Video game publisher
Encyclopedia
A video game publisher is a company that publishes
video games that they have either developed internally or have had developed by a video game developer
.
As with book publishers or publishers of DVD
movies, video game publishers are responsible for their product's manufacturing
and marketing
, including market research
and all aspects of advertising
.
They usually finance the development, sometimes by paying a video game developer
(the publisher calls this external development) and sometimes by paying an internal staff of developers called a studio.
The large video game publishers also distribute
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 any license
that the game may utilize; paying for localization
; layout, printing, and possibly the writing of the user manual; and the creation of graphic design elements such as the box design.
Large publishers may also attempt to boost efficiency across all internal and external development teams by providing services such as sound design and code packages for commonly needed functionality.
Because the publisher usually finances development, it usually tries to manage development risk with a staff of producers
or project managers
to monitor the progress of the developer, 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, called milestone
s.
:
s. As a group, they have had mixed performance. At present, Electronic Arts
is the only third-party publisher present in the S&P 500
diversified list of large U.S. corporations; in April 2010, it entered the Fortune 500
for the first time.
Hype over video game publisher stocks has been breathless at two points:
in October 2010, in order from the 2009 rankings with exception of the new publishers to the list and ones that did not make the 2010 list. Note that this is not a ranking by revenue, but of the quality of experience of working with the publishers according to staff, and some video game development companies
. Atari
, LucasArts
and MTV Games have been bumped off the list. Nexon
, Valve Corporation
and Zynga
are on the list for the first time. Bethesda Softworks
is now listed as ZeniMax Media
.
Publishing
Publishing is the process of production and dissemination of literature or information—the activity of making information available to the general public...
video games that they have either developed internally or have had developed by a video game developer
Video game developer
A video game developer is a software developer that creates video games. A developer may specialize in a certain video game console, such as Nintendo's Wii, Microsoft's Xbox 360, Sony's PlayStation 3, or may develop for a variety of systems, including personal computers.Most developers also...
.
As with book publishers or publishers of DVD
DVD
A DVD is an optical disc storage media format, invented and developed by Philips, Sony, Toshiba, and Panasonic in 1995. DVDs offer higher storage capacity than Compact Discs while having the same dimensions....
movies, video game publishers are responsible for their product's manufacturing
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
and marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
, including market research
Market research
Market research is any organized effort to gather information about markets or customers. It is a very important component of business strategy...
and all aspects of advertising
Advertising
Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...
.
They usually finance the development, sometimes by paying a video game developer
Video game developer
A video game developer is a software developer that creates video games. A developer may specialize in a certain video game console, such as Nintendo's Wii, Microsoft's Xbox 360, Sony's PlayStation 3, or may develop for a variety of systems, including personal computers.Most developers also...
(the publisher calls this external development) and sometimes by paying an internal staff of developers called a studio.
The large video game publishers also distribute
Distribution (business)
Product distribution is one of the four elements of the marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user.The other three parts of the marketing mix are product, pricing,...
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 any license
License
The verb license or grant licence means to give permission. The noun license or licence refers to that permission as well as to the document recording that permission.A license may be granted by a party to another party as an element of an agreement...
that the game may utilize; paying for localization
Internationalization and localization
In computing, internationalization and localization are means of adapting computer software to different languages, regional differences and technical requirements of a target market...
; layout, printing, and possibly the writing of the user manual; and the creation of graphic design elements such as the box design.
Large publishers may also attempt to boost efficiency across all internal and external development teams by providing services such as sound design and code packages for commonly needed functionality.
Because the publisher usually finances development, it usually tries to manage development risk with a staff of producers
Game producer
A video game producer is the person in charge of overseeing development of a video game.The earliest documented use of the term producer in games was by Trip Hawkins, who established the position when he founded Electronic Arts in 1982...
or project managers
Project management
Project management is the discipline of planning, organizing, securing, and managing resources to achieve specific goals. A project is a temporary endeavor with a defined beginning and end , undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value...
to monitor the progress of the developer, 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, called milestone
Milestone (Project management)
Within the framework of project management, a milestone is the end of a stage that marks the completion of a work package or phase, typically marked by a high level event such as completion, endorsement or signing of a deliverable, document or a high level review meeting.In addition to signaling...
s.
Business risks
As businesses go, video game publishing is associated with high riskRisk
Risk is the potential that a chosen action or activity will lead to a loss . The notion implies that a choice having an influence on the outcome exists . Potential losses themselves may also be called "risks"...
:
- The ChristmasChristmasChristmas or Christmas Day is an annual holiday generally celebrated on December 25 by billions of people around the world. It is a Christian feast that commemorates the birth of Jesus Christ, liturgically closing the Advent season and initiating the season of Christmastide, which lasts twelve days...
selling season accounts for about half of the industry's yearly sales of video and computer games, leading to a concentrated influx of high-quality competition every year in every game category, all in the fourth quarter of the year.
- Product slippage is very common due to the uncertain schedules of software development. Most publishers have suffered a "false launch", in which the development staff assures the company that game development will be completed by a certain date, and a marketingMarketingMarketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
launch is planned around that date, including advertising commitments, and then after all the advertising is paid for, the development staff announces that the game will "slip", and will actually be ready several months later than originally intended. When the game finally appears, the effects among consumers of the marketing launch—excitement and "buzz" over the release of the game and an intent to purchase— have dissipated, and lackluster interest leads to weak sales. An example of this is the PSP version of Spider-Man 3. These problems are compounded if the game is supposed to ship for the Christmas selling season, but actually slips into the subsequent year. Some developers (notably idId SoftwareId Software is an American video game development company with its headquarters in Richardson, Texas. The company was founded in 1991 by four members of the computer company Softdisk: programmers John Carmack and John Romero, game designer Tom Hall, and artist Adrian Carmack...
and EpicEpic GamesEpic Games, Inc., also known as Epic and formerly Epic MegaGames, is an American video game development company based in Cary, North Carolina. Its most recent success has been the Gears of War series of games, although it is also known for its Unreal Engine technology. It is the parent company of...
) have alleviated this problem by simply saying that a given game will be released "when it's done", only announcing a definite date once the game is released to manufacturing. However, this sometimes can be problematic as well, as seen with Duke Nukem ForeverDuke Nukem ForeverDuke Nukem Forever is a 2011 first-person shooter video game for Microsoft Windows, Mac OS X, PlayStation 3 and Xbox 360 developed by 3D Realms and Triptych Games and finished by Gearbox Software and Piranha Games...
.
- There is a consensus in the industry that it has increasingly become more "hit driven" over the past decade. Consumers buy the game that's best-marketed but not necessarily of the highest quality, therefore buying fewer other games in that genre. This has led to much larger game development budgets, as every game publisher tries to ensure that its game is #1 in its category.
- Games are becoming more expensive to produce. The current generation consoles, particularly the PlayStation 3PlayStation 3The is the third home video game console produced by Sony Computer Entertainment and the successor to the PlayStation 2 as part of the PlayStation series. The PlayStation 3 competes with Microsoft's Xbox 360 and Nintendo's Wii as part of the seventh generation of video game consoles...
and Xbox 360Xbox 360The Xbox 360 is the second video game console produced by Microsoft and the successor to the Xbox. The Xbox 360 competes with Sony's PlayStation 3 and Nintendo's Wii as part of the seventh generation of video game 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 be modeled with a higher level of detail; more textures must be created; the entire art pipelineArt pipelineThe art pipeline is a term used to describe the entire process of creating and implementing art for a particular project, most commonly associated with the creative process for developing video games...
must be made more complex to allow the creation of normal mapsNormal mappingIn 3D computer graphics, normal mapping, or "Dot3 bump mapping", is a technique used for faking the lighting of bumps and dents. It is used to add details without using more polygons. A common use of this technique is to greatly enhance the appearance and details of a low polygon model by...
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 of USUnited States dollarThe United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
$15 million to $20 million. Activision's Spider-Man 3Spider-Man 3 (video game)Spider-Man 3 is an action game loosely based on the Spider-Man 3 film and released for the Xbox 360, PlayStation 3, PlayStation 2, Wii, PlayStation Portable, Nintendo DS, Microsoft Windows and Game Boy Advance. The Xbox 360 and PS3 versions were developed by Treyarch, the PC version by Beenox while...
, for example, cost US$35 million to develop, not counting the cost of marketing and sales. Every game financed is, then, a large gamble, and pressure to succeed is high.
- Contrasting with the increased expense of "front-line" AAA console games is the casual gameCasual gameA casual game is a video game targeted at or used by a mass audience of casual gamers. Casual games can have any type of gameplay, and fit in any genre. They are typically distinguished by their simple rules and lack of commitment required in contrast to more complex hardcore games...
market, in which smaller, simpler games are published for PCs and as downloadable console games. Also, Nintendo's WiiWiiThe Wii is a home video game console released by Nintendo on November 19, 2006. As a seventh-generation console, the Wii primarily competes with Microsoft's Xbox 360 and Sony's PlayStation 3. Nintendo states that its console targets a broader demographic than that of the two others...
console, though debuting in the same generation as the Playstation 3 and the Xbox 360, requires a smaller development budget, as innovation on the Wii is centered around the use of the Wii RemoteWii RemoteThe , also known as the Wiimote, is the primary controller for Nintendo's Wii console. A main feature of the Wii Remote is its motion sensing capability, which allows the user to interact with and manipulate items on screen via gesture recognition and pointing through the use of accelerometer and...
and not around the graphics pipeline.
- When publishing for game consoles, game publishers take on the burden of a great deal of inventoryInventoryInventory means a list compiled for some formal purpose, such as the details of an estate going to probate, or the contents of a house let furnished. This remains the prime meaning in British English...
risk. All significant console manufacturers since Nintendo with its NESNintendo Entertainment SystemThe Nintendo Entertainment System is an 8-bit video game console that was released by Nintendo in North America during 1985, in Europe during 1986 and Australia in 1987...
(1985) have monopolized the manufacture of every game made for their console, and have required all publishers to pay a royaltyCopyrightCopyright is a legal concept, enacted by most governments, giving the creator of an original work exclusive rights to it, usually for a limited time...
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.
Investor interest
Numerous video game publishers are traded publicly on stock marketStock market
A stock market or equity market is a public entity for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.The size of the world stock market was estimated at about $36.6 trillion...
s. As a group, they have had mixed performance. At present, Electronic Arts
Electronic Arts
Electronic Arts, Inc. is a major American developer, marketer, publisher and distributor of video games. Founded and incorporated on May 28, 1982 by Trip Hawkins, the company was a pioneer of the early home computer games industry and was notable for promoting the designers and programmers...
is the only third-party publisher present in the S&P 500
S&P 500
The S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock...
diversified list of large U.S. corporations; in April 2010, it entered the Fortune 500
Fortune 500
The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 U.S. closely held and public corporations as ranked by their gross revenue after adjustments made by Fortune to exclude the impact of excise taxes companies collect. The list includes publicly and...
for the first time.
Hype over video game publisher stocks has been breathless at two points:
- In the early 1990s, the introduction of CD-ROMCD-ROMA CD-ROM is a pre-pressed compact disc that contains data accessible to, but not writable by, a computer for data storage and music playback. The 1985 “Yellow Book” standard developed by Sony and Philips adapted the format to hold any form of binary data....
computer drives caused hype about a multimediaMultimediaMultimedia is media and content that uses a combination of different content forms. The term can be used as a noun or as an adjective describing a medium as having multiple content forms. The term is used in contrast to media which use only rudimentary computer display such as text-only, or...
revolution that would bring interactive entertainment to the masses. Several Hollywood movie studioMovie studioA movie studio is a term used to describe a major entertainment company or production company that has its own privately owned studio facility or facilities that are used to film movies...
s formed "interactive" divisions to profit in this allegedly booming new media. 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 the United StatesUnited StatesThe United States of America is a federal constitutional republic comprising fifty states and a federal district...
, revenue from the sales of video and computer games exceeded revenue from filmFilmA film, also called a movie or motion picture, is a series of still or moving images. It is produced by recording photographic images with cameras, or by creating images using animation techniques or visual effects...
box-office receipts for the first time in the dot-comDot-com bubbleThe dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
days of the late 1990s, when technology companies in general were surrounded by hype. 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 and Take2Take-Two InteractiveTake-Two Interactive Software, Inc. is a major American publisher, developer, and distributor of video games and video game peripherals. Take-Two wholly owns 2K Games and Rockstar Games. The company's headquarters are in New York City, with international headquarters in Windsor, United Kingdom...
achieved historical highs in the mid-2000s.
Selected video game publishers
Below are the top 20 video game publishers, ranked by Game DeveloperGame Developer Magazine
Game Developer magazine is the premier publication for working video game creators, and reaches over 35,000 industry professionals monthly. Each month, industry leaders and experts share technical solutions, review new game development tools, and discuss strategies for creating innovative,...
in October 2010, in order from the 2009 rankings with exception of the new publishers to the list and ones that did not make the 2010 list. Note that this is not a ranking by revenue, but of the quality of experience of working with the publishers according to staff, and some video game development companies
Video game developer
A video game developer is a software developer that creates video games. A developer may specialize in a certain video game console, such as Nintendo's Wii, Microsoft's Xbox 360, Sony's PlayStation 3, or may develop for a variety of systems, including personal computers.Most developers also...
. Atari
Atari
Atari is a corporate and brand name owned by several entities since its inception in 1972. It is currently owned by Atari Interactive, a wholly owned subsidiary of the French publisher Atari, SA . The original Atari, Inc. was founded in 1972 by Nolan Bushnell and Ted Dabney. It was a pioneer in...
, LucasArts
LucasArts
LucasArts Entertainment Company, LLC is an American video game developer and publisher. The company was once famous for its innovative line of graphic adventure games, the critical and commercial success of which peaked in the mid 1990s...
and MTV Games have been bumped off the list. Nexon
Nexon Corporation
Nexon Co. Ltd. is a South Korean video game developer and publisher of online games and MMORPGs. Founded in Seoul in 1994, Nexon's headquarters is currently based in Tokyo. Nexon provides over 30 games which are serviced in 72 countries globally, reaching 1.14 billion players...
, Valve Corporation
Valve Corporation
Valve Corporation is an American video game development and digital distribution company based in Bellevue, Washington, United States...
and Zynga
Zynga
Zynga is a social network game developer located in San Francisco, United States. The company develops browser-based games that work both stand-alone and as application widgets on social networking websites such as Facebook and MySpace....
are on the list for the first time. Bethesda Softworks
Bethesda Softworks
Bethesda Softworks, LLC, is an American video game company. A subsidiary of ZeniMax Media, the company was originally based in Bethesda, Maryland and eventually moved to their current location in Rockville, Maryland...
is now listed as ZeniMax Media
ZeniMax Media
ZeniMax Media Inc. is an American media company that develops and publishes computer and video games through its subsidiaries. ZeniMax is known as the owner of id Software , Bethesda Softworks , Arkane Studios , Tango Gameworks and...
.
| 2010 Position | Name of Publisher | 2009 Position |
|---|---|---|
| 1 |  NintendoNintendo is a multinational corporation located in Kyoto, Japan. Founded on September 23, 1889 by Fusajiro Yamauchi, it produced handmade hanafuda cards. By 1963, the company had tried several small niche businesses, such as a cab company and a love hotel.... |
1 |
| 2 |  Electronic ArtsElectronic Arts Electronic Arts, Inc. is a major American developer, marketer, publisher and distributor of video games. Founded and incorporated on May 28, 1982 by Trip Hawkins, the company was a pioneer of the early home computer games industry and was notable for promoting the designers and programmers... |
2 |
| 3 |  Activision BlizzardActivision Blizzard Activision Blizzard, Inc., formerly Activision, Inc. is the American holding company for Activision and Blizzard Entertainment. The company is majority owned by French conglomerate Vivendi SA and was created through the merger of Activision and Vivendi Games, announced on December 2, 2007, in a... |
3 |
| 4 | Ubisoft Ubisoft Ubisoft Entertainment S.A. is a major French video game publisher and developer, with headquarters in Montreuil, France. The company has a worldwide presence with 25 studios in 17 countries and subsidiaries in 26 countries.... |
4 |
| 5 | Take Two Take-Two Interactive Take-Two Interactive Software, Inc. is a major American publisher, developer, and distributor of video games and video game peripherals. Take-Two wholly owns 2K Games and Rockstar Games. The company's headquarters are in New York City, with international headquarters in Windsor, United Kingdom... |
6 |
| 6 | Sony Sony Computer Entertainment Sony Computer Entertainment, Inc. is a major video game company specializing in a variety of areas in the video game industry, and is a wholly owned subsidiary and part of the Consumer Products & Services Group of Sony... |
5 |
| 7 | ZeniMax Media ZeniMax Media ZeniMax Media Inc. is an American media company that develops and publishes computer and video games through its subsidiaries. ZeniMax is known as the owner of id Software , Bethesda Softworks , Arkane Studios , Tango Gameworks and... |
n/a (new entry) |
| 8 | THQ THQ THQ Inc. is an American developer and publisher of video games. Founded in 1989 in the United States, the company develops products for video game consoles, handheld game systems, as well as for personal computers and wireless devices... |
8 |
| 9 | Square Enix Square Enix is a Japanese video game and publishing company best known for its console role-playing game franchises, which include the Final Fantasy series, the Dragon Quest series, and the action-RPG Kingdom Hearts series... |
10 |
| 10 | Microsoft Microsoft Game Studios Microsoft Studios is the video game production wing for Microsoft, responsible for the development and publishing of games for the Xbox, Xbox 360, Games for Windows and Windows Phone platforms. They were established in 2002 as Microsoft Game Studios to coincide with the release of the Xbox, before... |
9 |
| 11 | Konami Konami is a Japanese leading developer and publisher of numerous popular and strong-selling toys, trading cards, anime, tokusatsu, slot machines, arcade cabinets and video games... |
11 |
| 12 | Sega Sega , usually styled as SEGA, is a multinational video game software developer and an arcade software and hardware development company headquartered in Ōta, Tokyo, Japan, with various offices around the world... |
7 |
| 13 | Capcom Capcom is a Japanese developer and publisher of video games, known for creating multi-million-selling franchises such as Devil May Cry, Chaos Legion, Street Fighter, Mega Man and Resident Evil. Capcom developed and published Bionic Commando, Lost Planet and Dark Void too, but they are less known. Its... |
14 |
| 14 |  NexonNexon Corporation Nexon Co. Ltd. is a South Korean video game developer and publisher of online games and MMORPGs. Founded in Seoul in 1994, Nexon's headquarters is currently based in Tokyo. Nexon provides over 30 games which are serviced in 72 countries globally, reaching 1.14 billion players... |
n/a (new entry) |
| 15 | Namco Bandai Games Namco Bandai Games is an arcade, mobile and home video game developer and publisher based in Japan which is the product of a merger between the video game development divisions of Bandai and Namco. Namco Bandai Games is a wholly owned subsidiary of Namco Bandai Holdings and specializes in production and sales of... |
13 |
| 16 | Warner Bros. Interactive |
n/a (new entry) |
| 17 | Namco Namco is a Japanese corporation best known as a former video game developer and publisher. Following a merger with Bandai in September 2005, the two companies' game production assets were spun off into Namco Bandai Games on March 31, 2006. Namco Ltd. was re-established to continue domestic operation of... |
16 |
| 18 | Valve Corporation Valve Corporation Valve Corporation is an American video game development and digital distribution company based in Bellevue, Washington, United States... |
n/a (new entry) |
| 19 | Atlus |
n/a (new entry) |
| 20 | Zynga Zynga Zynga is a social network game developer located in San Francisco, United States. The company develops browser-based games that work both stand-alone and as application widgets on social networking websites such as Facebook and MySpace.... |
n/a (new entry) |
See also
- Console manufacturerConsole manufacturerA console manufacturer is a company that manufactures and distributes video game consoles. It is also known as a first-party video game publisher...
- Independent video game developmentIndependent video game developmentIndependent video game development is the process of creating video games without the financial support of a video game publisher. While large firms can create independent games, they are usually designed by an individual or a small team of as many as ten people, depending on the complexity of the...
- List of video game publishers