How does the video game industry work? How and why do we get certain titles on shelves and who gets the money we pay to play that next awesome game we’ve been reading about on Game Informer for the last year?

Here is the short of it (well maybe not that short): there are six major players in the video game industry:

1. Content Providers: When a game is created not from an original idea it normally includes a certain amount of licensed content. Content providers are those who license out (grant use in exchange of a royalty rate for a certain amount of time) such licenses (such as NASCAR, The Lord of the Rings, and Tiger Woods) to publishers.

2. Developers: Developers are the creators of a game, like Valve or Blizzard Entertainment. These are normally specialist development companies and/or publishers’ in-house personnel.

3. Publishers: Specialist software publishers are responsible for the overall management of a game’s development, its packaging, manufacture, distribution, marketing, and more often than not, funding. Examples of publishers are Activision, Electronic Arts, and Ubisoft.

4. Platform Providers: Microsoft, Nintendo and Sony are the dominant platform providers. These companies manufacture and sell their platforms to retailers while selling the right to creating video games for their consoles to publishers.

5. Distributors: Usually represented by specialist distributors or directly by the publishers.

6. Retailers: Principally mass vendors (Wal-Mart, Target), specialist software retailers (GameStop), electrical goods shops, online vendors (Amazon.com), and digital distributers (like Steam)

The picture shows how games’ production flows through the industry’s main operators.

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