They often finance the development, sometimes by paying avideo game developer (the publisher calls thisexternal development) and sometimes by paying an internal staff of developers called astudio.[1] The large video game publishers alsodistribute the games they publish, while some smaller publishers instead hire distribution companies (or larger video game publishers) to distribute the games they publish. Other functions usually performed by the publisher include deciding on and paying for anylicenses that are used by the game; paying forlocalization; layout, printing, and possibly the writing of the user manual; and the creation of graphic design elements such as the box design. Some large publishers with vertical structure also own publishing subsidiaries (labels).
Large publishers also attempt to boost efficiency across all internal and external development teams by providing services such assound design and code packages for commonly needed functionality. Because the publisher often finances development, they usually try to manage development risk along with a staff ofproducers orproject managers to monitor the developer's progress, critique ongoing development, and assist as necessary. Most video games created by an external video game developer are paid for with periodic advances on royalties. These advances are paid when the developer reaches certain stages of development, calledmilestones.
In recent years, the rise of digital distribution platforms such asSteam and console-based online stores has somewhat reduced the impact of seasonal sales cycles, allowing publishers to release titles throughout the year rather than focusing solely on the holiday period.[2]
The industry has become increasingly "hit-driven" over the past decade, meaning that a small number of best-selling titles account for a large share of total revenue.[3][4][5]
Consumers tend to purchase the most heavily marketed titles rather than those of highest quality, resulting in fewer sales for other games within the same genre. This dynamic has contributed to rising development budgets, as publishers compete to dominate key market segments. It has also encouraged the prioritization of sequels to successful franchises over new intellectual properties, a trend for which publishers such asActivision Blizzard andElectronic Arts have faced criticism.[6][7][8]
Current generation consoles have more advanced graphic capabilities than previous consoles. Taking advantage of those capabilities requires a larger team-size than games on earlier, simpler consoles. In order to compete with the best games on these consoles, there are more characters to animate; all characters must bemodeled with a higher level of detail; more textures must be created; the entireart pipeline must be made more complex to allow the creation ofnormal maps and more complex programming code is required to simulate physics in the game world, and to render everything as precisely and quickly as possible. On this generation of consoles, games commonly require budgets ofUS$15 million to $20 million. Activision'sSpider-Man 3, for example, cost US$35 million to develop, not counting the cost of marketing and sales.[9] Every game financed is, then, a large gamble, and pressure to succeed is high.
Contrasting with the big budget titles increased expense of "front-line" console games is thecasual game market, in which smaller, simpler games are published for PCs and as downloadable console games. Also, Nintendo'sWii console, though debuting in the same generation as the PlayStation 3[10] and the Xbox 360,[11] requires a smaller development budget, as innovation on the Wii is centered around the use of theWii Remote and not around the graphics pipeline.
When publishing forgame consoles, game publishers take on the burden of a great deal ofinventory risk. All significant console manufacturers since Nintendo with itsNES (1985) have monopolized the manufacture of every game made for their console and have required all publishers to pay aroyalty for every game so manufactured. This royalty must be paid at the time of manufacturing, as opposed to royalty payments in almost all other industries, where royalties are paid upon actual sales of the product—and, importantly, are payable for games that did not sell to a consumer. So, if a game publisher orders one million copies of its game, but half of them do not sell, the publisher has already paid the full console manufacturer royalty on one million copies of the game and has to absorb that cost.[citation needed]
AAA game publishers produce and create games that are high budget and groundbreaking. They are advanced in technology and forward the boundaries of technology and creativity in the video game world. AAA game publishers often produce popular and blockbuster games. These publishers have the financial resource and means to fund large game development projects. These publishers implement and fundmarketing anddistribution to guarantee reach and exposure for their games.[12] With their funds to market they are able to advertise and reach a wider consumer pool and have access to distribute to a big network. Although they have creative constraints within game development and marketing, they often focus and follow market trends. They have a higher demand to attain commercial success. Examples of AAA video game publishers areElectronic Arts,Ubisoft, andActivision.[13]
Indie game publishers are companies that work with independent developers. Their focus is on developing games that promotes creativity and originality. Developers have creative control over their games. These publishers implement intimate collaborations between the publishers and the developers. Often stand out in the video game market due to the more unique genres.[14] Indie game publishers have restrict marketing budgets and have small audience reach and visibility.[15] Examples of Indie video game publishers areDevolver Digital,Annapurna Interactive andRaw Fury.[13]
Mobile game publishers produce and specialize in video games on smartphones and tablet devices. They take advantage of the widespread appeal and rise of mobile gaming. These publishers enhance games for touch based interfaces and devices.[16] They are proficient in designing monetization tactics for mobile platforms. Mobile game publishers have a comprehensive understanding of the mobile gaming market. They have proficiency in strategies for engagement and user acquisition for mobile sites. For mobile gaming there is access through app stores for distribution channels. There are obstacles with monetization due to lack of in-app purchase andfree-to-play(F2P) models. Examples of Mobile game publishers areSupercell,King, andZynga.[17]
Numerous video game publishers are traded publicly onstock markets. As a group, they have had mixed performance. At present,Electronic Arts is the only third-party publisher present in theS&P 500 diversified list of large U.S. corporations; in April 2010, it entered theFortune 500 for the first time.[18]
Hype over video game publisher stocks has been breathless at two points:
In the early 1990s, the introduction ofCD-ROM computer drives causedhype about amultimedia revolution that would bring interactive entertainment to the masses. SeveralHollywoodmovie studios formed "interactive" divisions to profit in this allegedly booming new media.[19] Most of these divisions later folded after expensively producing several games that were heavy in "full-motion video" content, but light in the quality of gameplay.
In theUnited States, revenue from the sales of video and computer games exceeded revenue fromfilm box-office receipts for the first time in thedot-com days of the late 1990s, when technology companies in general were surrounded byhype. The video game publishers did not, however, experience the same level of rise in stock prices that many dot-com companies saw. This was probably because video game publishing was seen as a more mature industry whose prospects were fairly well understood, as opposed to the typical exciting dot-com business model with unknown but possibly sky-high prospects. While many technology stocks were eventually destroyed in the dot-com crash in the early 2000s, the stock prices of the video game publishers recovered as a group; several of the larger publishers such as EA andTake-Two Interactive achieved historical highs in the mid-2000s.
^Nieborg, David B. (2021). "9. How to Study Game Publishers: Activision Blizzard's Corporate History".Game Production Studies. pp. 179–196.
^abTran, Binh (2023-07-17). "Types of Game Publishers: The Major Players in Game Publishing?".Gamespublisher.com. Retrieved 2023-11-07.
^Heineman, David S. (2015).Thinking about Video Games: Interviews with the Experts. Indiana University Press. ISBN 978-0-253-01715-4.
^Johnson, Lindy L.; DeBoeser, Elizabeth (2017). "Review of Inside, Playdead".Journal of Adolescent & Adult Literacy.61 (3): 340–341.ISSN 1081-3004.
^Steirer, G., & Barnes, J. (2019). Angry Birds: Mobile Gaming. In M. T. Payne & N. B. Huntemann (Eds.),How to Play Video Games (Vol. 1, pp. 216–223). NYU Press.http://www.jstor.org/stable/j.ctv12fw8tn.30
^Tran, Binh (2023-07-17). "Types of Game Publishers: The Major Players in Game Publishing?".Gamespublisher.com. Retrieved 2023-11-07
