The video game industry is currently the most profitable sector of the entertainment industry, practically out grossing every other sector combined.

In 2005 the United States video game industry grossed $9.5 billion. 5 years later…$25.1 billion. By 2022, experts project that the industry will produce $196 billion in revenue.

Of course, when you’re this successful, you will have your detractors.

The video game industry has been besieged on all sides by various protests. Violence in video games, female tropes in video games, time consumption (read as time-wasting), etc. are just a few of the hot button issues that have been weathered by gamers and creators alike.

However, it is important to note that this juggernaut was once in danger of disappearing ignominiously…and, the way things are going, it might happen again.

WHERE DID THIS BEGIN?

Video games have existed since the 1950s but they really hit the mainstream in the 1970s when Atari ruled the roost and coin-operated arcade machines could be found in malls all over.

The late 1970s to early 1980s was the golden age of the arcade gamer when little kids would line up to challenge the king of the hill, taking on all comers in the myriad fighting games or holding the high score in the others.

However, companies saw all this success and joy and decided that this was a license to print money.

Quickly trying to snap up Atari’s scraps and/or steal their business, the video game market was flooded with way too many consoles. The likes of Magnavox, Mattel, Coleco, Milton Bradley, and, surprisingly even Atari, bombarded consumers with consoles, each with their own library of games.

This flood didn’t start the first generation of console wars because it exacerbated an arguably worse problem…the games.

The games that hit the market during the flood were an avalanche of crap, burying the few good games in the pile. Given that this was before the current age of information and video game reviewing that we have now, those noble few that stood above the competition were drowned out in the noise made by the others.

A particularly egregious example was E.T. the Extra-Terrestrial. A video game released by Atari in 1982 and based on the beloved Steven Spielberg classic, E.T is noted for being one of the worst video games of all time and one of the biggest commercial failures in video game history.

THE RESULT

Gamers got fed up and the market tanked…horribly.

Stores couldn’t give away their consoles and games to any consumers and the publishers had no ability to refund returns from the retailers. As such, the games, some of them brand new, were marked down to practically nothing.

Many publishers, like Imagic and US Games, had to shut down and others abandoned the industry entirely. Activision managed to survive by switching to computer games, which was a much smaller market.

In September 1983, Atari got rid of all their excess stock, as well as its unsold stock of earlier games, by burying them in a landfill near New Mexico. The landfill was dug up in 2014 revealing about 700,000 buried cartridges.

The loss of jobs and revenue was staggering to say the least.

The recovery took a while, mostly thanks to the efforts of Nintendo and other Japanese video game companies.

In a couple of years, the juggernaut was back on track and conquering market share like nobody’s business.

WHAT’S HAPPENING NOW

In this current age of AAA video game development, it seems that video game developers have forgotten the old lessons that billions in dollars in lost revenue and numerous lost jobs taught us and are creating staggeringly awful new mistakes in the process.

Games released in this new age are arguably better, however, we are still besieged by games that just seemed designed to milk cash from consumers. Be it reskinned games sold to us as new IPs or just plain lackluster efforts, gamers are weathering another storm of sub-par games.

Fortunately, we live in the age of the internet where information is readily available. Games journalists and reviewers are available to give consumers initial impressions and reviews of games, allowing gamers to winnow the chaff out and get to the games they actually want to play.

But, there’s is a new player on the field who seems ready to start the next video game apocalypse

OVERLY AGGRESSIVE MONETIZATION

Now the AAA game development ecosystem seems to be one hellbent on squeezing every coin out of a gamer’s wallet.

With lootboxes, season passes, DLC (that should have shipped with the base game), in-game microtransactions, electronic gambling, etc, games are looking more like casinos instead of player experiences.

Predatory practices like these are designed to prey on gamers’ habits and flaws to create the need to spend money. Some games (mostly PvP focused ones) have made it impossible to succeed at the game with some monetary input from the player. Others throttle gamer progression to almost a standstill to incentivize spending more money on the game.

There is a healthy space for in-game monetization and some studios actually do it well. The free-to-play games market has quite a few examples (like Warframe) of respecting a player’s investment with either time or money by providing unique incentives for either route.

However, the use of these greedy practices that create pay-to-win games is particularly egregious and gamers have been rallying against this for years.

EA is especially infamous in this regard, practically pioneering the lootbox mechanic, using predatory microtransactions in almost all their IPs, and getting rid of games that are unable to provide monetization on the likes of FIFA’s Ultimate Team.

CONCLUSION

Video games have created a multi-billion dollar global industry that has made many companies very rich. But these riches only exist because of the passionate gamers to are willing to stick their necks out and do the thing they love the most.

If they are slighted too far, this industry will crumble once more.

It has already happened before…it can happen again.