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Behind a major new videogame are concept designers, composers, graphic artists, scriptwriters—and big budgets.
Last year, U.S. revenues for videogames amounted to $20 billion, twice as much as for Hollywood blockbusters. Avista Partners, a banking firm, estimates world-wide videogame revenues at $110 billion. The eyeballs that used to gaze up at movie screens in theaters are now staring at living-room big screens, dorm-room laptops and, increasingly, smartphones.
In "Fun Inc.," Tom Chatfield presents an ambitious overview of the videogaming industry, from its beginning in 1972 with the dramatic success of Pong, a game in which the object was simply to hit a "puck" from one side of the screen to the other, to today's immersive multi-player online games, like World of Warcraft, a sword-and-sorcery adventure. Currently more than 12 million World of Warcraft subscribers pay $10 a month to inhabit a virtual world where they can choose to be any character they want, from mage to warrior to goblin. Last year World of Warcraft had revenues of $1 billion.
To launch a game, as Mr. Chatfield shows in engrossing detail, requires coordinating a team of concept artists, graphic designers, music composers, scriptwriters and the code-writing techs who build the game's digital structure. The budget to produce an A-level console videogame—like Gears of War, Red Dead Redemption or Halo—is between $10 million and $50 million dollars. Mr. Chatfield notes that low-cost games designed for smartphones or given away on the Internet present a challenge to the big videogame companies, threatening profits and market share.
One of the most fascinating parts of "Fun Inc." is Mr. Chatfield's description of "gold farming," a business that nongamers may find hard to believe. There are millions of gamers playing adventure games like World of Warcraft, in which one of the goals is to accumulate virtual currency and buy things within the game—armor, horses, food, magic spells. Not all of the millions of gamers, however, have the time to earn the currency by playing the rather repetitious in-game tasks required.
Enter the gold farmers. "In the time-honored tradition of supply and demand," Mr. Chatfield writes, players "pay other, real people with real money to earn virtual cash for them." Most of these gold farmers live in China, where an estimated one million Chinese player-farmers grind away at online games earning virtual gold. For 100 gold coins the "farmer" is paid about $3 by a broker. The 100 gold coins are then sold by the broker on the international market for $20. It should be emphasized that virtual-gold has no value in the real world. While this sort of activity might seem absurd, it highlights the power that immersive online games can exert on the people who play them—the passion and commitment they inspire.
Three million people have played Darfur is Dying since 2006. Farmville, another free online game, where players manage a farm with cute cows and pigs, has 62 million active users. Meanwhile, the Grand Theft Auto franchise, a series of violent, fast-paced games in which players assume the role of gangsters careening through an urban landscape, has sold 35 million copies and brought in revenues of $2 billion over the past 13 years.
Mr. Chatfield's attempts to separate the uplifting from the degrading, though understandable, sets up a false dichotomy. The key question for videogamers is whether a game is compelling—not whether its content is moral or immoral. The biggest-selling individual games tend to be exactly the kind of visceral games that trouble Mr. Chatfield, but for the past five years the most popular segment of the videogame market has been games rated E (for Everyone), comparable to a G-rating for films. The play's the thing.