The North American Game Industry - The Video Game Industry: Formation, Present State, and Future - page 84

GAME CONSOLE MANUFACTURERS

From the time of the Atari VCS forward, a very particular structure emerged
for the North American game industry, and this structure has only solidi-
fi ed as the industry has matured. The most visible aspect of the video game
industry is the device that runs games: the game console. At its simplest,
the game console is a device capable of playing numerous dif erent games
and displaying that content on a home television screen. Those games are
most frequently sold at retail stores as cartridges or disks. The Nintendo
64, released in 1997, was the last major game console to use cartridges.
During the 1980s and 1990s a large number of PC-based game com-
panies emerged. Although this had a signifi cant impact on the kinds of
companies that emerged, for various reasons, the console game industry
remains the single most infl uential force in North America.
The game console remains at the forefront for both video game develop-
ers and publishing companies alike. Although online and PC games remain
a large market, they are dwarfed by the sales on consoles. Thus, for both
developers and publishers, it remains the primary focus for the North
American game industry. North America accounts for nearly 34 per cent
of the worlds share of video game consoles with Microsoft, Nintendo and
Sony being the market leaders (Datamonitor 2007). After the decline of
Atari in the early 1980s it was not until the emergence of Microsoft's Xbox
in 2001 that North America took a stand at producing a competitive game
console. Throughout the 1980s and 1990s companies like Nintendo, Sega
and Sony dominated the console game industry. Although the Xbox was
not the success that Microsoft had initially hoped, the Xbox 360, released
in 2005 has proven a much more prominent competitor.
Game consoles are critically important in maintaining the current struc-
ture of the North American game industry. For a game development studio
to create a game for a console, they must fi rst acquire a “license” from the
manufacturer. This license is an agreement between the developer and the
manufacturer to produce (literally “manufacture” the disks or cartridges) a
game, as well as provide the game studio with the hardware and software

Table 5.1 VGChartz Sales Data 2006-2010 (Staf 2011)

Year Console Game Sales PC Game Sales

2006 231.8 Million Units 1.2 Million Units

2007 388.4 Million Units 5.2 Million Units

2008 628.5 Million Units 9.3 Million Units

2009 602.3 Million Units 8.8 Million Units

2010 636 Million Units 17.6 Million Units