Entertainment software 87 Asia Pacific Journal of Marketing and Logistics Vol. 19 No. 1, 2007 pp. 87-100 # Emerald Group Publishing Limited 1355-5855 DOI 10.1108/13555850710720920 Received October 2005 Revised May 2006 Accepted June 2006 Entertainment software: suddenly huge, little understood Frank Alpert UQ Business School, The University of Queensland, Brisbane, Queensland, Australia Abstract Purpose – In less than three decades the entertainment software industry has emerged as a huge industry, with sales larger than Hollywood movie box office sales. Yet, little is known about this industry. Stereotypes about the industry may not be correct. This paper seeks to address this knowledge gap. Design/methodology/approach – The paper identifies what is known, and what needs to be known. The paper reviews the literature and adds data from the most recent reports available. Findings – The literature has been slow to address this industry. It has not even been clear what to call this industry. (Some people still call it the video game industry.) The most basic marketing issues still need to be researched, i.e. customer benefits sought and segmentation. A typology of game genres is proposed. Originality/value – This paper is the first overview of the entertainment software industry from a marketing perspective. Keywords Entertainment, Computer software, Video games, Marketing, Benefits Paper type Viewpoint The worldwide video game industry, with revenues of $24.5 billion last year, overtook movie box-office receipts, and sales are expected to soar to $55 billion by 2008, according to PriceWaterhouseCoopers. (Grover, 2005) Opening-week global sales for Microsoft’s Halo 2 sci-fi game, for the Xbox, reached $125m, beating the $108m taken by Shrek 2, the biggest film of the year. (Marketing Week, 2004) By now everyone knows of the video game industry, but people may still be surprised at how big it has become. From virtually nowhere 20 years ago to US$24.5 billion in 2004. The video game industry has now overtaken the movie industry box-office receipts in terms of annual sales, and blockbuster video games can out perform blockbuster movies for opening-week sales. Furthermore, respected forecasters predict sales will double in the next four years (PriceWaterhouseCoopers forecast quoted above). Movie industry downstream revenue (TV broadcast, DVD/VHS rentals, DVD/ VHS sales) make the total movie industry larger, but the computer and video game industry is expected to surpass total worldwide recorded music industry sales in just a few more years. Any way you look at it, this games industry has become very big business. The popularity of the computer and video games industry may have caught many managers and researchers by surprise, perhaps because many of the writers of analytical articles are of an earlier generation than that which has grown up with these games. ‘‘Has there ever been a cultural sea change as stealthy as the one represented by the rise of interactive entertainment? To anyone who came of age after, say, the introduction of the first Sony Playstation in 1995, video gaming is every bit as central to the pop-entertainment universe as movies or music... . No one would think of denying that video games are big, but few grown-ups outside the business have an understanding of just how big they’ve become’’ (Dee, 2003) (Figure 1). The current issue and full text archive of this journal is available at www.emeraldinsight.com/1355-5855.htm