When one thinks of the industries that drive the City of Angels, they may be inclined to gravitate towards Hollywood. Despite mounting competition from overseas and regional markets, the film industry of Los Angeles country is still the largest in the world in terms of revenue, and remains the most visible face of the local economy.
Others might be quick to mention other highly visible industries that dominate LA, such as banking, social media, real estate, fashion, and marketing. However, one area that receives comparatively little attention is Los Angeles' sprawling video game sector.
Across California, there are a total of 900 video game companies employing 33,000 people, with the vast majority of these being split almost evenly between Los Angeles and San Francisco.
Across California, there are a total of 900 video game companies employing 33,000 people, with the vast majority of these being split almost evenly between Los Angeles and San Francisco. In Los Angeles, one can find the global headquarters of some of the largest and most influential gaming companies and development studios in the world, as well as the US bases of many global giants.
The LA gaming industry generates billions of dollars in revenue every year and exports best-selling games to every corner of the globe. Let's take a closer look at how Los Angeles became the global capital of the video game industry.
A Magnet for Gaming Talent
First off, it's worth noting that Los Angeles's competitive advantage stems from its rich pool of local talent. Previous analyses of the local industry have noted that the presence of pioneering film animation studios such as Pixar and DreamWorks helped to cultivate a generation of highly talented CGI developers, many of whom have been scooped up by the gaming industry.
In addition, the dominating cultural presence of Hollywood has given gaming companies readily available access to big-name actors and voice actors that have boosted the profile of locally developed games. Mark Hamill's role in the Batman Arkham Games and Ellen Page's role in Beyond: Two Souls are just a couple of examples of this competitive advantage at work.
Home to Industry Titans
The dominance of Los Angeles is exemplified by the gaming industry titans that call the city home. Electronic Arts, which produces the Madden, FIFA, and Battlefield games, has a sprawling complex in Playa Vista. Activision Blizzard, the company behind the Call of Duty and Guitar Hero franchises, operates out of sunny Santa Monica. Riot Games, which operates one of the largest online games in history, League of Legends, has its swanky headquarters in Studio City. In addition, global giants such as PlayStation and Nintendo both employ hundreds of people, who use cutting-edge game animation software for producing engaging content.
The Epicenter of the Gaming Events Circuit
One of the most significant facets of the LA gaming industry concerns gaming events, with many of the world's biggest gaming conferences that are highlights of the industry calendar taking place in the city. E3, which is arguably the premier gaming conference on the planet, and the event which many developers stake their fortunes on, takes place every summer at the LA Convention Center. In addition, the LA Games Conference, which is held at the W Hotel every year, is another major event for developers from all over the world.
Room for Improvement?
Of course, that's not to say that the dominance of Los Angeles in all fields of the gaming industry is assured. One area where there are glaring gaps is the online gambling industry. The global market for real-money online games is now estimated to be worth $53.7 billion - more than half of the estimated size of the global console gaming market. Despite this, there are virtually zero sizeable online casino games companies based in Los Angeles. Many of the game developers that are recognized as the largest software developers for slots games, for example, are based in Europe. There is the Sweden-based game studio NetEnt, the UK-based Playtech, and the Germany-based Merkur Gaming, to name a few. Los Angeles has a lot of catching up to do in this regard.
What the Future Holds
The future of the gaming industry of Los Angeles nonetheless looks bright. As it continues to be recognized as an epicenter for gaming, more promising companies, and talented developers, will flock there. The greatest threats to Los Angeles's pre-eminence right now come from Europe and the San Francisco Bay Area. Its future performance will depend largely on its ability to compete.
The gaming sector of LA is a major source of tax revenue, employment, and soft power. Whether this will remain the case well into the future remains to be seen.
Nicky Peterson is a freelance writer based in New Zealand. She has been involved in numerous editorial projects over the years and currently blogging around the entertainment, business, and finance industries.