The Video Gaming Industry Essay Example

in 1978.

The advent of gaming consoles signified the commencement of a novel era for video games, with Pac Man by Namco and Space Invaders by Atari being two immensely popular games that aided in initiating this modern age during the 1980s. The triumph of arcade games played a part in propelling the popularity of home gaming systems, as evidenced by American arcades generating over $5 billion in revenue solely in 1981, according to Herman (p. org).

The release of the Colecovision console in 1982 marked another significant milestone in the gaming industry. Colecovision's success can be largely attributed to its possession of game licenses from Nintendo, particularly Donkey Kong and Donkey Kong Junior. The industry remained stagnant for much of the mid-1980s, until Nintendo revived it with the launch of their 8-bit Entertainment System (NES) in 1986 (Shah, p.).

In the 1980s, Nintendo dominated the gaming industry with successful releases like Super Mario Brothers and Tetris thanks to the NES. Nintendo also entered a new market segment in 1989 with the Game Boy handheld system. However, as Sega released their 16-bit Genesis system, Nintendo faced new competition in the early 1990s. The Genesis system lasted for about five years until Sega introduced the 32x, an adapter that allowed the Genesis to run 32-bit cartridge games, in 1994 (Shah, p.5; Nichols, p.).

In the 1990s, console companies made the decision to focus on developing 64-bit consoles rather than continuing with 32-bit machines. Only one exception was the 3DO, a product of collaboration between 3DO and licensing partners Panasonic, Goldstar, and Sanyo (Nichols, p. 98). Despite receiving positive reviews initially, the 3DO's high price tag of

$699 prevented widespread success for both the company and its licensees (Herman, p. 8).

The console space saw a significant shift in 1995 when Sony introduced their 32-bit Play Station system, disrupting the market with a price point of $299 and claiming dominance. Nintendo followed suit the next year with the N64, propelled by previous success in Japan. The evolution of consoles continued at a rapid pace, as Sega released their 128-bit system, the Dreamcast, in 1999 (Shah, p.6).

There is an ongoing discussion in multiple industries regarding the argument of piracy versus emulation. In the music industry, those who participate in illegal activities are known as "pirates" (Mann, p. 92). The main concern is whether or not the video game industry will adopt a similar approach or take a new strategy for managing intellectual property for informational goods. A decade ago, video game emulators were seen as an innovative technology (Conley, p. 6), but ten years later they have become a disputed issue when it comes to copyright concerns and the future of the video game sector (Wen, p. 3).

Conversion software known as emulators is widely used by gaming enthusiasts to play games on systems or platforms that were not originally designed for them. The emulation market remains strong due to the internet's expansion, peer-to-peer file sharing technology, and console manufacturers overlooking demand for older games (Conley, p.3). Neglecting this unfulfilled demand may prompt customers to turn to alternative sources like peer-to-peer networks where free emulation software is available.

According to Conley (p. 17), game enthusiasts can now easily download an emulator and 298 Nintendo 64 games, resulting in a potential US$10,920 loss per customer to the

gaming industry. This situation is causing video game console manufacturers and game publishers to face a dilemma similar to that of the music and film industries. They must decide whether to follow a costly litigation approach that could ultimately fail to stop emulator proliferation and alienate their customers. Timothy White, a longtime industry critic, believes this approach will only delay the inevitable (Mann, p.).

An alternative option suggested by Conley (p. 9) is for game console manufacturers and software publishers to take note of the customer demand that is driving the popularity of emulators and change their approach accordingly. Instead of solely relying on legal action, they can utilize a more advanced strategy by venturing into emulation business themselves. By paying attention to their customers and innovatively contemplating their business models, manufacturers and publishers can preserve their markets, safeguard their brand equity and intellectual property and build positive consumer relationships.

As per a market analysis of the video game sector, there is a substantial gap between the quantity of games that are accessible to consumers and the amount they purchase. Figure 1 reveals that console owners generally buy only a fraction of commercially available games because of restricted retail shelf space and personal preferences. To boost revenue and retain customer allegiance, it would be prudent for console manufacturers to explore alternative tactics (Conley, p.17).

In the past, gaming console developers have primarily concentrated on copyrighting video game titles and packaging, with Nintendo having over 1500 registered US video game copyright registrations according to the US Copyright Office. However, it is suggested that console manufacturers should also utilize copyright protection to safeguard the appearance and atmosphere of the console's

starting screen and menu. By doing so, they can protect the graphic elements such as logos, icons, symbols, layout of menu-bars, shapes, and designs through copyright protection as stated by the US Copyright Office.

The value chain in the video game console industry is controlled by Nintendo, Sony, and Microsoft. Developers and publishers must obtain the console manufacturer's consent to produce titles for their consoles, and a licensing fee is required for every unit sold. Only three players are involved in this stage of the value chain, resulting in higher revenue capture per player compared to other parts of the chain. Console manufacturers seek individuality deals with third-party publishers for single or multiple titles, while also creating "first party" titles through their in-house developers (Conley, p.10).

Console manufacturers are able to capture all profits related to development, distribution, and licensing through the development of first-party titles. A study by Conley (2004) showed that the top five retailers make up 75% of the video game market. These retailers include specialized software stores like Game Stop and Electronics Boutique, toy stores like Toy R’ Us and KB Toys, larger electronics retailers such as Best Buy and Circuit City, and mass merchandisers like Wal-Mart. Figure 2 depicts the breakdown of retailers and their percentage of the market.

My interest lies in the topic of government regulation and involvement in the video gaming industry, which is particularly significant for American culture. In my opinion, it is not necessary for the government to address perceived issues regarding video games, gameplay, and related matters as there are more pressing concerns that require our time, money, and efforts. It is not our responsibility to suggest

alternatives as individuals are capable of deciding this for themselves. I believe that content regulation can be achieved through established norms.

While some games have labels that highlight their content, it is recognized that certain parents are incapable of determining what is suitable for their children. This is a parenting issue, rather than a problem with the game's content. The responsibility for preventing minors from accessing mature rated games does not solely rest with retailers, but also with parents who must take some responsibility.

The relatives are unconcerned about the game children play as they are unaware of it. On a visit to a store, the child discovers the game and demands it, leading to a tantrum when the parent declines to purchase it. The government needs to focus on the escalating gas prices and unrest in the Middle East rather than fixating on poor parenting. Video games are a manifestation of creativity like movies, art, and music. While movies provide an opportunity to see life via the perspective of a hero battling crime, video games provide the added advantage of enabling us to take on the role of that hero with full control over decision-making, moves, and destinations.

Including violent elements in games is justified because it reflects reality and adds excitement. Without consequences for poor decision-making, games can become uninteresting. Imposing restrictions on video games is equivalent to limiting freedom of expression, a founding principle of the United States. Curtailing this freedom would undermine what makes the country unique and successful.

The regulation of video games should not be limited because of a small number of parents who are unable to supervise their children. It is

advisable to let the ESRB take charge of game regulation. References: Conley, J (2004), Use of a Game Over: Emulation and the Video Game Industry, Volume 2, Number 2. Herman, L (2003), The History of Video Games: Gaming Journal, p.

The reference for Mann's article "The Year the Music Died" from the February edition of Wired magazine, along with Nichols' name, can be found within the HTML paragraph tags.

Palgrave Macmillan published Brands; Gaming: The Computer Gaming Phenomenon and its Impact on Brands and Businesses in 2006, in Basingstoke, UK.