The gaming industry has experienced substantial growth since the years of the Atari 2600 and the Magnavox Odyssey gaming consoles. According to this study by Ratesupermarket, the gaming industry is alive and well all over the world, particularly in countries like the U.S. and Canada. With more than half of all Canadians engaged in some form of gaming and a home grown industry that generates $1.7 billion CDN in revenue, it is interesting to see how the industry began and how gaming has since taken such a root in national life and culture.
Here we will take a look at the earliest gaming systems and where gaming is heading. Is the growth in online and mobile gaming poised to lead the next revolution in gaming? If so, will growth in either of these platforms impact gaming overall? We will explore these questions in depth below.
Growth of the Gaming Industry
The History of Video Games
The first video game displayed publicly was on a computer built for the 1939-1940 World’s Fair in New York. The game, NIM, was designed for the Westinghouse display based on a traditional game of the time known as pickup sticks where players challenged the computer to see who would be left to pick up the last match (the Westinghouse computer won 90 percent of all challenges). Games later moved from mainframe applications to retail consoles, the first being Pong, invented by Atari in 1972.
Video arcades and personal consoles littered the landscape by the late 1970s, with the Atari Corporation at the forefront producing such titles as Asteroids, Centipede, Missile Command, and Pong. As Atari branched into personal computing (based on the success of upstart Apple) its dominance was challenged by Nintendo (1985) and Sony (1995). By the end of 2010, Generation Seven gaming systems from Microsoft (XBOX), Nintendo (Wii), and Sony (PlayStation) dominated the market.
Growth in Online and Mobile Gaming
In 2012 sales of video game consoles fell 21 percent from prior year sales to just slightly over $4 billion. Microsoft experienced a drop in sales of 29 percent and the sales of PlayStation 3s dropped 15 percent. The sales of Wii consoles were lower than expected, signaling a decline in consumer interest in video gaming consoles. The sale of games fell 18 percent in 2011 from $11 billion to $9 billion, with the retailer GameStop, which sells new and used games, experiencing a 5 percent drop in new game sales and a 16 percent drop in the sale of used games.
Where are these numbers going? Mobile gaming apps, primarily for tablet computers and cell phones, and apps for social media websites (i.e. Facebook) have been on the rise since 2009. In fact, in 2012, video games that did not use a computer or gaming console overtook traditional gaming platforms in sales for the first time, according to the Entertainment Software Association.
Future Prospects for Gaming
Gaming will see a shift from traditional fixed systems (computers and gaming consoles) to mobile platforms, allowing gamers to take their games on the go. Developers recognize the importance of mobile gaming to the future of revenue growth for the industry. In the United States, for example, mobile gaming is projected to reach 126 million users by the end of 2013. In four years, this number is expected to grow 52 percent to 191 million mobile gamers, driving revenues from $1.78 billion to $3.77 billion in 2017.