Today’s video gaming industry is big business with total revenues for the industry in the U.S. hitting $23.5 billion last year—a 5% jump over 2014, according to the Entertainment Software Association, the industry lobbying body, which also hosts the Electronic Entertainment Expo trade show. All the major industry players—software and hardware—are reaping profit margins at record levels, with software sales leading with some $16.5 billion a jump of 7% from the 2014 figures and hardware manufactures seeing their best sales ever. The prediction is that this growth trend will continue mainly because software sales are largely viewed as the best barometer of the industry’s growth and overall health.

Figure 1: The VR gaming experience is leading the way to an even more immerse video game experience. Source: iStock

The Driving Force

Driving this growth in the video game industry is a plethora of micro industries, and each is driving innovation, whether it’s creating more complex and demanding software for video games or developing the hardware to support them. The aggregated result reveals a very robust video gaming industry that’s driving innovation on par with a host of other technologies like drones, smartphones, brain mapping, 3D printing, robotics, smart wind, and solar power, and mobile collaboration. The convergence and maturation of all these technologies such as 3-D rendering, networking speed, video resolution, processor speed, memory, storage and accessibility via low cost video game platforms has not only helped fuel demand, but has increased the breadth of video game culture across many platforms and multiple formats (e.g., bringing Pokémon to mobile phones as figments of augmented reality.)

The Gamer’s Culture

The social interaction enabled by internet-hosted platforms where hundreds of gamers interact in the same game (e.g., World of Warcraft) and share their gaming experience and comradery (e.g., forums)  have created a unique demand across all generations that has led to about half of American adults (49%) to play games on computers, consoles, television, or mobile devices. And 10% of those adults consider themselves to be “gamers.”

Figure 2: Demographics of those who play video games. Source: Pew Research Center - Survey conducted Jun 10 - July 12, 2015

Another contributing phenomenon is the emergence of gaming as a spectator sport, something like Sunday Night Football. Whether this will grow to Olympic proportions remains to be seen, but dedicated video game-streaming channels have become well-known internet sites, such as Twitch, which apparently claims to be the world's leading video platform and community for gamers with more than 45 million gamers. YouTube Gaming is another streaming venue, where gamers are connected to favorite games, other players, and have developed a culture that matters to them.

Figure 3: Equal numbers of men and women ever play video games, although men are twice as likely to call themselves “gamers”. Source: Pew Research Center Image: iStock

“Video games are a better form of entertainment than watching TV” – Three-in-ten adults do not think video games are a better form of entertainment than television, almost triple the 11% who think most video games are indeed a better form of entertainment than TV. Source: Pew Research Center

Evolution of the Video Game

Early arcade video games of the 1970s consisted of single-colored squares; pixilated images on a cathode ray tube (CRT). These early video games were extremely low resolution by today’s standards, but soon incorporated 256 colors and antialiasing to smooth out the graphics giving early game players at least an illusion of smoothness and action.  Soon these early games progressed to include joysticks with lots of buttons, followed by game controllers with active haptic feedback, and of course flat LCD displays. Dedicated gaming platforms appeared, including massive hard-disk storage and memory. Price drops in flat monitor displays triggered trend in gaming across multiple monitors. Dedicated gaming platforms evolved to include premium audio and WiFi connectivity. 

Today’s modern video games have evolved to test and push the limits of the latest gaming hardware. Faster central processing units (CPU), dedicated graphical processing units (GPU), ultra-high-definition (UHD) displays and high fidelity surround sound have fused to deliver amazing realism. For those who were still asking, “What’s Next?” along came virtual reality headsets like Oculus Rift and HTC Vive, who are leading the way to an even more immersive video game experience. It’s literally possible to live in a VR world for 100% of one’s social life. Large, old, overweight men are tiny fairies and elven creatures in second life. The beauty of the gaming world is in being able to live out your fantasies as another person. The ugly of the gaming world is that anonymity breeds a sense, in some gamers, that behaving badly has no consequences; and this is mostly true for the one dishing it out, but not for the one receiving it.

Technical Jargon—FPS, Hz, 4K and Beyond

Many gamers don’t seem to care about detailed technical specifications behind the video games they play. But they can’t escape the exposure to acronyms associated with video games: 4k, FPS, Hz, 1080P, GPU…and these acronyms are printed on retail boxes housing the newest game or hardware. Without getting into the weeds on the details, let’s instead just clear up some common misconceptions with FPS and refresh rates:

·       FPS: Frames per Second, which refers to how many distinct images a GPU outputs, per second. In gaming with lots of action, the higher the FPS, the better. (Full motion video is considered as 30FPS. The ability to render graphics greater than 100 FPS is possible with a top-of-the-line platform, but most people will not notice improvement beyond 150 FPS. See Figure 4.)

·       Refresh Rate = Number of times a screen is capable of displaying per second, measured in frequency (Hz).

Therefore, if your refresh rate is 60Hz, your framerate is capped at 60 FPS. Since your GPU is now producing fewer frames per second, you can take advantage of the GPU’s left over capacity to increase resolution, draw distance, or other graphics quality settings. However, if you have a 60Hz monitor, and the platform is putting out 120 FPS, you only actually display 60 frames. Likewise, if you have a 120Hz monitor and 75 FPS output, you will see 75 unique frames on the display.

Today’s displays are pushing the envelope well beyond mere 4k resolution and 120Hz refresh rates. GPUs are capable of frame rates in excess of 120-140FPS (and higher tomorrow, as of this writing). GPUs have onboard memory upwards of 8GB of GDDR5X (as of today) with speeds ball-parking at 10Gbps. The future looks brighter every day for a fusion of technologies, making some form of holodeck within reach in a young gamer’s lifetime.

Figure 4: Comparison of modern graphic cards -FPS. Source: PCGamer.com Source: https://www.pcgamer.com/the-best-graphics-cards/

The Perfect Storm—Convergence of Technology, Economics and Demand

Ultimately, what delivers the best gaming experience to the gamer is a balance of price and performance. This balance is a combination of a game’s software and graphics demands, the hardware to support it, and the industry’s ability to deliver it to the masses at an optimal price point. Video games are meant to be played by “gamers” and “game players” alike. Whether or not a platform can successfully render a demanding game such as the latest version of Crysis or the much-anticipated Star Citizen, ultimately the sustaining force behind the gaming industry is not the video games but the people who play them and the culture they perpetuate.