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Video game publisher

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A video game publisher is a company that publishes video games that have been developed either internally by the publisher or externally by a video game developer.

They often 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 licenses used by the game; 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. Some large publishers with vertical structure also own publishing subsidiaries (labels).

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 often 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 milestones.

Contents

Video game publishing is associated with high risk:

  • The Christmas 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 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. However, this sometimes can be problematic as well, as seen with Duke Nukem Forever.
  • 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 and Electronic Arts 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 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, 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 market, in which smaller, simpler games are published for PCs and as downloadable console games. Also, Nintendo's Wii 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 and not around the graphics pipeline.
  • When publishing for game consoles, game publishers take on the burden of a great deal of inventory risk. All significant console manufacturers since Nintendo with its NES (1985) have monopolized the manufacture of every game made for their console, and have required all publishers to pay a royalty 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.

Numerous video game publishers are traded publicly on stock markets. 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 the early 1990s, the introduction of CD-ROM computer drives caused hype about a multimedia revolution that would bring interactive entertainment to the masses. Several Hollywood movie studios 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, revenue from the sales of video and computer games exceeded revenue from film 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 achieved historical highs in the mid-2000s.

Major publishers

Below are the largest publishers according to their games net revenue earning in billions of dollars during 2019-2020 fiscal and calendar periods.

FY 2019-2020 Name of Publisher HQ Country Revenue in $bn
1 Sony Interactive Entertainment Japan 18.190
2 Tencent Games China 16.224
3 Nintendo Japan 12.010
4 Microsoft United States 10.260
5 NetEase China 6.668
6 Activision Blizzard United States 6.388
7 Electronic Arts United States 5.537
8 Take-Two Interactive United States 3.089
9 Bandai Namco Japan 3.018
10 Square Enix Japan 2.386

In 2016, the largest public companies by game revenue were Tencent, withUS$10.2 billion, followed by Sony, withUS$7.8 billion, and Activision Blizzard, withUS$6.6 billion, according to Newzoo.

Mid-size publishers

Below are the top AA (midsize) video game publishers, ranked by Metacritic in January 2014 based on game quality according to reviews. These lists are based on the ranking by best to worst publishers according to metacritic's website. Note that two major publishers, Take-Two Interactive and Sega fell to mid-size and one, Square Enix, jumped from mid-size to major. Three mid-size publishers ranked in 2013 were dropped from 2014 chart, namely Xseed Games and Kalypso Media. No iOS games were included in the figures.

  1. Was No. 1 as a major publisher
  2. Was No. 7 as a major publisher
  1. Yoon, Andrew (September 10, 2007). "Months late, Spider-Man 3 goes to PSP with new content". Engadget. RetrievedJuly 3, 2019.
  2. Matthews, Matt (April 19, 2012). "Has video game retail become an entirely 'hits driven' industry?". RetrievedAugust 12, 2013.
  3. "'White space' helps us understand the strategic direction of gaming mergers and acquisitions". August 12, 2013. RetrievedAugust 12, 2013.
  4. Messina, Judith (July 31, 2013). "Color Zen throws spotlight on city's games scene". RetrievedAugust 12, 2013.
  5. "Activision Reduces Prototype Devs To "Support" Role, Significantly Reduces Staff Levels". TheSixthAxis. June 28, 2012. RetrievedAugust 17, 2012.
  6. "Activision cuts staff at 'Prototype' video game studio". Content.usatoday.com. June 28, 2012. RetrievedAugust 17, 2012.
  7. Sinclair, Brendan (September 14, 2006). "Activision exec prices PS3 games". GameSpot. CBS Interactive. RetrievedMay 18, 2017.
  8. "PlayStation® Official Site – PlayStation Console, Games, Accessories". Playstation. RetrievedSeptember 17, 2017.
  9. "Archived copy". Archived from the original on December 21, 2013. RetrievedDecember 20, 2013.CS1 maint: archived copy as title (link)
  10. "Electronic Arts Breaks Into Fortune 500", Leigh Alexander, April 26, 2010, gamasutra.com. Fetched from Web on April 26, 2010.
  11. Derek Strickland (May 22, 2020). "2019's top-earning video game companies: Sony conquers the charts | TweakTown". RetrievedFebruary 9, 2021.
  12. Rita Liao (July 3, 2017). "World's top grossing mobile game debunks gender stereotype". technode. RetrievedJuly 7, 2017.
  13. "Metacritic's 5th Annual Game Publisher Rankings", metacritic.com, CBS Interactive Inc., January 30, 2014

Video game publisher
Video game publisher Language Watch Edit This article needs additional citations for verification Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Video game publisher news newspapers books scholar JSTOR August 2009 Learn how and when to remove this template message A video game publisher is a company that publishes video games that have been developed either internally by the publisher or externally by a video game developer They often 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 licenses used by the game 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 Some large publishers with vertical structure also own publishing subsidiaries labels 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 often 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 milestones Contents 1 Business risks 2 Investor interest 3 Rankings 3 1 Major publishers 3 2 Mid size publishers 4 ReferencesBusiness risks EditVideo game publishing is associated with high risk The Christmas 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 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 1 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 However this sometimes can be problematic as well as seen with Duke Nukem Forever The industry has become more hit driven over the past decade 2 3 4 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 and Electronic Arts have both attracted criticism for acquiring studios with original games and assigning them to support roles in more mainstream franchises 5 6 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 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 for example cost US 35 million to develop not counting the cost of marketing and sales 7 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 market in which smaller simpler games are published for PCs and as downloadable console games Also Nintendo s Wii console though debuting in the same generation as the PlayStation 3 8 and the Xbox 360 9 requires a smaller development budget as innovation on the Wii is centered around the use of the Wii Remote and not around the graphics pipeline When publishing for game consoles game publishers take on the burden of a great deal of inventory risk All significant console manufacturers since Nintendo with its NES 1985 have monopolized the manufacture of every game made for their console and have required all publishers to pay a royalty 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 EditNumerous video game publishers are traded publicly on stock markets As a group they have had mixed performance At present Electronic Arts is the only third party publisher present in the S amp P 500 diversified list of large U S corporations in April 2010 it entered the Fortune 500 for the first time 10 Hype over video game publisher stocks has been breathless at two points In the early 1990s the introduction of CD ROM computer drives caused hype about a multimedia revolution that would bring interactive entertainment to the masses Several Hollywood movie studios 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 revenue from the sales of video and computer games exceeded revenue from film 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 achieved historical highs in the mid 2000s Rankings EditMajor publishers Edit Below are the largest publishers according to their games net revenue earning in billions of dollars during 2019 2020 fiscal and calendar periods 11 FY 2019 2020 Name of Publisher HQ Country Revenue in bn1 Sony Interactive Entertainment Japan 18 1902 Tencent Games China 16 2243 Nintendo Japan 12 0104 Microsoft United States 10 2605 NetEase China 6 6686 Activision Blizzard United States 6 3887 Electronic Arts United States 5 5378 Take Two Interactive United States 3 0899 Bandai Namco Japan 3 01810 Square Enix Japan 2 386 In 2016 the largest public companies by game revenue were Tencent with US 10 2 billion followed by Sony with US 7 8 billion and Activision Blizzard with US 6 6 billion according to Newzoo 12 Mid size publishers Edit Below are the top AA midsize video game publishers ranked by Metacritic in January 2014 based on game quality according to reviews 13 These lists are based on the ranking by best to worst publishers according to metacritic s website Note that two major publishers Take Two Interactive and Sega fell to mid size and one Square Enix jumped from mid size to major Three mid size publishers ranked in 2013 were dropped from 2014 chart namely Xseed Games and Kalypso Media No iOS games were included in the figures 2014 Position Name of Publisher 2013 Position1 Telltale Games N A2 Paradox Interactive 43 Capcom 24 Take Two Interactive N A note 1 5 Sega N A note 2 6 Zen Studios N A7 Devolver Digital N A8 Konami 19 Slitherine Strategies N A10 NIS America 811 Warner Bros Interactive Entertainment 312 Koei Tecmo 713 Atlus 614 505 Games 515 Aksys Games N A16 Deep Silver 917 Focus Home Interactive 10 Was No 1 as a major publisher Was No 7 as a major publisher Independent video game development List of video game publishersReferences Edit Yoon Andrew September 10 2007 Months late Spider Man 3 goes to PSP with new content Engadget Retrieved July 3 2019 Matthews Matt April 19 2012 Has video game retail become an entirely hits driven industry Retrieved August 12 2013 White space helps us understand the strategic direction of gaming mergers and acquisitions August 12 2013 Retrieved August 12 2013 Messina Judith July 31 2013 Color Zen throws spotlight on city s games scene Retrieved August 12 2013 Activision Reduces Prototype Devs To Support Role Significantly Reduces Staff Levels TheSixthAxis June 28 2012 Retrieved August 17 2012 Activision cuts staff at Prototype video game studio Content usatoday com June 28 2012 Retrieved August 17 2012 Sinclair Brendan September 14 2006 Activision exec prices PS3 games GameSpot CBS Interactive Retrieved May 18 2017 PlayStation Official Site PlayStation Console Games Accessories Playstation Retrieved September 17 2017 Archived copy Archived from the original on December 21 2013 Retrieved December 20 2013 CS1 maint archived copy as title link Electronic Arts Breaks Into Fortune 500 Leigh Alexander April 26 2010 gamasutra com Fetched from Web on April 26 2010 Derek Strickland May 22 2020 2019 s top earning video game companies Sony conquers the charts TweakTown Retrieved February 9 2021 Rita Liao July 3 2017 World s top grossing mobile game debunks gender stereotype technode Retrieved July 7 2017 Metacritic s 5th Annual Game Publisher Rankings metacritic com CBS Interactive Inc January 30 2014 Retrieved from https en wikipedia org w index php title Video game publisher amp oldid 1052509891, wikipedia, wiki, book,

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