For years, the two major components of the gaming industry have been the console makers and game publishers. The biggest blockbuster games are still produced and distributed by the leading game publishing companies, and many are designed to be played on the leading game consoles connected to big television sets. At the same time, the emergence of game platforms on mobile devices and on social networks has expanded the game market and brought new game publishers into the field.

Console Makers

The video game console business is dominated by three major players—Nintendo, Sony, and Microsoft. Nintendo and Sony, both based in Japan, have had decades of experience with games (Nintendo) and electronics (Sony). Microsoft is the first and only U.S.-based company producing video game hardware, and only made its foray into gaming beginning in 2000.

Nintendo got its start manufacturing Japanese playing cards in 1889. After seventy-seven years, the playing card business was becoming less profitable, and Nintendo began venturing into toy production. By 1974, the toy business evolved into the company that distributed Magnavox’s Odyssey home video console. Nintendo would release its own video game console three years later. In the early 1980s, Nintendo had two major marketing successes. First, the company developed and released the very successful platform game Donkey Kong (1981), where players help “Jumpman” rescue “Lady” from the giant ape, Donkey Kong. Developed for multiple consoles, the video game was the Japanese company’s breakthrough into the U.S. console market. Second, Nintendo developed the Nintendo Entertainment System (NES) console, which reached U.S. markets in 1985 bundled with the Super Mario Bros. platform game. With this package, Nintendo set the standard for video game consoles, Mario and Luigi became household names, and Super Mario Bros. became the most successful video series for the next twenty-five years.

Sony, also headquartered in Japan, emerged after World War II as a manufacturer of tape recorders and radios (the name “Sony” is rooted in the Latin word sonus, meaning “sound”). Since then, Sony has been a major player in the consumer electronics industry, producing televisions, VCRs, computers, cameras, and, beginning in the mid-1990s, video game consoles. Their venture into video games came about because of a deal gone bad with Nintendo. Sony had been partnering with Nintendo to create an add-on device to Nintendo’s NES that would control music CDs (hence the name they proposed: “play station”). When the partnership fell through, Sony went into direct competition with Nintendo, launching the impressive PlayStation console in 1994 that doubled the microprocessor size introduced by Sega (from 16 bits to 32 bits) and played both full-motion and 3-D video. Described in the New York Times as the “CD-based video game machine,” PlayStation was also capable of playing music CDs—a nice retort to Nintendo.²⁹

Continuing the console battle, Nintendo released Nintendo 64 in 1996, a doubly powerful 64-bit microprocessor complete with even more realistic images and even clearer 3-D motion graphics. This launch created a buyer’s frenzy—for the Nintendo 64 as well as the Super Mario 64 game cartridge that launched with the console—dubbed by critics “the best video game ever.”³⁰ Meanwhile, other console makers such as Sega, Atari, and SNK were trying to compete, sometimes making incredible technological leaps, like Sega’s 128-bit Dreamcast, which came equipped with a built-in modem. Ultimately, these advancements were copied, and then overshadowed, by Nintendo and Sony products.

The main rivalry between Nintendo and Sony more or less resolved by 1997, with Nintendo claiming the children up to age fourteen market and Sony’s PlayStation becoming the console of choice for serious young adult gamers. By 1997, the newly broadened audience had created an impressive market for the video game industry worth $5.5 billion.³¹ PlayStation 2, released in 2000, heightened this trend. As a masterpiece in console engineering, and in alliance with third-party game publishers who were churning out the world’s most innovative titles (e.g., Call of Duty, Final Fantasy), PlayStation 2 would become the most successful console of all time.

And yet into this new world of serious gaming—so securely dominated by Sony PlayStation—came the computer software goliath, Microsoft. “The machine, called Xbox,” wrote New York Times technology writer John Markoff in 2000, “is both a technical tour de force by the world’s largest software publisher and a shot fired across the bow of the giant Sony Corporation, which now dominates the $20 billion video game industry.”³² The Xbox, which represented a $500 million commitment from Microsoft, had many firsts: the first console to feature a built-in hard disk drive; the first to be connected to an online service (Xbox LIVE); and the first to have Dolby Digital sound, for a cinematic sound experience. While Xbox could not offer the arsenal of games that PlayStation gamers had access to, the console did launch with one particular game, Halo. Game critics and players immediately recognized this sci-fi first-person shooter game—now a multibillion dollar franchise—as Microsoft’s “killer app.”³³ (See “What Microsoft Owns,” at right.)

Today, Sony’s PlayStation4 (2013), Microsoft Xbox One (2013), and Nintendo Wii (2006) are the leading consoles, providing the most creative, interactive, hyperrealistic, and stimulating entertainments.

Game Publishers

As the video game industry moves away from consoles and toward browsers, smartphones, and tablets, game publishers have had to adapt to new technological innovations and predict future media trends, all while still offering good gameplay and stories. In some cases, the game-console makers are also the game publishers (sometimes making the game proprietary, meaning it only plays on that company’s system). For example, Microsoft famously published its Halo game series to drive sales of the Xbox. Similarly, Sony publishes the Uncharted game series just for PlayStation, and Nintendo publishes The Legend of Zelda series solely for its gaming platforms.

More often, game publishers are independent companies, distributing games that play across multiple platforms. Sometimes the publishers are also the developers of the game—the people who write the actual code for the game. But publishers may also be just the distributors for the game developers (similar to how film studios may distribute the work of independent filmmakers). Two leading independent game publishing companies, Activision Blizzard and Electronic Arts, have been particularly good at adaptation and innovation, producing the most imaginative and ambitious titles, and selling the most games across multiple platforms. Zynga and Rovio are two other major players, respectively dominating in social gaming and mobile gaming.

Activision Blizzard was created through the merging of Activision and Vivendi’s Blizzard division in 2008. One half of the company—Activision—got its start in the 1970s as the first independent game developer and distributor, initially providing games for the Atari platform (before Activision, console makers like Atari created only proprietary games for their own systems). Activision was unique in that it rewarded its developers with royalty payments and name credits on game box covers, something that hadn’t yet been considered by other game publishing companies, who kept their developers anonymous. As a result, top game designers and programmers migrated to Activision, and Activision began to produce a number of top-selling games, including the X-men series (2000– ); Call of Duty series (2003– ); and Guitar Hero (2006–2011).

Meanwhile, Blizzard Entertainment, established in 1991 as an independent game publisher, has three famous franchises in game publishing: Diablo (1996– ), StarCraft (1998– ), and World of Warcraft (2001– ). Dedicated, as they say in their mission statement, to “creating the most epic entertainment experiences … ever,”³⁴ and known for their obsession with game quality, artistic achievement, and commitment to their fans, Blizzard has dominated in real-time strategy games, and remains one of the most critically acclaimed game publishers in the world. As one company, Activision Blizzard has become a publishing giant in the industry.

Electronic Arts (EA) got its name by recognizing that the video game is an art form and that software developers are indeed artists; the name “Electronic Arts” is also a tribute to the United Artists film studio, established in 1919 by three actors and one director—Charlie Chaplin, Mary Pickford, Douglas Fairbanks, and D. W. Griffith—who broke away from the studio-dominated film industry. Operating under the same principle that Activision pioneered—of recognizing game developers on the package and paying them high royalty fees—EA was able to secure a stable of top talent and begin producing a promising lineup of titles: Archon, Pinball Construction Set, M.U.L.E., Seven Cities of Gold, The Bard’s Tale, Starflight, and Wasteland.

The company’s big breakthrough, though, was signing a contract with Super Bowl–winning coach and television football commentator John Madden in 1984. The game, John Madden Football, was released in 1988, with annual versions coming out every year since 1990. This became the modus operandi for EA: create a popular game (or more typically, buy the company that produces the popular game) and then create annual updates until the game stops selling. The Madden series has become a billion-dollar enterprise, and EA has since developed a reputation for specializing in sports games with such series as FIFA (soccer) and NASCAR (racing). EA also struck gold with Battlefield, Crysis, Rock Band, Mass Effect, and Dragon Age: Origins.

Unlike Activision Blizzard, EA has quickly moved toward mobile and social gaming platforms. Electronic Arts acquired PopGames, the company that produces both Bejeweled and Plants vs. Zombies, as well as other social media gaming startups, and has more than 107 iPhone game apps and 22 Android game apps for direct download. The company has also sought to compete directly with Activision Blizzard’s World of Warcraft series by developing (through its Canadian subsidiary, BioWare) the lavish new MMORPG game, Star Wars: The Old Republic (2012), the most expensive game made to date, with a price tag approaching $200 million.³⁵

One of the newest major game publishers, Zynga, was established in 2007 and specializes in casual games. FarmVille, Draw Something, Zynga Poker, and Hidden Chronicles are among its hit games. But in recent years, Zynga’s games on the Facebook platform have lost players to competing developers like King (Candy Crush Saga, Bubble Witch Saga) and Wooga (Diamond Dash, Bubble Island ).³⁶ Zynga’s next step is developing games for mobile devices to decrease its reliance on Facebook.

The most well-known developer and publisher of games for mobile devices is Rovio, founded in Finland in 2003. In 2010, Rovio’s Angry Birds became an international phenomenon as millions of players downloaded the game on touchscreen devices for the chance to slingshot-launch birds at pigs hiding in increasingly complex structures. By 2012 (as Rovio released Angry Birds Space), the downloads of all of the company’s Angry Birds titles reached a billion.³⁷ Like Zynga, Rovio is looking to diversify, and brought Angry Birds to Facebook in 2012.

Other top game publishers around the world include Square Enix (Deus Ex, Final Fantasy), Ubisoft (Assassin’s Creed, Rayman), Sega (Sonic the Hedgehog, Super Monkey Ball), THQ (Saints Row, Red Faction), and Namco Bandia (Dark Souls, TEKKEN ).