moeny money for playing games

Games as a Business – An Introduction to the Necessary Evil

Games are art, entertainment, story-telling devices and so much more - but they are also a business. by on January 4, 2014   Twitter   Google+  
Attention
NOTE: This is only an introductory article outlining the goal, focus and topic of this latest column at The Koalition.

As much fun as video games are, as powerful as a medium for story-telling they have become and as the wonderful works of art they are quickly being realized as, the industry is still driven, necessarily, by a singular thing: money. It’s often been said that money makes the world go round, but it is inherently tied to the gaming industry in such an intimate way you can’t escape it. Game developers and game publishers need us to buy their games so that they can make enough money to cover costs and fund their next games. It’s a cycle that works (and will hopefully continue to work) and continues to evolve over time.

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The Purpose

You knew all that though. If you’re reading this right now, you’re probably already heavily invested in the gaming industry as a developer, producer, business owner, indie, player, critic, analyst, or any of the other million titles we hold in order to be considered “part of the industry”. I’m not writing this column to patronize you, or tell you about things you already know, I hope to inform. My goal is for you to navigate back to Facebook, or close your browser, or exit your smartphone application feeling like you learned something from these words, something you wouldn’t really learn other places, about the gaming industry.

Granted, plenty of people out there have valuable commentary to provide on the gaming industry. In fact, here at The Koalition, we’ve tried to set ourselves apart due to our independent nature by delivering unfiltered and unabated criticisms and commentary on gaming for several years now. We just wrapped one of our most successful years ever and we want to continue expanding into 2014 and the years beyond. A fundamental part of that is continuing to deliver new ways of delivering content and this column is one such endeavor.

game dev tycoon pic 1

Need to Know Terms

Before any further entries in the column, there are some preliminary terms that need to be covered (and will be referenced in future entries). So, let’s go over some of the basics of how gaming, as a business, works. Particularly, how it works in the real world. That means playing Game Dev Tycoon (pictured above) is probably not an adequate substitute.

Games/Gaming Industry - When referring to games, gaming, the industry, the game industry, or any other combination, amalgamation or derivative of those topics, I will be referring to the industry as a whole. This includes things like mobile games, iOS games, Android games, PC games, free-to-play games, console games; literally everything. This will be the catch-all term used to wrap everything into one big box that has to do with games.

Developer – Many of you probably know what this is, but it bears description none the less. Put simply, these are the people that make games. Developer can refer to a single person, a team of people, an entire company (development studio, developer studio, studio, etc) or a collection of studios. At the end of the day, they typically choose to call themselves something or refer to everyone involved, but developers make games.

  • First-Party Developer: When the manufacturer of the system the game appears on is the primary developer of the game, usually leading to the game being “exclusive” or only appearing on that system. For example, for Mario and Zelda titles, Nintendo is typically a first-party developer.
  • Second-Party Developer: This refers to when an independent studio within or beside a console manufacturer makes a game for just that system – usually based on a contract or ownership rights. For example, Sucker Punch and Naughty Dog are considered Second-Party Developers for Sony’s systems.
  • Third-Party Developer: This is when a developer that is entirely external to the console makes a game for that system. Infinity Ward, for example, is a third-party game developer known for their work on the Call of Duty series.

Publisher – This is where things get a bit trickier. Publishers do not make games, they publish them. This typically includes things like providing funding for their development, helping with the marketing and spreading the word about a game, contacting media outlets, dealing with licensing, working with console manufacturers and distribution outlets, assisting with testing, promoting production, insisting on certain design elements to ensure greater success and many other things. Basically, if you take everything that goes into a game from idea to store shelf and remove the actual act of making it, the publisher does everything else.

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PR/MarketingThe people and companies that engage in communication with members of the gaming press (see below). Typically they distribute things like press releases, notices and announcements, provide preview/review builds and codes for games, act as the gateway to the developers and publishers, set up interviews, schedule appointments for conventions and all of that other stuff. They may also assist in general marketing efforts, especially on social media outlets in today’s gaming industry or other various ways of helping get a game noticed in the press.

Gaming Press/Media - These are people like us here at The Koalition that review games, tell you about games, analyze the industry, interview developers, work with PR, attend conventions and all those other things in the name of delivering information, but also offering our opinions on the industry and games in general. A lot of what we do here at The Koalition, for example, is provide commentary and op-ed pieces about games and the industry as a whole. Typically gaming press is in the form of a website or magazine and are made up of either a handful of or sometimes even dozens of people at a single publication.

Questions?

That pretty much wraps up all the stuff you need to know about this new column. This entry was simply to serve as an introduction to the business side of gaming, what it means for this column and a quick rundown of some of the commonly used terms you’ll need to become familiar with in order to keep up. If you have any additional questions drop them down in the comments below and leave suggestions for topics here. This will be a bi-weekly weekend column, so keep an eye out for the next entry in about two weeks.

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