Video Games Are Among Media’s Biggest Business

The video gaming industry is growing 20 percent each year, has long exceeded box office revenue, and with hardware accounts for about $50 billion a year in business, said Paul Campbell, ’93, founder of Hewlett-Packard’s gaming division. “It has expanded rapidly, in part because gaming has changed from an insular, isolated activity to a social, interactive game,” Campbell said during the first keynote address at the Inaugural Media & Entertainment Conference at Harper Center January 17. “Of all the entertainment media out there, gaming is interactive and almost more social than anything else.”

In the last few years, about 150 start-up companies have been launched in just gaming hardware and services, with another 500 start-ups in other areas of the industry, he said. “A large amount of money is being placed in gaming,” Campbell said. “If it’s not the number one, then it’s certainly the number two area of interest in the Bay area and Silicon Valley for VC money. As a result, great innovation is happening.”

Along with an increase in hardware platforms, gaming will soon feature better, more interactive, and more mobile displays, he said. “Wherever you go, you will be able to play,” Campbell said. He predicted the competing platforms currently used to play games will be consolidated in the next few years to make it easier to develop new products. “It’s a big, complex problem to develop games for different platforms,” Campbell said.

Gaming has expanded into a variety of new genres that have attracted more players who are older and female, he said. The industry recently began creating opportunities for players to create their own games, Campbell said. “In other entertainment, there has always been some ability for users to create their own content,” he said. “Before now that did not exist in gaming.”

Among the developments in the evolution of gaming’s business model are charging user fees to advance to the next level of a downloadable game, and the possibility of inserting advertising into games, Campbell said. “Part of what we’re going to see in the next couple of years is, how will the development costs of games be subsidized?” he said.

A self-proclaimed “gamer,” first-year student Jan Smith said Campbell’s talk was one reason he chose to attend the conference. “He was one of the drivers for me,” Smith said. “I’m very interested and very tempted by the gaming industry, but it’s my Plan B at the moment. Right now I’m interested in consulting, because coming out of business school I feel I could always move back into another industry like gaming later on. But if I went into gaming right now, I would have a harder time moving into something like consulting.”

The decision of the student-led GSB Media and Entertainment Group to present its first Media and Entertainment Conference is evidence of the recent increase in attention on media and entertainment at Chicago, said Ann Harvilla, associate dean and dean of students for the Full-Time MBA Program, who opened the conference. “It’s been incredible to see the growth of student interest in media and entertainment over the last few years and the shift of the school’s support of the industry,” Harvilla said.

--Phil Rockrohr