At 50, the video games industry is grappling with its sense of self

Atari SA updates

Earlier this month, while Tokyo was distracted by the Olympics, one of the city’s most famous games arcades announced on the quiet that it was closing down for good. The Sega GiGO — nine floors of fun in the Ikebukuro district for almost three decades — gone.

A great sob of geeky grief is not, perhaps, the most auspicious way for the global video games industry to mark its 50th year. Commercial video games, as distinct from the various tinkerings going on in universities during the 1950s and 1960s, are now a half-century old. Slightly younger than snowboards and man’s first step on the Moon, slightly older than the Post-it note and voicemail. 

The route that led the industry to become a leviathan with $178bn in annual revenues and three billion regular players was bumpy. Tech innovation invariably is, though with games this is especially true.

In 1971, Nutting Associates’ Computer Space — an arcade game built into a fibreglass cabinet and marketed with scantily dressed models — broke the dam. An industry flooded in, almost fully formed and as if it had always belonged. Within six years, Atari released a home console that sold 30 million units. Within 12, Nintendo released one that sold 61 million. 

When I first visited the Sega GiGO arcade in the mid-1990s, as games were hitting their quarter century, it was to find that branch of technology in a moment of thrilling and preposterous confidence. Games were the heir presumptive of global entertainment, impatient for the formal coronation surely to come. Another quarter of a century later, what kind of a 50-year-old has the games industry become?

“Golden ages” have been variously declared at different points throughout gaming’s history but, while business clearly has been boosted by the pandemic, and the capacity to surprise and delight remains infinite, it is not obvious that we are in one now. 

As with other mature creative industries, certain parts feel saggy and out of shape. Others look sinewy and over-flexed. While some aspects of the games business look boldly innovative, some look rent-seeking and coldly exploitative.

In early August, when an apparently waters-testing article in Chinese state media accused the games industry of having become a “spiritual opium”, the revelation was not so much Beijing’s mode of thinking or even the immediate impact on certain share prices, but the achy shrug with which the 50-year old seemed to admit, “Yeah, maybe.”

The past has an awkward way of catching up with the games industry, as it has with others reaching a certain age in the early 21st century. Within just two years of Computer Space, and on its own route to global fame, Atari released an arcade kiss-chase game whose controllers were pink rubber domes intended to represent breasts. A folly of industrial immaturity, perhaps, but 48 years later a separate company, Activision Blizzard, is being sued by the state of California in a suit that alleges years of harassment and abuse towards female staff.

The suit follows a two-year investigation into the “frat boy” culture at Activision Blizzard by California’s Department of Fair Employment and Housing, and opens with the assertion that “sexism has plagued the male-dominated industry for decades”. Activision Blizzard has said that it is committed to long-lasting change and that there is no place in the company for discrimination, harassment or unequal treatment of any kind.

Such accusations do not appear isolated: a year earlier, in France, Ubisoft was forced into a management clear-out amid allegations of “toxic behaviours”. Female executives of several Japanese games companies describe unremitting sexism, but expect no such redress. Highly decorated indie studios, the small-batch auteurs of the industry, aren’t immune from toxic work cultures either.

The closure of Sega’s GiGO arcade and the admission of changing times is a good thing — once the tears of nostalgia dry. Sega today operates 80 per cent fewer Japanese arcades than it did when the Ikebukuro flagship opened because the industry, at 50, remains one that knows both how its customers change and how to get rich. If governments decide they don’t like what they see, and if staff decide they don’t like who they are working for, the next question may be what a $178bn industry’s midlife crisis looks like.

Leo Lewis is the FT’s Asia business editor

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