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History

Popularity
The current industry consensus is that the popularity of computer and video games, as a whole, has been increasing steadily ever since the 1984-1987 dropoff caused by the video game crash of 1983, and that the popularity is continuing to increase. The average age of the video game player is now 29 [1], indicating that video games are not largely a diversion for teenagers, as many nongamers assume. Each year, the theory goes, the generation of kids familiar with arcade and console games becomes one year older (and one year larger), and with more disposable income available to the group as a whole, sales should continue to grow, presumably until the entire population has grown up with video games easily available.

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Sales

A typical retail display (in Geneva, Switzerland) with a large selection of games for several major consolesThe four largest markets for computer and video games are the United States, Japan, Canada and the United Kingdom. Other significant markets include Spain, Germany, South Korea, France, and Italy. China is not considered a significant market, probably because an estimated 95% of video games sold in the country are pirated. [2]

Sales of different types of games vary widely between these markets due to local preferences. Japanese consumers avoid computer games and instead buy video games, with a strong preference for games created in Japan, that run on Japanese consoles. In South Korea, computer games are preferred, especially MMORPG games and real-time strategy games; there are over 20,000 PC bang internet cafes where computer games can be played for an hourly charge.

The NPD Group tracks computer and video game sales in the United States. It reported that as of 2004:

Console and portable software sales: $6.2 billion, up 8% from 2003 [3]
Console and portable hardware and accessory sales: $3.7 billion, down 35% from 2003 [4]
PC game sales: $1.1 billion, down 2% from 2003 [5]
These figures are sales in dollars, not units; unit shipments for each category were higher than the dollar sales numbers indicate, as more software and hardware was sold at reduced prices compared to 2003.

Retail PC game sales have been declining slightly each year since about 1998, but this fact should be taken with a grain of salt: the retail sales numbers from NPD do not include sales from online downloads, nor subscription revenue for games like MMORPGs.

There is a commonly repeated, mistaken belief that video game sales now exceed the revenues of the movie industry. This is untrue; in the United States, video game sales have exceeded the movies' total box office revenue each year since about 1996, but the movie studios trounce the video game publishers when the movies' "ancillary revenue" is counted, meaning sales of DVDs, sales to foreign distributors, and sales to cable TV, satellite TV, and broadcast television networks.

The game and film industries are also becoming increasingly intertwined, with companies like Sony having significant stakes in both. A large number of summer blockbuster films spawn a companion game, often launching at the same time in order to share the marketing costs

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