The Economics of Video Games

Paige Frick

Mr. Rueter

Econ

26 October 2014

The Economics of Video Games

Video games are one of America’s greatest pastime from children to adults. Over half of Americans own at least one console, from a Nintendo DS to an Xbox. There are so many different gaming consoles and so many platforms to play a game on. Many platforms exist, which include the more popular gaming consoles, like the Xbox, the computer, and the mobile device. Mobile gaming has become very popular as well, and at least every smartphone has a game or two on it. Apple’s app store makes millions on selling games, like Flappy Bird. Millions of copies of games are sold every year and it impacts the economy. From the early 2000’s, video game production and has increased greatly, and as more games are being sold because of how many people own consoles and how many games are being released. Although, many video games can be expensive, and the cost of all these video games piles up, people still  buy the latest video game. As the demand of video games continues to increase, the supply also increases.

The impact that the video game community has on the economy is greater than one would think. The video game industry creates many jobs, which is a positive externality. In the United States more than 120,000 people are employed and earn salaries up to $90,000 a year. While other companies have been laying off their employees due to budget concerns, the video game industry has created more jobs in the past years. Youtube gamers also have a big role, too. Many gamers who upload content of themselves playing a new video game adds to the popularity of the certain game as well as Youtube gamers being able to make a living playing video games. This way of making a living encourages many people to put their content on the internet and promote the games.

According to the study “Video Games in the 21st Century: the 2010 Report”, video games have add almost 5 billion dollars to the United States economy back in 2009. Also, the study showed that the video game community’s growth rate from 2005 to 2009 was more than 10 percent; seven times the growth rate of the economy of the United States. California, being the state to produce the most video games and the state that is most involved in the community of gamers has greatly impacted the growth of the economy. California added $2.1 billion dollars to the United States economy. The revenue of the industry had doubled, and at the same time the United States Gross Domestic Product had only grown about 16 percent. Also, the industry had added almost $5 billion dollars to the Gross Domestic Product back in 2009.  So, from an economic standpoint, the video gaming community really does impact the economy - producing employment opportunities and adding billions of dollars to the growing economy of the United States.

Works Cited

"The Entertainment Software Association." - Games: Improving the Economy. N.p., n.d. Web. 26 Oct. 2014.

"Video Games Impact the Economy More Than You Think." CNBC. N.p., n.d. Web. 26 Oct. 2014.

"Game Industry Adds Billions to U.S. Economy." Msnbc.com. N.p., n.d. Web. 26 Oct. 2014.

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