How the Video Game Industry Is Changing

The video game industry is growing and becoming a sprawling network of various technologies. What was once a very straightforward industry based on computers, consoles, boxed sales, and large publishers now includes multiple platforms, AI, and cloud-powered ecosystems.

Gaming is no longer purely entertainment, it has become a large social and cultural fabric of society, impacting relationships, culture, fashion, and how we spend our time.

Key Takeaways

• Gaming has grown into a massive, connected world thanks to cloud services, AI, and user-generated content, making it more accessible and creative than ever.
• Subscription models are changing the way people are thinking about “owning” games, with access and engagement now being more important than just buying a title.
• AI is speeding up game development and personalizing player experiences, but it’s also raising questions about creativity, fairness, and ownership.
• Games today aren’t just for playing; they’re major social and cultural hubs where people create, connect, express themselves, and launch careers.

Cloud Gaming Leading to New Audiences

Cloud services have democratized gaming. Previously, gaming required access to expensive consoles, high-priced individual games, and sometimes high-end computers.

Cloud services allow people to stream games directly to almost any device with a screen, such as a phone or tablet, removing the need to buy different consoles or expensive equipment.

With Xbox Cloud Gaming, NVIDIA GeForce NOW, or lesser-known platforms, gamers now have access to a multitude of games that they can play anywhere at any time; however, traditional consoles and PCs are still widely used and a major part of gaming.

The ease and low cost of cloud services have opened the door to new players that may have previously been priced out, especially in emerging markets. Cloud gaming removes the hardware barrier and shortens the gap between interest and play, which could greatly increase the global gaming population.

Subscription Models as Ownership

Along with cloud services, subscription models have become the norm in how people access games. Services like Xbox Game Pass, PlayStation Plus Extra, and Ubisoft+ offer access to hundreds of games for a flat monthly fee, much cheaper than having to pay a high price for one individual game as in the past.

For players, this is a large variety at a low cost, and for developers and publishers, this ensures a consistent revenue stream. For developers and publishers, rather than valuing the sale of one game, player engagement has become the primary driver of success: how long a player plays, how often they return, and how likely they are to maintain their subscription are the new drivers of value.

This type of value-driven viewpoint has led to the emergence of “evergreen” games, where the games are designed to evolve over time, with content being updated regularly and seasonal models keeping players continuously engaged. However, it’s important to note that subscription models haven’t fully replaced traditional game purchases.

AI Impacting Game Development

Artificial intelligence is changing how games are played as well as how they’re made. AI is being used to generate environments, animate characters, and test code extremely efficiently. AI is also helping to improve and advance storytelling.

With AI narrative design, branching storylines and dynamic conversations can adapt to the player’s choices in real time, which has an enormous impact on the pace and cost of production, as smaller design studios utilize AI to prototype games faster and produce content that before would’ve taken years.

Larger companies are also harnessing AI to personalize user experience, such as by tailoring difficulty levels to changing the narrative based on player behavior. However, as with many creative uses of AI, this raises questions about legality, copyright infringement, authorship, originality, and labor.

Note

The video game industry brings in more money than the film and music industry combined: $184 billion versus music ($28.6 billion) and film ($33.9 billion).

User Generated Content

User-generated content (UGC) in gaming today is an important feature, allowing players to create their own games, characters, levels, and skins. This transforms from pure play to creation and control. Platforms like Roblox, Fortnite Creative, and Dreams allow players to shape their own worlds.

These worlds become entire ecosystems where creators can earn money, build a following, and start careers from the work they do on these games. And publishers have paid attention.

Many large publishers are investing heavily in UGC platforms or building creator tools into their games. For example, Epic Games continues to expand Fortnite into a creation hub with revenue-sharing tools for builders.

Players want more than just to play a game; they want to customize games as a form of self-expression, and studios are acknowledging this by offering toolkits and marketplaces. Known as “prosumer,” producers and consumers come together to determine how games are made, consumed, and monetized.

Cross-Platform Gaming Is Essential

Gaming has long since passed being a time of solitude; today, gamers expect to play with their friends. Cross-platform support and cross-progression are necessary features for multiplayer games. Whether on a console, desktop, or mobile phone, players want uninterrupted access to their progress, purchases, and achievements.

Gaming as a Cultural and Social Domain

Games have become so much more than an individual interacting with a simulation; games are now a social and cultural sphere, where people meet, discuss, create, and attend events.

In-game concerts, brand partnerships, film screenings, and live Q&As are standard, especially within “metaverse-lite” experiences, like Fortnite and Roblox. These platforms are social meeting places, where players don’t just play, they also hang out together.

Even more traditional games have adapted to the changing landscape by incorporating social features, from in-game photo modes with shareable filters to co-op missions created for friend groups. Social media, so prominent in society, and gaming are becoming inseparable.

Brands and artists have paid attention and are taking advantage of the shift by reaching audiences in immersive ways. From Balenciaga skins in Fortnite to Travis Scott’s virtual concert in Fortnite reaching 27 million viewers, gaming is another important channel for cultural engagement.

Value, Ethics, and Accountability

Ethics, diversity, and other social attributes have become more prevalent throughout society and are important with younger generations; gaming is no different. Players don’t want to be passive consumers and want games to represent who they are.

Topics like diversity in character design and environmental sustainability are key concerns for gamers. Additionally, transparency in how games are monetized, such as pay-to-win features and loot boxes, is essential, and regulatory oversight is increasing.

Companies that don’t focus on diversity, in areas such as cultures, experiences, and identities, risk alienating younger generations who care about these issues.

What Is the Largest Gaming Company in the World?

Nintendo is the largest gaming company in the world in terms of market cap. As of November 2024, it had a market cap of $65 billion. After Nintendo is Electronic Arts ($42.8 billion).

Is the Video Game Industry Bigger Than the Movie Industry?

Yes, the video game industry is significantly bigger than the movie industry, with video games bringing in approximately $184 billion in revenue in 2024 and movies about $34 billion.

What Is the Most Popular Video Game?

The most popular video game is “Minecraft.” It has sold over 240 million copies since its release.

The Bottom Line

The gaming industry is not just about playing games anymore; it’s a large part of how certain groups of people socialize, absorb culture, and express who they are. With cloud gaming, subscription models, AI-driven development, user-generated content, and the rise of cross-platform play, gaming has become more accessible, creative, and interconnected than ever.

At the same time, players are asking more from the industry when it comes to ethics, diversity, and transparency. As gaming continues to evolve, it’s evident that it’s not just a pastime; it’s a powerful cultural force shaping how many people live, connect, and create.