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Games Industry Growth Outpacing US Economy

Zonk posted more than 6 years ago | from the plenty-of-blocks-and-coins-to-go-around dept.

Businesses 54

Gamasutra is reporting that the Entertainment Software Association believes the games industry has outstripped the US economy as a whole. In fact, the group found that the industry grew by an astonishing 17% between 2003-2006, some 13% faster than the general US economy. "The ESA states that the video game industry contributed $3.8 billion to the U.S. Gross Domestic Product in 2006. Though 24,000 are directly employed, according to the report in total 80,000 are employed directly and indirectly by the industry in 31 states and U.S.-based game industry employees received a total of $2.2 billion in compensation. Predictably, California is the largest employer in the video game industry, accounting for around 40% of the nation's industry jobs. California industry growth was 12.3% last year, which the ESA claims is "nearly three times faster" than the state's overall growth."

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54 comments

This is the part where... (1)

Perseid (660451) | more than 6 years ago | (#21510407)

...people on the news start talking about bubbles and stuff.

Eating someone elses lunch (4, Insightful)

king-manic (409855) | more than 6 years ago | (#21510451)

It's likely eating at other parts of the entertainment industry. $50 and 20h spent on COD 4 is $50 and 20h not spend going to movies or buying CD's. Music and cinema have declined in the last 10 years. This may be why (not piracy).

Re:Eating someone elses lunch (0)

Anonymous Coward | more than 6 years ago | (#21511085)

why is it that you people still deny that piracy has an effect on the music industry? you guys are really fooling yourself or at least you're trying to fool others into thinking that your activities do not effect an economy. you music pirates have created a negative effect on the economy regardless of your inability to be honest about it.

Re:Eating someone elses lunch (1)

king-manic (409855) | more than 6 years ago | (#21511211)

why is it that you people still deny that piracy has an effect on the music industry? you guys are really fooling yourself or at least you're trying to fool others into thinking that your activities do not effect an economy. you music pirates have created a negative effect on the economy regardless of your inability to be honest about it.
I have not stolen a single song. I either listen to the radio, rip Cd's, buy from the artist, or buy from iTunes. However anti-Piracy impact how i am able to use music i purchased. The rationale behind the overzealous anti-piracy policies is the decline of music sales. It's just as likely that the economic model is impacted by competition as much as piracy. It is at least a co-factor.

Re:Eating someone elses lunch (1)

KDR_11k (778916) | more than 6 years ago | (#21524365)

Meh, I'm too busy playing videogames to bother with downloading music anyway.

Re:Eating someone elses lunch (4, Funny)

feepness (543479) | more than 6 years ago | (#21511115)

Music and cinema have declined in the last 10 years. This may be why (not piracy).
If music and cinema didn't want their lunches stolen they should have marked there lunches and not left them in the fridge over the weekend.

Re:Eating someone elses lunch (0)

Anonymous Coward | more than 6 years ago | (#21511335)

Over the past year with my 360, i've been watching WAY less TV, measured in hours per night, and seeing fewer movies. Even with games costing 60 bucks I might be saving money. I used to see a movie a week, more over the holidays. Now it's around a movie a month.

Re:Eating someone elses lunch (1)

PrescriptionWarning (932687) | more than 6 years ago | (#21513281)

and when they realize that making a video game adaptation of every blockbuster movie doesn't help movie sales when the game sucks complete monkey chow.

Re:Eating someone elses lunch (1)

Westacular (118145) | more than 6 years ago | (#21514309)

It doesn't help, but it probably doesn't hurt given the low expectations for all timed release movie-to-game adaptations. They make the game because it will sell at predictable, profitable numbers to kids who like the movie and don't know to play better games. As far as the movie companies are concerned, it's like t-shirts or lunch boxes: they make them because people will buy them. Enough people to turn a profit. And, naturally, they make them as cheaply as they can without it hurting sales or causing complaints.

Re:Eating someone elses lunch (1)

dintech (998802) | more than 6 years ago | (#21516269)

I wish I was one of those kids. Imagine the awe and wonder at discovering Half-Life 2 after years of wandering in the desert of movie tie-ins and EA Sports iterations. Unfortunately my first exposures were with games like Monkey Island 2, Frontier: Elite 2 and Civilization so I'll never know what that feels like...

Re:Eating someone elses lunch (1)

Targon (17348) | more than 6 years ago | (#21516787)

There are many issues why the music and cinema industries have been losing ground, and anyone who frequents Slashdot would know about the issues.

Between the high costs to buy a CD vs. downloading an individual track for $0.99 online, of course that will cut back on sales of CDs. It used to be that one or two good tracks on a CD would be enough for some to buy the whole CD, and that just doesn't work anymore. And that only accounts for losses from people who do things legally. You do have piracy that also accounts for SOME losses as well, though it accounts for less of the loss than the RIAA claims. The RIAA is probably a reason why many refuse to buy music, just to spite that organization. The retail costs of CDs vs. ordering the same CD online is quite a bit higher, so that is also why people do not buy them in stores. The cost of transportation is so high at this point that it drives up distribution costs, as well as electric and other costs, so that retail in general is not doing as well as it used to.

For movies, budgets have gone up, quality has gone up, and sales have gone up for DVDs. People do not want to go to the movies for many releases because when it costs $10 per person, people really question if it is worth it if a DVD movie only costs $20-$25 and you can watch it as many times as you want. The special effects budgets also have been going up, though that will eventually level off as the technology becomes cheaper. This is something many people do not seem to understand is that the whole area of special effects WILL eventually become cheaper as technology evolves. Look at commercials and in some cases, the effects used in a stupid commercial would have been considered amazing only 20 years ago.

The games industry at this point provides something that is cheaper in terms of cost/hour of entertainment than the movie industry, but don't think for a moment that it is the reason for problems in the movie industry. More people today have a premium movie channel than they have in the past, and many people will wait for a questionable movie to show up on HBO rather than paying per movie. When a game console costs $400 or more, and you hear about teenagers standing in line to buy a new console at midnight to buy one, or even about parents doing it for their children, that shows that the entertainment budget that these people have is high enough where if these people want to play games and go to the movies, they will do both. It's not about one or the other, it is about what they want. There are many people that only play games and never go to the movies, but these are probably the same type that wouldn't have gone to the movies 20 years ago. Without the game industry, these people might have been out doing other things.

It is hard to say because things like the culture of video game players encourages people to only play games and not to do anything else in some cases. And the whole MMO community tends to focus on playing the one game the player is playing at that time. Ask the hard-core WoW or EQ player about how many hours a week they spend on raids. That is the group that is killing movie sales, because the hard-core MMO players don't spend time doing ANYTHING else.

Re:Eating someone elses lunch (1)

KDR_11k (778916) | more than 6 years ago | (#21524427)

Supposedly the rule of thumb in the movie industry is that the demand for more special effects grows at the same rate as the prices for existing tech go down so the prices remain stable.

Why is this stat relevant? (4, Insightful)

davevt5 (30696) | more than 6 years ago | (#21510455)

I'm not being facetious in asking why the growth RATE of the games industry being higher than the growth rate of the economy is a big deal? Don't all new technology industries have higher growth rates than the economy as a whole?

 

Re:Why is this stat relevant? (0)

Anonymous Coward | more than 6 years ago | (#21511795)

Why is it RELEVANT? Dude - do the math:

The US GDP is $13,200 billion and growing at 4% per annum. The games industry is contributing $3.8 billion of that - but is growing at 17% so the laws of compound interest apply: FV = PV * ( 1 + G ) ^ N where FV is the future value, PV is the present value and G is the growth rate (trust me, I *am* a Games Programmer):

$13,200bn x 1.04 ^ N == $3.8bn x 1.17 ^ N

So N = about 70 years...the year 2077.

Hence, by the year 2077 99.99% of the US GDP will be the games industry and the remaining 0.01% will be employed making the Diet Coke and Twinkies needed to support us all. Slashdot will be the only remaining news service and "crunch time" will replace all national holidays except of course the launch date of the next Xbox during which everyone will traditionally stand outside BestBuy all night freezing their butts off.

I don't see why this stuff is so hard to understand...really.

Re:Why is this stat relevant? (1)

aichpvee (631243) | more than 6 years ago | (#21513695)

It isn't Mountain Dew and Cheetos anymore?!?!

Re:Why is this stat relevant? (1)

JCSoRocks (1142053) | more than 6 years ago | (#21518949)

Hey! Where are the cheetos? I'm getting some Mt. Dew, anyone want some Mt. Dew?

Re:Why is this stat relevant? (0)

Anonymous Coward | more than 6 years ago | (#21517073)

Dude I can't believe you wasted a post that good on AC. Mod parent up!

In related news... (5, Insightful)

siufish (814496) | more than 6 years ago | (#21510497)

Children growth outpacing adults. We're doomed!

Re:In related news... (1)

moderatorrater (1095745) | more than 6 years ago | (#21510765)

If we don't watch out, they're going to take over.

Re:In related news... (1)

renegadesx (977007) | more than 6 years ago | (#21511283)

And this just in... games are popular
News at 11

Maybe we're the best at making games... (1)

Usefull Idiot (202445) | more than 6 years ago | (#21510535)

and people in other countries like to buy them. Of course it'll be just an excuse for Wall Street to start speculating, overvaluing game companies, then losing a lot of money.

Re:Maybe we're the best at making games... (0)

Anonymous Coward | more than 6 years ago | (#21510693)

No, this is pretty much nonsense. Japan is infinitely better at game making than the US.

Re:Maybe we're the best at making games... (4, Insightful)

Turn-X Alphonse (789240) | more than 6 years ago | (#21510919)

That is an extremely arrogant point of view to have.

Britain and Japan both have amazingly good game makers and no single country really excels above the others, they're just better in some areas in general. One could argue that the US's biggest games company is EA, which most Slashdotters at least see as the lowest of the ;low in terms of quality products.

Re:Maybe we're the best at making games... (1)

Kohath (38547) | more than 6 years ago | (#21513201)

That is an extremely arrogant point of view to have.

It's extremely arrogant to think that your team/group/squad/country/self may be the best at something?

You must be fun at sporting events. "Quick everyone, stop the we're number 1 chant before Alphonse hears you. We don't need another lecture on how arrogant we are and how the other team has good players too. He also disapproves of your giant foam finger, your hat with sports team logo, and your body paint because all the teams' logos aren't represented."

One could argue that the US's biggest games company is EA...

One could more-correctly argue it's Activision.

Re:Maybe we're the best at making games... (0)

Anonymous Coward | more than 6 years ago | (#21516503)

You're right, he was wrong.
It's not extremely arrogant, it's just extremely stupid

Re:Maybe we're the best at making games... (1)

blahplusplus (757119) | more than 6 years ago | (#21516591)

"Britain and Japan both have amazingly good game makers"

I'd dispute that as of late, they have had a pretty good record but... certain companies make some good games but God of War and God of War for the PS2 were truly japan shattering games for me. You could tell GoW and GoW 2 were made by *gamers*.

On the PS2 I almost played *exlcusively* american games, with the exception of Final fantasy and xenosaga and both left a bad taste in my mouth. I loved Xenosaga's story but the gameplay just didn't hang together well.

Japan is really losing out in the *gameplay* department IMHO, they make good games, don't get me wrong, but I haven't seen anything as fresh as God of War in a long time... a game in which *all aspects* were crafted with *care*.

Re:Maybe we're the best at making games... (1)

KDR_11k (778916) | more than 6 years ago | (#21524491)

Might want to try Mario Galaxy, the rating average for that is 2nd best game ever (or best if you consider that OOT has only 30 reviews listed and back when it had 30 SMG was rated higher than OOT).

Re:Maybe we're the best at making games... (0)

Anonymous Coward | more than 6 years ago | (#21517407)

I think you're being a bit sensitive. Would you have cried arrogance if the same comment were made about the British or Japanese markets?

And in the framework of the article one single country will definitely excel above the others. We're not talking about quality but about quantity.

EA largely based in Canada? (1)

Piata (927858) | more than 6 years ago | (#21523717)

I thought EA was mostly based in Canada. There's a lot of great game companies in Canada (Bioware, Ubisoft's Montreal studios etc.) and I would never be so audacious as to say we have the best. Especially when there's a Wii sitting in my living room...

bubble burst (0)

Anonymous Coward | more than 6 years ago | (#21510571)

bubble bobble bursts bubbles.
Is it a paradox or a catch-22?
I think it is a Crysis.

Spin, spin, spin (1)

nomadic (141991) | more than 6 years ago | (#21510629)

In fact, the group found that the industry grew by an astonishing 17% between 2003-2006, some 13% faster than the general US economy.

That's astonishing? 13% faster in 3 years is actually kind of weak, considering the fact that the videogame industry is still maturing, the fact that games used to be just for kids, but now have a much bigger audience than they did even in the 90s.

Self-perpetuation (2, Funny)

arootbeer (808234) | more than 6 years ago | (#21510749)

Games Industry Growth Outpacing US Economy
A trend like this will continue until the economy stops growing at all, and all people do is either write games or play them.

Re:Self-perpetuation (1)

SwordsmanLuke (1083699) | more than 6 years ago | (#21510971)

Ooh, ooh! Can I volunteer to be in the second group?

Not that amazing, really... (3, Funny)

Lendrick (314723) | more than 6 years ago | (#21510843)

...seeing as how nowadays you can outpace the US economy just by not tanking.

its news stories like these.... (1)

emeraldfoxx (1193353) | more than 6 years ago | (#21510995)

that make me wish the economy was using a bartering system.

i mean, sure contributing 3.8 billion dollars to the U.S. GDP sounds like a lot.... but it wouldn't even hold a candle to someone saying:

"The video game industry contributed a whopping 3.8 billion 'chickens' toward the U.S. Gross Domestic Product."

Now thats a number that will raise some eyebrows!

Re:its news stories like these.... (2, Funny)

snowraver1 (1052510) | more than 6 years ago | (#21511277)

You have to use currency conversion in order to make that work.

Assuming an exchange rate of $10 to one chicken (the cost in the store, live chickens may be less, chicks SIGNIFICANTLY less.) The game industry would only be contributing a whopping 380 million chickens.

Now imaging batering in crickets. Crickets cost only $0.10! That would work out to 38 BILLION crickets. Now that is ALOT.

You could also go crazy and barter with something that has no value at all, like dog shit. Now you get an INFINATE amount of dog shit that you can bater with.

Re:its news stories like these.... (1)

snowraver1 (1052510) | more than 6 years ago | (#21511355)

Apperantly I can't type "Barter" Please forgive me /.

Re:its news stories like these.... (1)

kc2keo (694222) | more than 6 years ago | (#21511523)

what the fuck are you talking about?

Re:its news stories like these.... (1)

emeraldfoxx (1193353) | more than 6 years ago | (#21517139)

Now imaging batering in crickets

i dont know what kind of kinky stuff you do on a daily basis, but this sure isn't in my top ten :P

and yet... (2, Funny)

DragonTHC (208439) | more than 6 years ago | (#21511555)

most of us still can't break into the industry! go figure.

Move? (1)

tepples (727027) | more than 6 years ago | (#21511641)

most of us still can't break into the industry!
I've been told that the first step is to move to greater Seattle or another metropolitan area where multiple video game development studios are located. But some of us, even those with 4-year college degrees, either do not have the first idea about how to plan relocation or don't have enough savings.

Re:Move? (3, Funny)

Saige (53303) | more than 6 years ago | (#21512247)

You can do it my way.

Keep trying to find a position at Microsoft until you get one. Once you do, then they'll relocate you to the Seattle area. Spend a couple years on the team doing good work and befriending people on the Xbox team until positions open up. Start applying for them.

Here I am, working on the Xbox, and I love it. And now that I have experience in the game industry, it'll be a lot easier to continue to stay in it should I want to leave Microsoft.

Yes, I realize that to most people on /., the thought of working at MS is unpalatable. I'm just saying.

Re:and yet... (1, Interesting)

Anonymous Coward | more than 6 years ago | (#21513221)

Do yourself a favor and run as far away from the game industry as you can. It may look shiny and pretty but man-oh-man you get exploited worse than you ever could imagine. Here are some of the benefits: Low pay, long hours, guilt-slinging producers who look at you funny when you don't want to work 11+ hours everyday, Plus, you're most likely working on something that is a derivative to the nth degree, and based on a licensed property that you had no say in creating.

Basically, if you have artistic spirit then the game industry is not for you. If you don't mind wasting a good portion of your youth producing toys which are quickly forgotten then you might find some happiness working on games.

Yeah, I'm bitter, but it is also sad to watch 20-somethings get put through a meat grinder time and time again just because they have stars in their eyes when it comes to working in the industry.

Don't just take my word for it. Talk to anyone who has worked in the industry for longer than 5 (or so) years. Not many will tell you that they'd do it again.

Re:and yet... (1)

Grave (8234) | more than 6 years ago | (#21514853)

You seem to be confusing the general industry with EA. Also, if you want to do any job for the money, you're in the wrong business. You should do a job because you enjoy it. Is video game development easy? No, it's a lot of hard work and long hours, and if you're not willing to do that, why would you get into that kind of job?

Not everybody ends up working on derivative properties (though many certainly do), and not everybody ends up producing games that will be traded in after a couple months to buy the next year's iteration of the same game.

Re:and yet... (0)

Anonymous Coward | more than 6 years ago | (#21520243)

Also, if you want to do any job for the money, you're in the wrong business.

Eh? Why not work for free then? I'm not being facetious, I'm just following this logic to its conclusion.

Re:and yet... (1)

KDR_11k (778916) | more than 6 years ago | (#21524575)

EA is hardly the only company with horrible work conditions. Was it Sierra that got nailed for foprcing employees to falsify their time sheets so they don't get paid overtime?

and yet...Pie Dreams. (0)

Anonymous Coward | more than 6 years ago | (#21513511)

I think there's something called talent. Go figure.

Re:and yet... (1)

Parafilmus (107866) | more than 6 years ago | (#21514567)

I've worked in games for several years. Been on both sides of the interview desk.

To break in, you need a demo. It means more than anything on your resume, including your college degree.

Code a game. A simple game is fine, but it should be polished.

If you can't program, then make a demo using mod tools or Adventure Game Studio. Or create a really good 3D model.

If your demo is good, you'll get a job.

Sorry, but I gotta say... (2, Interesting)

Roager (1188827) | more than 6 years ago | (#21511637)

...this means nothing. The game industry is a subset of the US economy. (partially) This means that it balances out with industries that arent doing so well. (housing, for instance) Consider it like this:
If we take the average of five numbers: 3,4,5,6,7
average is 5
if we raise one number (the 4), we have: 3,5,5,6,7
the average is now 5.2
one number went up 25%
the average went up 4%
if the trend continues, but a different number (the 5) goes down, but half as fast, then we still have a net increase, but the number that started as 4 has a much higher rate of increase.

Re:Sorry, but I gotta say... (0)

Anonymous Coward | more than 6 years ago | (#21518221)

...and that's what it's all about.

Recession anyone? (0)

Anonymous Coward | more than 6 years ago | (#21511881)

I should hope so, since were in a recession if you take into account the value of the dollar.

What this really means (2, Funny)

c0d3h4x0r (604141) | more than 6 years ago | (#21512635)

More people are spending more time gaming and less time working :-)

Well yeah... (1)

bigwave111 (1046082) | more than 6 years ago | (#21521347)

How is the economy supposed to grow with all those people playing Halo 3 and WoW?

Sheesh, can't it go any faster?!?!? (1)

Impy the Impiuos Imp (442658) | more than 6 years ago | (#21524603)

The article continues, "But for the 43rd year, European economic growth was exceed by the video game industry, the general consumer electronics industry, the potato industry, the chalkboard industry, and the marischino cherry industry."
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