Video Game Software Publishing in the US - Industry Market Research Report

Revenue for the United States video game software publishing market is expected to increase 6.0% in 2012 to $11.2 billion. As gaming becomes more common, the popularity of games of established series like Halo, allows publishers to charge more for games distribution. Retailers revenue depends on these high-turnover items, and must therefore accept higher prices from publishers, shrinking their own margins. The appeal to a greater audience has led to robust annualized industry revenue growth of 3.6% over the five years to 2012, despite challenges like the recession-caused dip in disposable income and shifts in marketing strategies.

Video game publishers changed how they market major releases in 2008 and 2009. Previously, companies re-released franchise games without much accompanying marketing. However, a dip in disposable income stimulated publishers to build hype about games prior to release in order to generate sales. Mass participation in social networking, along with marketing directly to gamers via internet-connected consoles, facilitated this strategy. Internet connectivity via consoles gives Microsoft, Sony and Nintendo an edge in marketing because they produce the consoles that most players use. By selling products through their consoles, these companies have developed a marketplace in which their games are advertised and featured without competition from other publishers. As a result, companies are encouraging consumers to buy games directly through the internet, leading to higher industry profit.

At the same time, the rise of smartphones has opened up a new market for publishers and allowed the number of publishers to expand greatly. Smartphone game publishers can operate with only a few people, or even just one person, to develop a game for release on Apple iPhones and iPads or Google Android phones and devices.

An emphasis on wireless and other emerging platforms is changing how video games are played. As publishers adapt their products to a greater variety of technologies like smartphones, streaming gaming services and interconnected TVs, they will likely appeal to an even greater audience. Sales of games for new platforms, more blockbuster releases and re-releases of previous hits are projected to boost industry revenue in the next five years. IBISWorld forecasts that revenue will grow at an annualized rate of 7.5% to $16.1 billion over the five years to 2017.

Report Scope

Despite a drop in disposable income and other adverse changes in the economy, video game software publishers have experienced strong sales over the five years to 2011. By increasing their investment in marketing and building hype about new releases, demand has risen. Over the next five years, revenue will likely continue rising, with publishers adapting their games to new technologies and consoles.

This industry includes establishments that primarily publish video game software. These establishments carry out operations necessary for producing and distributing video games, including design, documentation, installation and support services. These firms may design, develop and publish games, or they may solely be involved in publishing.

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.