The Park Place Economist


With its newfound mainstream appeal, the video game marketplace has become increasingly competitive, with software publishers churning out titles designed to appeal to every taste and niche imaginable. But as prosperous as the industry has been, many companies have found it tough to survive the last few years. Video games are driven by an ever-changing technological landscape, and development costs for new games have skyrocketed since 2005 when the most recent generation of hardware was released. As a result, commercial failure is catastrophic for most companies and firms are now forced to rethink the way they produce and market games. Because companies within the video game industry live and die by these sales figures (now more than ever), this paper‘s goal is to address the determinants of video game sales in order to provide a greater understanding of the market‘s inner workings and discover the recipe for success in this newly-burgeoning industry.