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. As with book publishers or publishers of
DVD movies, video game publishers are responsible for their product's
manufacturing and marketing, including market research and all aspects
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.
1 Business risks
2 Investor interest
3.1 Major publishers
3.2 Mid-size publishers
4 See also
Video game publishing is associated with high risk:
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 #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
Games are becoming more expensive to produce. 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
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
Fortune 500 for the first time.
Hype over video game publisher stocks has been breathless at two
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.
Below are the largest publishers in general according to their revenue
in billions of euros as of 2015[update].
Name of Publisher
Revenue in €bn
Sony Interactive Entertainment
Bandai Namco Entertainment
King Digital Entertainment
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.
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
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. Note also that iOS games were not included in the
Name of Publisher
Warner Bros. Interactive Entertainment
Focus Home Interactive
^ Was #1 as a major publisher
^ Was #7 as a major publisher
Game development portal
Independent video game development
List of video game publishers
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