class="mw-page-title-main">Home video game console generations</span> Video game consoles released during the same period

    In the video game industry, the market for home video game consoles has frequently been segmented into generations, grouping consoles that are considered to have shared in a competitive marketspace. Since the first home consoles in 1972, there have been nine defined home console generations.


    1. "An Overview of Video Game Publishing for Developers". Aspect Law Group | A media and entertainment law firm. Retrieved February 22, 2023.
    2. Rachel Weber (August 27, 2020). "Why is November still such a big month for games?". gamesradar. Retrieved February 22, 2023.
    3. Yoon, Andrew (September 10, 2007). "Months late, Spider-Man 3 goes to PSP with new content". Engadget . Retrieved July 3, 2019.
    4. Matthews, Matt (April 19, 2012). "Has video game retail become an entirely 'hits driven' industry?". Game Developer. Retrieved August 12, 2013.
    5. Hennings, Nate (August 12, 2013). "'White space' helps us understand the strategic direction of gaming mergers and acquisitions". VentureBeat. Retrieved August 12, 2013.
    6. Messina, Judith (July 31, 2013). "Color Zen throws spotlight on city's games scene". Crain's New York Business. Retrieved August 12, 2013.
    7. nofi (June 28, 2012). "Activision Reduces Prototype Devs To "Support" Role, Significantly Reduces Staff Levels". TheSixthAxis. Retrieved August 17, 2012.
    8. Snider, Mike (June 28, 2012). "Activision cuts staff at 'Prototype' video game studio". USA Today. Retrieved August 17, 2012.
    9. Sinclair, Brendan (September 14, 2006). "Activision exec prices PS3 games". GameSpot . CBS Interactive . Retrieved May 18, 2017.
    10. "PlayStation® Official Site – PlayStation Console, Games, Accessories". Playstation. Archived from the original on November 17, 2014. Retrieved September 17, 2017.
    11. "Why Xbox 360". Archived from the original on December 21, 2013. Retrieved December 20, 2013.
    12. "Electronic Arts Breaks Into Fortune 500", Leigh Alexander, April 26, 2010, Fetched from Web on April 26, 2010.
    13. Clark, Willie (August 18, 2016). "Disney's many, many attempts at figuring out the game industry". Polygon. Retrieved February 22, 2023.
    14. "PlayStation delivers record $26.9 billion revenue, operating profit drops 40%". TweakTown. May 1, 2023. Retrieved November 8, 2023.
    15. Ballard, John (October 18, 2023). "Did Microsoft Waste $69 Billion on Activision Blizzard?". The Motley Fool. Retrieved November 8, 2023.
    16. Kharpal, Arjun (May 9, 2023). "Nintendo Switch sales plunge 22% and the gaming giant expects further declines". CNBC. Retrieved November 8, 2023.
    20. "Business Performance (Japan GAAP) |Financial Data | CAPCOM". October 26, 2023. Retrieved November 8, 2023.
    21. "The Top 10 Public Game Companies Generated $126 Billion in 2021 as Subscriptions and M&A Shake up the Market". Newzoo. Retrieved November 25, 2022.