The gaming industry, once a showcase for the competitive ferment of an innovation-driven tech market, has matured to the point where its biggest players have mostly learned to stay out of each other’s way.
The panorama: A rapidly expanding player base and antitrust regulators’ exceptionally laissez-faire attitude toward gaming acquisitions have allowed the largest companies to carve out their own lanes and keep outsiders at bay.
Retrospective scene: The infancy of the video game industry during the 1980s and 1990s was marked by intense competition during successive waves of change.
- Atari lost its early dominance thanks to lackluster game quality and allowed Nintendo to corner the home console market.
- Sega caught a tailwind in the late ’80s, touting higher-end tech and edgier branding to counter Nintendo’s family-friendly reputation.
- A host of new manufacturers in the late 1980s and 1990s, including Hudson Soft’s TurboGrafx-16 and Neo Geo, joined the fierce competition.
- Nintendo vs. Sega gave way to Microsoft vs. Sony vs. Nintendo. Exclusive games, partnership deals, and fan sentiment helped determine which of these behemoths would win the fight to dominate each new generation of consoles.
State of the situation: Today, Microsoft, Sony, and Nintendo each enjoy their own market, striving to satisfy the insatiable appetites of their gamers rather than engage in head-to-head competition.
- Sony He’s been on a studio spending spree for the past decade and has been inclined to sell his PlayStation 5 thanks to exclusive games slowly releasing on the console.
- Microsoft it has blazed another trail with services like Netflix-like Game Pass, which lets users access a host of games for a monthly fee, and the Xbox Cloud Gaming streaming platform. Notably, both services go beyond Microsoft’s flagship Xbox consoles and invite users to play their games on various devices and consoles.
- Nintendo it has stuck to its guns, eschewing many modern gaming trends, including strong online experiences and ambitious hardware advancements. Instead, he has cultivated brand loyalty around his long-standing franchises, such as Mario and Pokémon, and continued to tout their appeal to all ages.
in what some see As an anti-competitive trend, a great wave of mergers and acquisitions has marked the last few years in the game. Two of the biggest acquisitions in gaming history happened earlier this year: Microsoft’s $69 billion bid to buy Activision Blizzard and Sony’s completion of its $3.6 billion purchase of Destiny maker Bungie.
- Game studios are also being snapped up by some giant holding companies, such as China-based Tencent and Sweden’s Embracer Group.
Between lines: While console manufacturers and game studios continue to compete for minds, hearts, and dollars, the exponential growth in the gaming population has given large companies the flexibility to establish their own markets.
- More console and PC gaming players are added every year as new people discover the industry. And the global adoption of smartphones has created millions more gamers and a market to match.
Of note: The demand for new games seems higher than what providers can currently meet. The rest of this year offers a slim release schedule, a slowdown that has been widely lamented.
Yes, but: Fortnite maker Epic Games has proven to be a disruptive force for the competition.
- After Valve’s Steam marketplace dominated the PC gaming landscape for years, the Epic Game Store launched as a rival to the more powerful platform.
- Epic’s landmark lawsuit against Apple was also a direct challenge to the iPhone maker’s tight control over its App Store and the ways app and game developers can make money there.
The bottom line: Gaming has its own “big three” behemoths, but unlike the Big Tech market leaders, they have largely escaped the spotlight of regulators.