A video game publisher is a company that
publishes
Publishing is the activity of making information, literature, music, software and other content available to the public for sale or for free. Traditionally, the term refers to the creation and distribution of printed works, such as books, newsp ...
video game
Video games, also known as computer games, are electronic games that involves interaction with a user interface or input device such as a joystick, controller, keyboard, or motion sensing device to generate visual feedback. This fee ...
s that have been developed either internally by the publisher or externally by a
video game developer
A video game developer is a broad term for a software developer specializing in video game development – the process and related disciplines of creating video games. A game developer can range from one person who undertakes all tasks to a large ...
.
They often finance the development, sometimes by paying a
video game developer
A video game developer is a broad term for a software developer specializing in video game development – the process and related disciplines of creating video games. A game developer can range from one person who undertakes all tasks to a large ...
(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
A license (or licence) is an official permission or permit to do, use, or own something (as well as the document of that permission or permit).
A license is granted by a party (licensor) to another party (licensee) as an element of an agreeme ...
s used by the game; paying for
localization
Localization or localisation may refer to:
Biology
* Localization of function, locating psychological functions in the brain or nervous system; see Linguistic intelligence
* Localization of sensation, ability to tell what part of the body is a ...
; 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
A label (as distinct from signage) is a piece of paper, plastic film, cloth, metal, or other material affixed to a container or product, on which is written or printed information or symbols about the product or item. Information printed dir ...
).
Large publishers may also attempt to boost efficiency across all internal and external development teams by providing services such as
sound design
Sound design is the art and practice of creating sound tracks for a variety of needs. It involves specifying, acquiring or creating auditory elements using audio production techniques and tools. It is employed in a variety of disciplines including ...
and code packages for commonly needed functionality.
Because the publisher often finances development, it usually tries to manage development risk with a staff of
producers
Producer or producers may refer to:
Occupations
*Producer (agriculture), a farm operator
*A stakeholder of economic production
*Film producer, supervises the making of films
**Executive producer, contributes to a film's budget and usually does not ...
or
project managers
A project manager is a professional in the field of project management. Project managers have the responsibility of the planning, procurement and execution of a project, in any undertaking that has a defined scope, defined start and a defined ...
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
A milestone is a numbered marker placed on a route such as a road, railway line, canal or boundary. They can indicate the distance to towns, cities, and other places or landmarks; or they can give their position on the route relative to so ...
s.
Business risks
Video game publishing is associated with high
risk
In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environme ...
:
* The
Christmas
Christmas is an annual festival commemorating Nativity of Jesus, the birth of Jesus, Jesus Christ, observed primarily on December 25 as a religious and cultural celebration among billions of people Observance of Christmas by country, around t ...
selling season accounts for a highly significant portion of industry sales, 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 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
marketing
Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emph ...
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
id and
Epic) 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
A software release life cycle is the sum of the stages of development and maturity for a piece of computer software ranging from its initial development to its eventual release, and including updated versions of the released version to help impro ...
. However, this sometimes can be problematic as well, as seen with ''
Duke Nukem Forever
''Duke Nukem Forever'' is a 2011 first-person shooter game developed by Gearbox Software and published by 2K Games for Windows, PlayStation 3, and Xbox 360. It is the fourth main installment in the ''Duke Nukem'' series and the sequel to ''Duke ...
''.
* The industry has 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 number 1 in its category. It also caused publishers to on occasion force developers to focus on sequels of successful franchises instead of exploring original
IP; some publishers such as
Activision Blizzard
Activision Blizzard, Inc. is an American video game holding company based in Santa Monica, California. It was founded in July 2008 through the merger of Activision, Inc. (the publicly traded parent company of Activision Publishing) and Vivendi ...
and
Electronic Arts
Electronic Arts Inc. (EA) is an American video game company headquartered in Redwood City, California. Founded in May 1982 by Apple employee Trip Hawkins, the company was a pioneer of the early home computer game industry and promoted the d ...
have both attracted criticism for acquiring studios with original games and assigning them to support roles in more mainstream franchises.
* 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 be
modeled with a higher level of detail; more textures must be created; the entire
art pipeline
The art pipeline is the process of creating and implementing art for a particular project, most commonly associated with the creative process for developing video games. In an era of high-profile video games, wherein the creative energy of the team ...
must be made more complex to allow the creation of
normal 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 of
US$15 million to $20 million. Activision's ''
Spider-Man 3
''Spider-Man 3'' is a 2007 American superhero film based on the Marvel Comics character Spider-Man. It was directed by Sam Raimi from a screenplay by Raimi, his older brother Ivan and Alvin Sargent. It is the final installment in Raimi's ...
'', 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 big budget titles increased expense of "front-line" console games is the
casual game
A casual game is a video game targeted at a mass market audience, as opposed to a hardcore game, which is targeted at hobbyist gamers. Casual games may exhibit any type of gameplay and genre. They generally involve simpler rules, shorter sessio ...
market, in which smaller, simpler games are published for PCs and as downloadable console games. Also, Nintendo's
Wii
The Wii ( ) is a home video game console developed and marketed by Nintendo. It was released on November 19, 2006, in North America and in December 2006 for most other Regional lockout, regions of the world. It is Nintendo's fifth major ho ...
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 Remote
The Wii Remote, also known colloquially as the Wiimote, is the primary game controller for Nintendo's Wii home video game console. An essential capability of the Wii Remote is its motion sensing capability, which allows the user to interact with ...
and not around the graphics pipeline.
* When publishing for
game console
A video game console is an electronic device that outputs a video signal or image to display a video game that can be played with a game controller. These may be home consoles, which are generally placed in a permanent location connected to a t ...
s, game publishers take on the burden of a great deal of
inventory
Inventory (American English) or stock (British English) refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilisation.
Inventory management is a discipline primarily about specifying the shap ...
risk. All significant console manufacturers since Nintendo with its
NES
The Nintendo Entertainment System (NES) is an 8-bit third-generation home video game console produced by Nintendo. It was first released in Japan in 1983 as the commonly known as the The NES, a redesigned version, was released in American ...
(1985) have monopolized the manufacture of every game made for their console and have required all publishers to pay a
royalty
Royalty may refer to:
* Any individual monarch, such as a king, queen, emperor, empress, etc.
* Royal family, the immediate family of a king or queen regnant, and sometimes his or her extended family
* Royalty payment for use of such things as int ...
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 market
A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include ''securities'' listed on a public stock exchange, as ...
s. As a group, they have had mixed performance. At present,
Electronic Arts
Electronic Arts Inc. (EA) is an American video game company headquartered in Redwood City, California. Founded in May 1982 by Apple employee Trip Hawkins, the company was a pioneer of the early home computer game industry and promoted the d ...
is the only third-party publisher present in the
S&P 500
The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices. As of D ...
diversified list of large U.S. corporations; in April 2010, it entered the
Fortune 500
The ''Fortune'' 500 is an annual list compiled and published by ''Fortune'' magazine that ranks 500 of the largest United States corporations by total revenue for their respective fiscal years. The list includes publicly held companies, along ...
for the first time.
Hype over video game publisher stocks has been breathless at two points:
* In the early 1990s, the introduction of
CD-ROM
A CD-ROM (, compact disc read-only memory) is a type of read-only memory consisting of a pre-pressed optical compact disc that contains data. Computers can read—but not write or erase—CD-ROMs. Some CDs, called enhanced CDs, hold both comput ...
computer drives caused
hype about a
multimedia
Multimedia is a form of communication that uses a combination of different content forms such as text, audio, images, animations, or video into a single interactive presentation, in contrast to tradition ...
revolution that would bring interactive entertainment to the masses. Several
Hollywood movie studio
A film studio (also known as movie studio or simply studio) is a major entertainment company or motion picture company that has its own privately owned studio facility or facilities that are used to make films, which is handled by the production ...
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 States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
, revenue from the sales of video and computer games exceeded revenue from
film
A film also called a movie, motion picture, moving picture, picture, photoplay or (slang) flick is a work of visual art that simulates experiences and otherwise communicates ideas, stories, perceptions, feelings, beauty, or atmosphere ...
box-office receipts for the first time in the
dot-com 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
Take-Two Interactive
Take-Two Interactive Software, Inc. is an American video game holding company based in New York City and founded by Ryan Brant in September 1993.
The company owns two major publishing labels, Rockstar Games and 2K, which operate internal g ...
achieved historical highs in the mid-2000s.
Rankings
Major publishers
In 2021, the largest public companies by game revenue were
Tencent
Tencent Holdings Ltd. () is a Chinese multinational technology and entertainment conglomerate and holding company headquartered in Shenzhen. It is one of the highest grossing multimedia companies in the world based on revenue. It is also the w ...
, with , followed by
Sony
, commonly stylized as SONY, is a Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan. As a major technology company, it operates as one of the world's largest manufacturers of consumer and professional ...
, with , and
Apple
An apple is an edible fruit produced by an apple tree (''Malus domestica''). Apple fruit tree, trees are agriculture, cultivated worldwide and are the most widely grown species in the genus ''Malus''. The tree originated in Central Asia, wh ...
, with , according to Newzoo.
Mid-size publishers
References
{{Reflist
Video game development