Paige Frick
Mr. Rueter
Econ
26 October 2014
The Economics of Video Games
Video games are one of America’s greatest pastime from children to adults. Over half of Americans own at least one console, from a Nintendo DS to an Xbox. There are so many different gaming consoles and so many platforms to play a game on. Many platforms exist, which include the more popular gaming consoles, like the Xbox, the computer, and the mobile device. Mobile gaming has become very popular as well, and at least every smartphone has a game or two on it. Apple’s app store makes millions on selling games, like Flappy Bird. Millions of copies of games are sold every year and it impacts the economy. From the early 2000’s, video game production and has increased greatly, and as more games are being sold because of how many people own consoles and how many games are being released. Although, many video games can be expensive, and the cost of all these video games piles up, people still buy the latest video game. As the demand of video games continues to increase, the supply also increases.
The impact that the video game community has on the economy is greater than one would think. The video game industry creates many jobs, which is a positive externality. In the United States more than 120,000 people are employed and earn salaries up to $90,000 a year. While other companies have been laying off their employees due to budget concerns, the video game industry has created more jobs in the past years. Youtube gamers also have a big role, too. Many gamers who upload content of themselves playing a new video game adds to the popularity of the certain game as well as Youtube gamers being able to make a living playing video games. This way of making a living encourages many people to put their content on the internet and promote the games.
According to the study “Video Games in the 21st Century: the 2010 Report”, video games have add almost 5 billion dollars to the United States economy back in 2009. Also, the study showed that the video game community’s growth rate from 2005 to 2009 was more than 10 percent; seven times the growth rate of the economy of the United States. California, being the state to produce the most video games and the state that is most involved in the community of gamers has greatly impacted the growth of the economy. California added $2.1 billion dollars to the United States economy. The revenue of the industry had doubled, and at the same time the United States Gross Domestic Product had only grown about 16 percent. Also, the industry had added almost $5 billion dollars to the Gross Domestic Product back in 2009. So, from an economic standpoint, the video gaming community really does impact the economy - producing employment opportunities and adding billions of dollars to the growing economy of the United States.
Works Cited
"The Entertainment Software Association." - Games: Improving the Economy. N.p., n.d. Web. 26 Oct. 2014.
"Video Games Impact the Economy More Than You Think." CNBC. N.p., n.d. Web. 26 Oct. 2014.
"Game Industry Adds Billions to U.S. Economy." Msnbc.com. N.p., n.d. Web. 26 Oct. 2014.
I found this very interesting how videos games give our economy a huge boost. I think video games are a little over priced and if they brought them down a little bit they would get more sales. Video games went from $30 for a new game, to a price of $60 per game which is a little over the top. This also stops many people from getting the latest game because of the skyrocketed prices. Overall I am happy to see how video games help our economy because they can be beneficial to anyone.
ReplyDeleteI've basically had every type of gaming console ever created from Atari to PlayStation 4 so I have experience with gaming, but it is crazy thinking about the money that gaming consoles bring into the economy. Over two million Xbox Ones and PlayStation 4's were sold in the first week of sales. That's a crazy amount of money being made because that's over $900 dollars made for a Xbox and PS4 that were sold. Also, I do watch gaming videos on YouTube and those people basically sponsor the gaming console or game and they get paid by YouTube for doing videos. Overall it was short but got the point out and it gave good information.
ReplyDeleteIt’s not surprising that video games are such an important part of the market today. However, it is amazing that it raked in over $5 billion! I play and own a lot of video games, so I can definitely see the understanding behind why people buy so many video games each year, to some extent. When people go overboard and buy every new release and new console that comes out, however, it is a bit excessive.
ReplyDeleteGaming systems are incredible for the economy, the demand for them is high and that makes it easy for them to price it so high. An xbox one was selling for $400 while the PS4 also sells for around $400. Both companies sold millions and millions of consoles and that is an insane amount of money.
ReplyDeleteWow this is a really eye opening post because I did not know the huge impact that the video game industry really had on the overall economy of the country. Especially in California where the video game industry has doubled over the past few years. It is quite amazing that even though video games can be so expensive people are so willing to purchase them, no matter what the cost. Overall good job on the post.
ReplyDeleteIt is our generation that really brought the world of gaming into the economy as a market. The level of popularity they have, as well as consumers, is all thanks to the increase in technology there has been over the last 100 years. Thinking about what economy back then was like opposed to the way it is now is one way we can judge the caliber of the video game market's success. It's great to see some of the data this piece has, and additional knowledge it has given me.
ReplyDeleteI never would have thought that video games would have ever helped the economy. I mean think about it there are so many studies going around about the violence in them coming into kids making them do bad things. But taking a step back on the possible bad things that video games can do, the money they bring in has to be a lot. If every person has a controller or game system, and every new game costs 15 dollars, buy just six games would be 100 dollars. Thinking of how many people play video games makes the money add up. Who new something we thought would be so bad for our children would help out our economy that much.
ReplyDeleteI never knew that video games did so much for our economy!? Thinking about the price of a new game and how many people get it the first day it comes out, they gain so much money because everyone always wants the newest game out there. I am sure if the producers brought the price down maybe to $40 or $50, they would have a lot more buyers. Knowing this from experience, I thought when I was younger, that $60 was outrageous! Now with all of these new platforms to play on, everyone has to re-buy their favorite games because they want to play it on their new console. Which again, is giving the producers a lot more money.
ReplyDeleteI always figured that video games had something to do with something other than fun... but I wouldn't have guessed that it was such a large impact on the economy. I also knew that YouTube gamers did get paid for doing something that they love but I did not know that they could make a decent living off of doing that. I think that you hit some really good points in this about the effects it has with the economy. But, however, I do believe that you bounced around with topics a little. Overall, this is a very will written piece and it did help a lot with the effects to the economy.
ReplyDeleteHey Paige! I love the view you chose on video games; being a video game lover myself I never thought of it in an economic standpoint. Now I have a completely different view on video games. However you could say that my video gaming experience does not necessarily help the economy. Being the 90's child that I am, I prefer the older means of gaming, my favorite example is the games played on the Nintendo 64. Personally I enjoy the greater interaction I seem to get out of these games than I do games today. Therefore I do not see a need for getting the latest gaming console or newest game--mainly because they stopped making games for the Nintendo 64. But I do still see the economic standpoint to video games. Very intriguing, nice job!
ReplyDeleteThis is a mediocre written piece. In the past video games were directly geared towards children and it did not make a big economic impact but now since more games are geared toward adults the video game industry is booming with the advances of technology. Especially now with social media it gives the video game industry a bigger platform to get their product out.
ReplyDeleteI think its great that you brought to light just how much the video game market is worth. It crazy to think that developers can make something out of practically nothing and put a 60 dollar pricetag on it! The amount of revenue generated in this market must be unbelievable, especailly for those games with a giant fan base such as Call of Duty or Halo. It really is awesome to think about how much videogames have contributed to the economy even just in the years of which we were growing up!
ReplyDeleteAnother interesting addition to this increase in widespread video games is that they are now more accessible to the public. Putting $500 into a console can be a pretty large barrier of entry to kids, especially when the game they'd want to play on it would be an additional $50. However now with the addition of online services such as Steam, many video games are being made playable right on your computer, eliminating the need for the console at all. Great for consumers and game producers, not so much for console producers.
ReplyDeleteVideo Games are one of those things where it is a very large monopolistic competition. Since many games can be substituted for others there is huge competition. Especially between the huge companies. Microsoft, Sony, Nintendo, Sega, Valve, Bungie and many more make millions or even billions from this industry, but can very easily lose it if their products aren't great. Most of this competition happens via the games themselves and less of the consoles. But still so much goes on in these industries that very few people see and it holds a grad chunk of the economy in america and the world
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