The Video Game Business by Randy Nichols (review)

The video game business provides a much-needed historical and economic overview of the video game industry’s global development. As part of Paul McDonald and Michael Curtin’s International Screen Industries series for the BFI, this book’s main purpose is to demonstrate how the video game industry is structured. With this framework in mind, Nichols investigates why it is arranged in this manner and examines the motives and conditions under which video games are produced.

Drawing on copious amounts of third-party sourced industry and survey data (from the ESA, ELSPA [now UKIE], IEAA, NPD Group, and numerous websites and news outlets), Nichols utilizes a political economy approach to understand the growth of video games as a legitimate cultural industry, one that is distinct from and competes with other media and cultural industries. Nichols writes in a thoughtful, lucid manner, and the book should be accessible to a more general audience, as well as an academic one.

Nichols does not attempt to weigh in on well-worn approaches to game studies such as genre studies, theories of media effects, textual analysis, and the axiomatic claims of the ludology versus narratology debate. Rather, Nichols’s goal is to provide a partial framework for understanding how and why making games benefits video game producers. He contends that it is necessary to understand the industry’s macrolevel economic and industrial structures before we can ask meaningful questions about individual games’ effects and meanings. Accordingly, Nichols’s book concentrates on the mainstream production and consumption of video games in the world’s biggest markets—the United States, Japan, and Europe. Specifically, the book is divided into seven chapters covering industrial inception and history, market structure and software, distribution and hardware, and labor and production.

In each chapter, Nichols provides subsections that demonstrate important examples of the topic being discussed. These take the form of case study profiles of the industry’s major players, starting with Atari and moving in a generally chronological thrust to the rise of mobile and casual gaming. Nichols’s conception of the industry’s development as a whole moves away from the microchip-and-processor-power-centric, “console generation”–based understanding of production to build on previous scholarship that has formulated four historical “epochs” in video game technology from 1972 to 2010.¹ Such a maneuver allows Nichols to place consoles and video games within the broader theoretical discourse of communication devices and away from being classed as simply hardware platforms, gaming machines, or children’s toys.

By taking an expansive “jet plane” view of the industry, Nichols successfully strikes a balance by comprehending how corporate and individual interests that are relatively microlevel feed into the larger scope of a networked global industry. Nichols takes pains to point out that from the industry’s earliest days, video game entrepreneurs such as Atari’s Nolan Bushnell and Electronic Arts’ (EA) Trip Hawkins actively sought to establish their companies on a model similar to that of Hollywood’s studio era, an economic mode that encouraged extreme concentration of ownership. Nichols demonstrates how video game companies, much like Hollywood and other culture industries, insulate themselves from risk through exclusive licensing deals, franchising, and advertising. Such strategies lend themselves to companies being closely associated with specific game genres or formats (e.g., sports games or first-person shooters). The infrastructure of the video game industry has been codified through the prevalence of such business models.

Accordingly, a political economic viewpoint is central to Nichols’s research, as it necessitates his focus on the practices of the video game world’s “big three” hardware manufacturers—Nintendo, Microsoft, and Sony—and the largest video game publishers and developers—the aforementioned companies along with Atari, EA, Activision-Blizzard, Rockstar, and Sega. Nichols argues that the development of discrete publisher and developer companies is one of the key moments in the industry’s maturation. Here, however, there is also crossover between these labels, as Nintendo, Microsoft, and...