It is important to realize that the number of new releases per year has massively grown over the years. In 1975 there were only 24 video games on a single available platform, Arcade. By 1987, just 12 years later, this number grew to 1,225 new games/year. Not surprising given the explosion of new platforms (see the blue, yellow and purple ‘hills’ on the left side of the figure). What is surprising though is that the number of new releases doesn’t really change till 2007, that is, for 20 years! In this period, the industry is dominated by two developments. First, platform consolidation. By 1998, 60-65% of games are developed for Microsoft’s Windows and DOS platforms and for the newly emerging Playstation. Even in the mid-2000′s Microsoft and Sony platforms own  70% of the new releases. Second, in this 20-year period, games become much more sophisticated, with the average development budget increasing from less than $0.1 million to $18 million.

Today, we are experiencing another revolution. It is largely due to the Internet and the associated explosion of a whole new generation of mobile hardware platforms (iPhone, iPad, etc.). In 2011, more than 730 games were released on the iPhone alone, which is only responsible for 15-18% of new releases. This means that the total number of releases in 2012 is around 4,000 games, four times more than the historical peak in the last 20 years! In other words, the Internet almost quadrupled the number of new games and we are just at the beginning of the life cycle of mobile devices.

Finally, it is interesting to see who the winners and losers are among the platforms. Playstation, the inventor of high-end games in the 90′s has lost most of its share. Wii, who emerged as a revolution in the mid-2,000s is not doing well. Apple, who dominates the new mobile platforms is a big winner of course. But as is Microsoft, whose Windows platform is still strong (not surprising, given the huge installed base) and who still owns the successful XBox platform.

The interesting questions are (i) how far will the growth go? (ii) who will capture it? (iii) in particular, will the (by now) dominant Android mobile platform be able to get a large share of the gaming apps in the near future? Stay tuned!