Evolution of the Video Game Industry: Key Trends and Milestones

The first significant phase of the video game industry began in the late 1970s with the release of home consoles like the Atari 2600 in 1977, a device that allowed gamers to play a variety of arcade-style games in their own homes. Prior to this, gaming was largely confined to large, expensive arcade cabinets, making it an experience limited to public spaces. The Atari 2600 revolutionized the industry by offering a library of games that could be played on a single machine at home. Notable titles during this era included "Space Invaders" and "Pac-Man", which became cultural phenomena.

The early 1980s also saw the rise of other home consoles, including the Intellivision and the ColecoVision, as well as early computer gaming on platforms like the ZX Spectrum and Commodore 64. The video game industry during this period was still in its infancy, primarily targeting a young, male audience. However, the market would experience a massive setback in 1983 with the infamous Video Game Crash, caused by a perfect storm of economic pressures, a flood of poorly made games, including the notorious "E.T. the Extra-Terrestrial" for the Atari 2600 and market saturation. Atari, which was the dominant player in the industry, was hit the hardest. Their overproduction of games and consoles, combined with their failure to ensure quality, caused them to suffer massive financial losses. By 1984, Atari’s parent company, Warner Communications, sold off the division, and Atari’s dominance in the market effectively ended.

The video game industry was resurrected in 1985 when Nintendo introduced the Nintendo Entertainment System (NES). With a focus on higher-quality games and strict control over third-party developers, Nintendo ushered in a golden age of gaming. Titles such as "Super Mario Bros.", "The Legend of Zelda", and "Metroid" became iconic and established Nintendo as a dominant force in the industry.

Sega also entered the market in the late 1980s with the release of the Sega Genesis (known as the Mega Drive outside North America). Sega's 16-bit console and one of the most iconic gaming systems of its time. It marked a major leap forward in terms of graphics, sound, and gameplay compared to the 8-bit systems of the era. The Genesis became Sega’s most successful console and gave rise to the famous rivalry between Sega and Nintendo in the early 1990s.offering a competitive alternative to the NES and fostering a long-standing rivalry with Nintendo.

The 1990s saw the release of more advanced gaming consoles like the Super Nintendo Entertainment System (SNES) and the Sega Saturn, which pushed the boundaries of what video games could be. This period also marked the entry of Sony into the industry with the launch of the PlayStation in 1994, which would become one of the most successful consoles in history. While Sega and Nintendo still appealed primarily to younger gamers, Sony began attracting a slightly older demographic with titles like "Final Fantasy VII" and "Metal Gear Solid."

During the 1990s, gaming started to move beyond its traditional audience of young boys and teenagers. Female gamers, who had previously been a minority in the gaming community, began to gain more visibility as certain genres and games targeted broader audiences. Puzzle games like "Tetris" and simulation games such as "The Sims" appealed to both men and women alike, offering non-violent, non-competitive gaming experiences. Gaming’s appeal also expanded to older players, especially through the rise of more accessible and less time-demanding games. While the industry was still largely male-dominated, this decade laid the groundwork for the inclusive trends that would develop in the 2000s and beyond.

The rise in popularity of gaming amongst older gamers is something that saw a revival during the Covid pandemic with a rise in social gaming a key feature of behaviour. Get access to all the insights on this by downloading Bryter’s ‘The impact of lockdown on gaming behaviours’ report

The late 1990s and early 2000s witnessed one of the most transformative trends in the gaming industry: the rise of online multiplayer gaming. Early online games, such as "Quake" and "Ultima Online," were groundbreaking, allowing players to connect via the internet and engage with others from around the world. However, the real turning point came with Massively Multiplayer Online Role-Playing Games (MMORPGs), such as "EverQuest" in 1999 and "World of Warcraft" in 2004. These games fostered vibrant virtual worlds where players could not only compete but collaborate in teams, forming online communities that persisted outside the game itself. Entropia Universe (2003): Entropia Universe brought real-world currency directly into virtual real estate markets. Players could buy, sell, and trade land with real money. The game saw some massive virtual real estate sales that made headlines, with some properties being sold for hundreds of thousands of dollars.

The evolution of online gaming coincided with advancements in internet infrastructure, particularly broadband, which allowed for more seamless multiplayer experiences. Console gaming also embraced online capabilities during this period, with the launch of services like Xbox Live in 2002, which allowed players to chat, trade, and game together over the internet. Online multiplayer gaming fundamentally changed the social fabric of video games, making them not just solitary experiences but social hubs where friendships and rivalries were forged.

But, online gaming wasn’t just a place for friendships to develop. With the rise of MMOs, toxicity began to take new forms. In Ultima Online, players engaged in griefing by killing other players (PKing), looting their corpses, and exploiting game mechanics. The open-world, persistent nature of these games allowed bad actors to continually harass other players, leading to the creation of in-game law enforcement and community moderation.

World of Warcraft’s massive player base led to the formation of guilds, factions, and competitive environments. With the increasing anonymity afforded by larger player pools, toxic behavior such as elitism, harassment of new or less skilled players, and verbal abuse became common, especially in competitive player-vs-player (PvP) environments and group-based dungeons.

Bryter has been tracking the experiences of female gamers for the more than five years, with part of this analysis focused on their experiences of online multiplayer gaming. Toxicity is a continuous challenge facing the industry as harassment of female players by their male counterparts has pushed them away from the online arena. You can read more about this and other key insights in our female gamers study 2023

A game-changing development in the late 2000s was the rise of mobile gaming, particularly following the release of Apple’s iPhone in 2007. Early mobile games were relatively simple, often casual titles like "Angry Birds", "Temple Run", and "Candy Crush" that catered to a broad, non-traditional gaming audience. Mobile gaming democratized access to video games, making it possible for people who might not own consoles or gaming PCs to enjoy gaming on their smartphones.

Mobile gaming exploded in popularity throughout the 2010s due to its accessibility and low barrier to entry. Unlike console gaming, which required specialized hardware and often more expensive software, mobile gaming required only a smartphone, which most people already owned. The freemium model, where games are free to download but offer in-app purchases, also contributed to the massive growth of the industry. Games like "Clash of Clans", "Pokémon Go", and "Fortnite" demonstrated the potential of mobile platforms to reach millions of players across all demographics.

The mobile gaming industry is a massive and rapidly growing sector. In 2023, the global mobile gaming market reached approximately $99.74 billion and is projected to grow at a compound annual growth rate (CAGR) of 9.6% between 2024 and 2032. By 2032, the market is expected to be worth around $227.55 billion.

In 2022, mobile gaming generated $103.5 billion in revenue, accounting for more than half of the global gaming market, which was valued at $196.8 billion. This makes mobile gaming the largest segment in the gaming industry.

Importantly, mobile gaming’s rise helped break down traditional gaming stereotypes. By the late 2010s, nearly half of mobile gamers were women, making mobile platforms one of the most inclusive spaces in gaming. The simplicity and pick-up-and-play nature of mobile games attracted older gamers as well, broadening the demographic reach of the video game industry even further.

Another major trend in the 2010s was the explosive growth of eSports, or competitive video gaming. Although competitive gaming had existed in some form since the early 1990s, it was in the 2010s that eSports became a global phenomenon. Games like "League of Legends", "Dota 2", and "Counter-Strike: Global Offensive" attracted massive audiences, both in-person at tournaments and via live-streaming platforms such as Twitch. Professional gamers became celebrities, and eSports tournaments began offering prize pools that rivaled those of traditional sports competitions.

eSports also led to the rise of dedicated gaming organizations and teams, akin to sports franchises, with sponsorship deals and branded merchandise. This legitimized gaming as a professional pursuit and further expanded the industry's audience, attracting those who might not play video games themselves but enjoyed watching competitive play.

Bryter’s 2022 female gamers streaming and esports report focuses on behaviours and attitudes to eSports & streaming and is an invaluable tool if you want to better understand the US, UK and Chinese gaming markets on this important subject.

Parallel to the rise of eSports was the increasing influence of content creators on platforms like YouTube and Twitch. These individuals, often gamers themselves, built massive followings by creating videos and live streams of gameplay, commentary, and reviews. Let's Plays, tutorials, speedruns, and reaction videos became wildly popular, turning content creators into key influencers within the gaming community.

Content creators began to play an essential role in shaping gaming trends, as their endorsements or critiques could significantly impact a game’s popularity. Companies began collaborating with these influencers to promote new games or updates, recognizing their ability to sway large audiences. The symbiotic relationship between content creators and game developers has become a defining characteristic of modern gaming culture.

Bryter's 'the power of content creators in gaming' report looks at this topic. With gamers spending a quarter of their time watching others play versus playing themselves, it can be a vital channel for engaging with players and driving acquisition 

Want to know more?

Learn more about how insights can help game developers, publishers and hardware manufacturers in ‘the ultimate guide to market research for video game developers’