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 Feature Industry Articles 
Thursday, September 18 2014
Going Beyond the Arcade - The Video Game Industry Today and Tomorrow

By Rachel Selsky, AICP, Senior Economic Development Specialist

Can you remember back to the first video game you played? Was it Tetris? Super Mario Brothers? Angry Birds? What used to be considered child’s play has transitioned into a regular aspect of nearly everyone’s lives, and the demand for newer, faster, and more realistic games is only growing. Nearly 70 percent 1 of American households play video games. With close ties to both the creative and multimedia economies the video game industry is becoming more and more important. This article summarizes the history and trends of the industry and offers ideas on how a community can best attract and grow its video game industry.

With the release of Pong in 1972, game manufacturer Atari spawned the video game industry. Pong was most commonly played in an arcade on a large upright console and was the first game to gain mainstream success and popularity. Since then, the video game industry has seen transformation largely driven by technological innovation. While originally children were the primary market for video games, as the industry matured, so has the age of gamers, with an average age today of 31. 2

Since the days of Pong and Tetris, thousands of video games have been released, and the industry has developed into one of the most significant contributors to the “creative economy,” rivaling the film industry in total revenue. In fact, research conducted by PricewaterhouseCoopers reports that the international digital games entertainment industry was projected to reach $86.4 billion in 2014, three times as large as the music industry. In the United States, the game industry reports sales of approximately $15.1 billion and is growing much faster than the rest of the economy.3 In 2010, the U.S. computer and video game software publishing industry employed over 32,000 people with annual growth of over eight percent.

The increasing jobs and sales in the video game industry is tied to the diversification of the industry as a whole, and the fact that video gaming technology has been incorporated into many different aspects of our lives. Here are just three examples of how video game technology has influenced our lives.

Health. A primary concern related to video gaming is that it is not an active way for children and adults to spend their time. The video game industry has combated this image by developing games that are designed to get the user moving and enjoying exercise. Even the President’s Council on Fitness, Sports and Nutrition has recognized “the need to embrace technology in the fight against childhood obesity.”5

Training. Video game and virtual reality technology has been incorporated into a wide variety of training including virtual reality technology that allows pilots, military personnel, police officers, and surgeons to go through their processes as though it was a real situation. This type of training provides trainees with a more realistic scenario and gives them the opportunity to fail in a safe and forgiving environment.

Edutainment. Games are now also designed to act as educational systems for children. The idea is that games are fun, making for a perfect platform to teach math and reading.6

Another trend in the video game industry is the recognition that women are an important, if currently underrepresented, segment of the gaming community. Historically, games have been male-centric with violent, graphic, and sometimes sexist material, all characteristics that do not appeal to many women. However, there has been a shift for some developers to create more characters that transition away from negative, highly sexualized, and stereotyping images of women.

Nintendo, for one, has banned violent or sexist material for products played on Wii devices.7 Female game developers are also starting to break into the industry including the group SieEnt, a team of game developers that create video games “for women who want to change the world.” The International Game Developers Association also has a special interest group for women with a mission to “create a positive impact on the game industry with respect to gender balance in the workplace and the marketplace.”

With all this growth and change in the video game industry, it is only normal for economic developers to begin to consider whether it would be a good fit for their attraction efforts. The following is a summary of some of the site selection factors that are important for the video game industry.

Workforce Skills. What is unique about the video game industry is that it exists at a cross-section of technology and art, and the workforce must reflect this. The jobs fall into three major categories (1) creative, (2) technical, and (3) business. The development of a game can require work from hundreds of employees including those with skills and talent in programming, software development, application design, graphic design, sales, management, and usability testing. Companies want to be where there are deep talent pools of these skills. In addition to the technical skills, employees of the video game industry must be skilled at working in teams under the direction of a lead designer. Specific occupations within the industry include animators, writers, voice actors, musicians, software developers, coders, and engineers. Most of the occupations in this industry require a college degree.8

Higher Education. Access to, coordination with, and support from academic institutions is also a major factor for the video game industry. Educational programs specific to the video game industry are being developed around the country, such as the program at George Mason University that offers courses on video game history and theory, computer programing, digital arts and graphics, and motion capture. With educational programs like this popping up around the country, the video game industry has begun to shift away from Silicon Valley to take advantage of the talent that is being trained elsewhere.9

Technology Access. Access to best-in-class broadband is essential to being able to attract the video game industry, and that means one gigabit (1,000 megabits) per second internet speed for all businesses and residents. Employees of the video game industry want this type of access in their homes as well as at work, so all digital infrastructure needs to be redundant, reliable, and fast. St. Louis, MO, is one area that has one gig access and has started to become well known for its emerging video game industry with newer firms developing “quick-to-market” apps for smartphones and tablets.10 For reference, the U.S. average download rate is 25.6 megabits per second for households and as a country ranks 29th in the world.11

Incentive Programs. As in many industries, incentives play a large role in helping to attract, grow, and retain the video game industry. An interesting case of this is Montreal, which was not an early leader in the industry, but as a result of a government commitment to support workforce development, it is now home to one of the largest video game clusters in the world. The government established Multimedia City where it committed to paying 25 percent of employees’ wages for companies within the targeted industries. This incentive, combined with the low-cost/highly-creative aspect of the culture helped to brand the City as being a center for the multimedia and gaming industry and attract some of the largest video game companies in the world including Ubisoft and Electronic Arts.12

Quality of Life & Networks. Having active local chapters of national and international video game associations can make a place more appealing to someone looking to establish a new video game company who is in need of technical support and assistance. An example of this is the Minneapolis/Saint Paul chapter of the International Game Developer Association, which holds monthly meetings and helps gamers network within the region.

The video game industry is extremely fast paced, with many design and technological advances since the early days of Pong. For communities looking to grow or support the video game industry, the important factors on which to focus are access to broadband and creating an environment that is attractive and nurturing to creative professionals.

Thank you to Eugene Evans, CEO of GOPOP.TV for assisting me with this article.

About the Author:
Rachel Selsky has been working in the field of economic development for six years with a particular focus on strategic planning, industry analysis and impact studies. Currently, Rachel is a Senior Economic Development Specialist at Camoin Associates, an economic development firm based in Saratoga Springs, NY. At Camoin Associates, Rachel is project manager on a wide variety projects including the completion of community and economic development strategic plans, market analyses, meeting facilitation and community consensus building, tax credit program administration and technical assistance, grant writing/administration, and community consolidation studies.

Prior to working for Camoin Associates Rachel attended the University at Albany and received a Masters Degree in Urban and Regional Planning. In addition to a Masters degree, Rachel is certified through the American Planning Association, the National Charrette Institute, and is working towards receiving certification through the International Economic Development Council. Rachel's background also includes facilities planning for the New York State Department of Corrections as well as work with the Planning Bureau of the New York State Office of Parks, Recreation and Historic Preservation. Rachel also holds a Bachelor of Arts in Urban Studies and Planning from the University at Albany. Rachel is an active member of the Northeastern Economic Developers Association and the Southeastern Vermont Young Professionals organization. Rachel lives in Brattleboro, Vermont and is Vice President of the Board of Directors for the Youth Services of Windham County non-profit organization, an organization dedicated to helping young kids and families thrive in southeastern Vermont.

Bibliography (n.d.).

Beller, P. (2009, July 6). Female Gamers on the Rise. Forbes. Retrieved from

Bureau of Labor Statistics. (2011, Fall). Work for Play: Careers in video game development. Occupational Outlook Quarterly, pp. 3-10.

Entertainment Software Association. (2014). Essential Facts About the Computer and Video Game Industry. Entertainment Software Association.

Feldt, B. (2014, February 24). Why St. Louis' Game Industry is Surging. St. Louis Business Journal. Retrieved July 6, 2014, from

Game Design Major. (n.d.). Retrieved from Champlain College:

Hobbs, H. (2010, April 29). New video game design degree popular at GMU. The Washington Post.

Madsen, R. (2012, July 23). IDGA Perspectives Newsletter. Retrieved from IndieSpective: What Are you Kids Learning?!:

Massachusetts Digital Games Insitute Steering Committee. (2011).Getting in the Game: A Plan to Establish the Massachusetts Digital Games Insitute. Boston: Massachusetts Digital Games Insitute Steering Committee.

Pilon, S., & Tremblay, D.-G. (2013). The Geography of Clusters: The Case of the Video Game Clusters in Montreal and Los Angeles. Urban Studies Research. Retrieved June 12, 2014, from

Siwek, S. E. (2010). Video Games in the 21st Century. Retrieved June 12, 2014, from

United States Household Download Index. (2014). Retrieved July 18, 2014, from Ookla:,1/United-States/

Wilkie, C. (2012, April 30). Obama Administration Joins Video Game Industry in Fitness Challenge. Retrieved from Huffington Post:


  1 (Massachusetts Digital Games Insitute Steering Committee, 2011)
  2 (Entertainment Software Association,  2014)
  3 (Massachusetts Digital Games Insitute Steering Committee, 2011)
  4 (Siwek, 2010)
  5 (Wilkie, 2012)
  6 (Madsen, 2012)
  7 (Beller, 2009)
  8 (Bureau of Labor Statistics, 2011)
  9 (Hobbs, 2010)
10 (Feldt, 2014)
11 (United States Household Download  Index, 2014)
12 (Pilon & Tremblay, 2013)

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