VIDEO GAMES
Introduction
Political economy is the study of how different values undergo various faucets of trade; this includes production, distribution, exchange and consumption. It also involves how power goes through the same process and how the two are related. The political economy of communication is concentrated on the structures of production that are under the influence of the media. One of the major aspects of communication is video games.
Video Games
Analysis
Video games are games that are played in computers and/or are run by a console or an arcade. The video game industry are a major economic hub in the economy of many countries, in America alone, it is an 11 billion dollar industry (Berger, 2002). This consists of only the games that are traded within the country. Exportation of these games only increases to the amount of revenue that video games generate. In the recent past, these games contributed to approximated 15 percent of the entire economy. This means that the video gaming industry is more than just a hobby. It has become a mega-industry (Berger, 2002).
Increasing Value
The video gaming industry has various ways in which it produces a value. First, it provides employment for many people. Employment translated to revenue collected through taxes hence raising the GDP of an economy. The other way that the gaming industry has a value is in its users. More and more people are playing video games as a major source of entertainment. Research shows that more Americans play video games than they go to the movies. For instance, the release of the video game called "modern warfare three" had more than a billion users within a month. This all translates to the revenue collected by various parties including software companies, distributors, computer hardware dealers and the government.
Video Game Regulations
The spread of video games in popularity has not come without challenges. The major challenges to this massive industry come in the form of regulation set within every level of distribution i.e. local, regional and state regulations. Among the reasons for the regulations is the controversy that surrounds playing video games, these are commonly known as video game controversies. Video game controversies are reasonable arguments that are proven both in a societal and scientific setting that suggests excessive playing of video games can be injurious to the health of the player. As such, there are rules and regulations that govern the content and distribution of video games. Due to the proven effect that the games have on users, there are regulations put in place that include censorship, content rating and banning depending on a variety of factors. Video game makers have also come up with ways in which they can regulate their games voluntarily. This voluntary regulation varies from country to country and is mainly centered on informing parents and guardians about the content of the game before they purchase it for their kids.
The gaming industry is at the center of the entertainment industry. More people are opting for the option of video games than they are other traditional forms of entertainment like going to the movies. However, these traditional forms of entertainment are reinventing themselves to become major competition to video games.
One of the major competitors to the video game industry is the film industry. Although they are rivals battling for market share, they both belong under the umbrella of the entertainment industry. Another similarity is that the two competitors have digital inclinations. This means that they are both entirely dependent on technology for survival.
One of the major differences between the two categories is that one provides an interactive forum of entertainment while the other is dormant. Video games allow for an interactive forum between the users. This dynamic platform is probably the reason popular video games have surpassed box office returns when comparing the release of the two genres of entertainment.
Capital
There is a variety of ways in which video game companies raise capital. Two of the major ways for these companies are venture capital and crowd funding (Erickson, 2004). Due to the capital intensive nature of these games, venture capitals provide an avenue in which the company can get a large amount of money for startup ventures (Janeway, 2012). With the high returns that are often associated with video games, there comes high risks; venture capitalist are ready and willing to share the risk and provide the capital necessary (Janeway, 2012). They also assist with the management of the fund to ensure that the money is put into good use. Another advantage to using venture capitalist as a source of capital is that more often than not, they usually have important networks that are important to any business.
Another source of capital for the video game industry is crowd funding. This is a collective effort by individuals to give financial support to the venture (Erickson, 2004). The gaming companies usually benefit from this technique a lot. First, the video games have loyal followers who are intent to see their success. It is, therefore, easy for a video game company to raise the necessary capital from its loyal followers. Another advantage that the video gaming companies have that enable crowd funding to be an option is the variables that come together to put the game into the market. Software and hardware entities have to come together for the success of the game. Open source software that supports a game can be a great source of funding for the game.
Video Games and Labor
Video games are sources of entertainment for millions of people around the world. The industry rakes in billions of dollars annually in sales of the video games and to a great extent; video games are beneficial to the economy. With this said the amount of time that productive members of the society pour into the games go unnoticed. It is estimated that a single user spends close to a full day per week playing games. The level of dedication that the serious users put in games surpasses the level of entertainment to become more like an obligation or a second job. This in turn reduces their productivity in the economy, and millions of dollars are lost to the economy. All this can be attributed to the video gaming industry.
Forecast for the Future
The video gaming industry can only grow further. The reasons for this growth vary from the users to the changing world of technology (Zackariasson, 2012). Video games are known to have addictive properties and as such their market will never decline. This will cause the expansion of the industry to fill this need. The massive amounts of profit that are generated from the games are more often than not reinvested into the industry; this further encourages the growth of the industry (Zackariasson, 2012). The government also encourages the growth of the industry due to the revenue that the industry generates in sales both local and international.
References
Berger, A. A. (2002). Video games: a popular culture phenomenon. New Brunswick, N.J.: Transaction.
Erickson, S. M. (2004). Raising entrepreneurial capital. Oxford: Elsevier.
Janeway, W. H. (2012). Doing capitalism in the innovation economy: markets, speculation and the state. Cambridge: Cambridge University Press.
Zackariasson, P. (2012). The video game industry: formation, present state, and future. New York: Routledge.
