Games: From Donkey Kong to Dominance

By Gabe Zichermann, Guest Author

By now, I’m sure you’re familiar with the story of Pong, Atari and the founding of the modern videogame business. In the time before the Atari 2600’s ubiquitous brown box and its legions of cartridge-crazy followers, computer scientists and nerds had long toiled to bring games to the emerging technology platforms of the day. Nolan Bushnell’s brainchild wasn’t the first to create a digital game – not by a longshot; but it was the first to make games in the home an achievable, even desirable thing. And, as the iPod handily reminds us, desire can drive an entire nascent business from obscurity to fortune in the blink of an i.

With desire at its back, the videogame industry has come a long way since 1978 and the tireless efforts of pioneers like Atari, Nintendo and Sega, emerging as a global powerhouse of entertainment. Games in 2006 were a $32Bn business, with all the excitement and brand power of any other media, but with the added spice of a generation that prefers interactivity. In the last ten years alone, the games industry has become larger than first-run film, men 18-35 play more games than watch TV, and women over 40 have become the fastest growing segment of new players. The basic question of games’ media supremacy has changed from if to when.

The industry generally uses the following taxonomy and market sizes to refer to its various components:

US Market Sizing (2006)

* Overall US Market Size $ 15 Billion
* Console Game Software $ 6.6 Billion
* PC Games $ 970 Million
* MMOG/Virtual World Games $ 790 Million
* Casual Games $ 450 Million (Est)
* Funware/Social Games $ 10 Million (Est)

In this series, we’ll explore the history, current status and future promise of the interactive entertainment industry, as viewed through an entrepreneurial lens. There are additional parts of the business that we’re not going to cover here. These include arcade games, location-based entertainment (such as in amusement parks) and serious (training and educational) games. Although each of these categories is worthy of discussion, we’re going to focus on the more consumer and Internet-aligned sectors of the gaming business.

While it’s been many years since the sound of a school bell was a regular part of my life, I can clearly remember what it meant: freedom … to play Atari. Today’s generation of players may be more preoccupied with Nintendo Wii and World of Warcraft than Joust and Donkey Kong, but their desire to play remains the same. Lucky us.

This segment is a part in the series : Games