Washington state ranks No. 2 nationwide for annual video game industry economic output at $11.6B

Washington state’s video games industry overtook Texas last year and claimed the No. 2 spot for total economic output, as the U.S. video game industry grew to new heights yet again.

a person standing next to a bag of luggage: ( Halo Infinite Photo)

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( Halo Infinite Photo)

Those are two takeaways from a new report published by the Entertainment Software Association (ESA), the games industry’s trade organization in the U.S.

In Washington state, the local games industry represents 48,808 jobs, with an economic output of $11.6 billion. This puts it ahead of all other states besides California, which has an effectively insurmountable lead. A little over half of all game development nationwide is done in California, which accounts for $51 billion of the more than $90 billion in economic output generated nationwide in 2019.

The ESA defines “economic output” as “the total value of the goods and services produced in the economy.”

Washington has been an important overall part of the U.S. games industry since the 1980s, when Nintendo opened its American subsidiary in the state, right in time for the original NES to take over the world. The subsequent foundation of other companies, such as Microsoft’s Xbox project, Wizards of the Coast, and Amazon Game Studios, further raised the state’s profile.

application: (ESA Graphic)

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(ESA Graphic)

The ESA tracks 151 publishers, developers, hardware companies, universities, and other assorted businesses in Washington that are associated in some way with the state’s games industry. The listed companies range from one-person shows like Eastshade Studios to corporate multinationals such as Microsoft, Twitch, and ArenaNet.

The ESA’s report notably does not count quite a few companies that have recently opened up or moved to the Seattle area, such as the studios under the ProbablyMonsters umbrella, which added a third team earlier this year; Kalypso Media, a German game company which announced this week that it’s moving its American headquarters from New Jersey to Seattle; or Lightfox Games, the makers of Super Battle League led by former employees of Z2, another Seattle studio acquired by King in 2015. Some are simply too new to make the list, such as the mobile startup Starform, or haven’t released a project yet that would’ve required them to contact the ESA.

Washington’s games development scene was never quiet, but it’s getting distinctly hotter as the industry itself heats up.

The Washington Interactive Network, a nonprofit organization that works to build a community around the interactive media industries in the state, cites several factors for Washington’s continued strength in the industry, including the lack of a state income tax for corporations and individuals and a central location for easy international flights.

a close up of a toy: Super Battle League is the first game from new Seattle studio Lightfox Games, founded by former Z2 employees. (Lightfox Games Image)

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Super Battle League is the first game from new Seattle studio Lightfox Games, founded by former Z2 employees. (Lightfox Games Image)

Notably, the ESA’s report comes three days after an announcement by the NPD Group, an independent market research firm, which discusses this year’s rapid upward trends in the American video game audience and confirms that a lot more people have been playing games this year amid the pandemic.

NPD reported a big uptick in every demographic and on every platform. More people are playing video games now, they’re playing them for longer, and they’re spending more money on them. This goes hand-in-hand with a general decrease in spending for other entertainment industries; nothing is open, so many Americans have stayed home to play Call of Duty and Animal Crossing instead.

The overall increase is dramatic, with Americans from age 45 to 54 spending up to 76% more money on video games compared to last year. A full four out of five American consumers reported to NPD that they’d played a video game in the previous six months, and spent on average 26% more time and 33% more money on the hobby than they previously had.

With two new major console launches from Sony and Microsoft, the continued popularity of Nintendo’s Switch, and a flurry of third-party game releases (the biggest of which, Cyberpunk 2077, hasn’t even come out yet), 2020 was always going to be a big year for the video game industry, both in the state of Washington and worldwide.

The big question now, going into 2021 and with the hope of an end to the COVID-19 pandemic, is whether video games can retain that audience engagement. It might be able to ride it to a new level of overall success, or if there could be a sharp reversal once other forms of entertainment are able to spin back up.

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