20 years of Nintendo console sales
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Every year it feels like the gaming industry sees the same stories: record sales, unfathomable market reach, and questions about the growing market.
We are already well beyond the stage of the game as biggest gain media sector, with estimated revenues of $ 165 billion generated in 2020.
But as our chart above helps illustrate, it’s important to break down the changing growth within the market. Research of Pelham Smithers shows that while the tidal wave of the game has only continued to swell, the determining factors have changed over the course of the game’s history.
1970-1983: The pre-crash era
In the beginning, there was Atari.
The first video game prototypes were developed in labs in the 1960s, but it was Atari’s release from Pong in 1972 which helped revive the industry.
The game of arcade table tennis caused a stir, attracting consumers eager to play and companies that started producing their own counterfeit versions. Likewise, it was Atari that sold a home console version of Pong in 1975, and finally its own Atari 2600 home console in 1977, which would become the first console to sell over a million units.
In no time, the arcade market began to level off. After declining due to an overabundance of Pong clones, the release of Space invaders in 1978 revitalized the market.
Arcade machines have started to be installed everywhere, and new franchises like Pac-Man and Donkey kong resulted in further growth. In 1982, the arcades were already generating more money as the pop music industry and the box office.
1985-2000: The race for technological advancement
Unfortunately, the gaming industry has grown too quickly to be sustained.
Eager to capitalize on a growing home console market, Atari has licensed extremely high budget ports of Pac-Man and a game adaptation of AND the extra terrestrial. They were rushed to market, released in poor quality, and cost the company millions of returns and more in brand damage.
While other companies were also looking to capitalize on the market, there were many other poor attempts at games and consoles that caused a downturn across the industry. At the same time, personal computers were becoming the new flavor of gaming, especially with the release of the Commodore 64 in 1982.
It was a sign of what would define this era in gaming history: a technology race. In the years to come, Nintendo would release the Nintendo Entertainment System (NES) home console in 1985 (released in Japan as Famicom), emphasizing high-quality games and consistent marketing to win back the wary market.
On the back of games like Duck hunting, Excitbike, and the introduction of Mario in super mario bros, the massive success of the NES is relaunching the console market.
Estimated Total Console Sales by Manufacturer (1970-2020)
|Maker||Sale of home consoles||Sales of portable consoles||Total sales|
|Nintendo||318 million||430 million||754 million|
|Sony||445 million||90 million||535 million|
|Microsoft||149 million||–||149 million|
|Sega||64-67 M||14 million||81 million|
|Atari||31 million||1 million||32 million|
|Hudson Soft / NEC||10 millions||–||10 millions|
|Bandai||–||3.5 million||3.5 million|
Nintendo sought to maintain its dominance in the field, with the release of the Game Boy handheld console and the Super Nintendo Entertainment System. At the same time, other competitors stepped in to beat them at their own game.
In 1988, the arcade company Sega entered the fray with the Sega Mega Drive console (released as Genesis in North America), and later the Game Gear handheld, emphasizing the processing power.
Electronics maker Sony introduced the PlayStation in 1994, which used CD-ROMs instead of cartridges to improve the storage capacity of individual games. It became the first console in history to sell more than 100 million units, and the focus on software formats would continue with the PlayStation 2 (DVD) and PlayStation 3 (Blu-ray).
Even Microsoft recognized the importance of PC games and developed the DirectX API to help with game programming. This “X” brand would make its way to the company’s entry into the console market, the Xbox.
2001 to today: the online boom
It was, however, the rise of the Internet and mobile phones that grew the gaming industry from tens of billions to hundreds of billions in revenues.
One primer was the viability of subscription and freemium services. In 2001, Microsoft launched the Xbox Live online gaming platform for a monthly subscription, giving gamers access to multiplayer matchmaking and voice chat services, quickly becoming a consumer staple.
Meanwhile, on PC, Blizzard tapped into the Massive Multiplayer Online (MMO) subscription market with the 2004 release of World of warcraft, which peaked by more than 14 million monthly paid subscribers.
All the while, companies saw a future in mobile gaming that they struggled to tap into. Nintendo has continued to hold onto the handheld market with updated Game Boy consoles, and Nokia and BlackBerry have dabbled in integrating gaming applications into their phones.
But it was Apple’s iPhone that solidified the game’s transition to a mobile platform. The company’s release of the App Store for its smartphones (closely followed by Google’s own store for Android devices) paved the way for app developers to create free, paid and paid games for a market of mass.
Now everyone’s eyes on this growth $ 85 billion mobile slice of the gaming market, and game companies are starting to consolidate strongly.
Major game acquisitions since 2014
|Dated||Purchaser||Target and sector||Transaction value (USD)|
|Apr 2014||Oculus – VR||$ 3.0 billion|
|August 2014||Amazon||Twitch – Streaming||$ 1.0 billion|
|Nov 2014||Microsoft||Mojang – Games||$ 2.5 billion|
|Feb. 2016||Activision Blizzard||King – Games||$ 5.9 billion|
|June 2016||Tencent||Supercell – Games||$ 8.6 billion|
|Feb. 2020||Embracer Group||Saber Interactive – Games||$ 0.5 billion|
|Sep 2020||Microsoft||ZeniMax Media – Games||$ 7.5 billion|
|Nov 2020||Take-Two Interactive||Codemasters – Games||$ 1.0 billion|
Console makers like Microsoft and Sony are launching cloud-based subscription services while continuing to develop new consoles. Meanwhile, Amazon and Google are launching their own services that work on multiple devices, including mobiles.
After seeing the success that games love Pokémon Go had on smartphones, reaching over $ 1 billion in annual turnover and Grand Theft Auto Vthe record number of $ 1 billion in just three days, companies are targeting as much market as possible.
And with the proliferation of smartphones, social media games, and streaming services, they’re on the right track. There are over 2.7 billion players globally in 2020, and the way they choose to spend their money will continue to shape the history of the game as we know it.