Competition and Innovation in the video games
“By the mid-2000s the development of computer-based video games had become a major international industry – dominated by companies in the UK, North America and Japan. But at the beginning of the industry (in the late 1980s) it was largely driven by individual developers writing programs in their bedrooms – it was a cottage industry. Then games cost as little as €6,000 (USA $6,250) to develop and required just a couple of people – a programmer and an artist. By the end of the 1990s there were more than 300 games companies in the UK alone. However, by the mid-2000s new titles were costing €3m to develop, needing teams of 30 or more programmers, artists, sound engineers and producers. Many expected development costs to rise to perhaps €15m per new title. This clearly had a major impact on the structure of the industry and how games companies were funded. Firms needed to be big to survive. Many of the company founders chose to sell out to corporate organisations or go public through a share flotation. Some companies, such as Rock Star. Had been founded in the UK but moved to the USA”. (Johnson et al., 2008, 514).