The video game industry is an emerging and rapidly growing sector that has grown to unimaginable levels over the past two decades. The video game industry has a direct contribution to the GDP and the total economic contribution through sales of games to customers. The buying of these video games leads to the buying of extra complimentary products and this contributes indirectly to the value of the economy.
The growth has been greatly influenced by the high level of technology and the consistent demand for more and better-improved games for leisure, business and entertainment purposes. To start with, there are thousands of companies that develop video games all over the world injecting billions of currency to the global economy. The value chain of the video game industry can be said to start from the hardware manufacturer to the game developer, the publisher, and the distributors who distribute to the retailer until it reaches the consumer.
Mobile phones have made it easy to access these games. Each one of these companies is aiming to produce better products and satisfying their buyer.
The positive influence of video games on real-life economies
The modern gaming business is one of the most profitable and can generate large turnovers in very short periods of time. A good example is the Rockstar games that made one billion dollars within the first three days in the year 2013.
The video game industry has also resulted in the emergence of other applications. The app stores in return contribute value to the economy and this is an indirect influence of the video game.
There are schools and other learning institutions where people acquire the skills to develop the video game software as well as design the games. A good example is the UK where 69% of the video game developers have reached up to degree level in their education. This contributes to the country’s knowledge economy. These learning institutions create employment opportunities for the tutors/ teachers and in turn, a value is added to the economy.
Having highly skilled workers takes the productivity to a higher level and is a very important factor in the government’s long-term plan for economic growth.
Some of these video games have features that can be used to unscramble letters and this brings out the educative aspect of these video games.
There are direct and indirect positive influences of video games on real-life economies. These influences include the following factors; the video game industry has contributed to revenue generation by paying for licenses for starting companies. The thousands of companies that develop video games offer direct employment to both the skilled and unskilled workers.
The software developers and those that produce hardware products such as mobile phones also contribute revenue to the economy. In the employment front, the video game industry has recorded an increased hiring rate. A good example is the UK game development industry that employed ten thousand developers in 2008. With such a great number of employment opportunities in one year, the economy is impacted directly in a positive way. These companies with their employees contribute to national revenue through paying of taxes. In the UK the video games development industry contributes directly over a billion pounds a year to the GDP.
Some video games are designed in such a way that players can buy and sell items. The money is gained by completing levels or accomplishing missions and the missions do not seem to end so that the player keeps coming for more and thus more trade.
Other games have to be subscribed for at a cost for the player to gain access and play the game. This kind of subscription gains revenue to the economy.
The games are also designed in a way that they have to be upgraded regularly and this is done either by subscription or the upgrade is paid for, using the tokens that the player has gained by playing the game.
Some upgrades for these games last for one month and have to be renewed every month. In this case, when the tokens are finished, they can be purchased using real-world money. A good example is the Battle.net account that lets players buy Blizzard games using tokens that are bought using in-game gold and transfer them in form of dollars to their Battle.net accounts.
Globally, the video game industry is generating revenue of more than one hundred billion dollars per year. In 2016, the global games market reached up to 99.6 billion dollars.
This sector has led to the development of many more companies that develop software and the hardware that is used in the video game industry. The sales sector of these video games is also involved in generating revenue. The video game industry has a very big positive impact on the economy through the sales of major games in a very short time. There are many individuals who have also gained from the successful business of video games. A good example of such individuals is Japan’s third richest man Hiroshi Yamauchi.
The negative influence of video games in real life economics
The negative influence of video games in real life economics is much less compared to positive influence. The major negative effects include; decrease in productivity among youth and increase in crime and violence.
In the United States, the number of jobless men who are in their prime working years and are not looking for work has increased. Most of these individuals spend most of their time on video games instead of searching for work. Regarding this crime in theft have increased at a higher rate as the same people need money to pay for bills.
The study has shown that most of the people who spend much time playing video games can get addicted just the same way as those people who use drugs. This drags the economy of a country backward as addiction result to crime and violence which in turn affect negatively the economy.