With roots in ancient prehistory, the video game industry sprung forth from the combination of technological advancement and mankind’s perpetual need for mental stimulation. It would go on to become a dominating entertainment force, outgrossing the global film and music industries combined.
Pokémon is the world’s highest-grossing media franchise, having made somewhere between 90 to 100 billion since its debut in 1996. Grand Theft Auto 5 is the highest-selling single entertainment product in human history, having sold over 125 million copies and grossing $7.7 billion—more than twice as much as the highest-grossing film of all time.
The rise of this industry has necessitated a rise in its advertising. In 2023, Nintendo was estimated to have spent over $168 million in advertising. Today, we’re going to take a deep dive into the history of gaming, from ancient dice made of bone to the modern landscape and projected future of video games and tabletop gaming.
We’re going to start this story out maybe a little further back than you expected. Instead of Xbox, we’re going to talk about excavations. By exploring the fundamental appeal of gaming, we can understand why it persists so strongly to the modern day.
The history of gaming stretches far back before the digital realm. It’s embedded in our bones, literally dating back to the ingenuity and curiosity of ancient civilizations. To survive in the harsh pre-civilization world, the human mind had to evolve to reward problem-solving and success against the odds with a rush of dopamine. Playing games forces this response.
Evidence of gaming extends back at least as far as 5,000 years ago with the discovery of dice in Mesopotamia and Egypt. These early dice were made from bone, stone, or animal teeth, and they weren’t just for entertainment. They were used for decision-making and even to divine the future. The suspense of rolling the dice and interpreting the outcome has captivated humans for millennia. This fascination with randomness, calculated risk-taking, continues to be a core element of many modern games.
Beyond dice, ancient civilizations also embraced the challenge and engagement of board games. Chess, believed to have originated in India around the 5th century BC, is a prime example. Games played today in bustling public squares and high-stakes tournaments stand as a testament to the enduring appeal of chess.
And it’s not hard to see why. I am very much not a great chess player by any means, but I remember how when I was learning the game’s basic opening strategies, I would start to dream of chess moves. Not just dreaming about playing chess, but I would dream about the real-world problems and scenarios that I was having in my head, and I’d find myself recontextualizing them in terms of chess strategies to work them out.
This mentality carried forward into the 19th century when Europe witnessed the rise of war games in German. These games, often simulating historical battles or military campaigns, further solidified the strategic and competitive elements that continue to be central to many video games today. Early war games, with their detailed maps, miniature figures, and complex rule sets, laid the groundwork for the tactical depth and strategic planning seen in modern video games like the Civilization and XCOM series, as well as the tabletop strategy role-playing games like Risk or Dungeons & Dragons. These games offer players a unique opportunity to analyze historical situations, strategize like military commanders, and experience the thrill of combat in a tabletop setting.
Examining these analog ancestors allows us to appreciate the rich diversity of gaming. Understanding the industry’s roots helps us to better appreciate the historical significance of gaming, its enduring appeal, and its continued ability to engage, challenge, and entertain players across generations. From the simple act of rolling the dice to the complex maneuvers of chess and the strategic planning of war games, these early forms of entertainment laid the foundation for the thriving and ever-evolving digital gaming landscape that we know today.
Of course, many of these ancient games are just as popular today as they were millennia ago. You can find all kinds of classic gaming products like dice, chess boards, and more in SAGE. These timeless games continue to be a popular choice for promotional products, offering a tangible connection to a long lineage of entertainment.
Let’s fast forward to the early 20th century when we witnessed the rise of early modern gaming. This era saw the convergence of mechanics and imagination, giving birth to truly iconic experiences.
Pinball machines, mechanical marvels of the time, combined physical components with very simple scoring systems, offering a blend of skill and chance that captivated players. Remember the flashing lights, all the clangs, and just the pure joy of really mastering a machine. This interactive experience created a lasting impression. It leaves a far deeper impact than a typical pamphlet or a flyer. We in the promotional products industry understand the value of non-traditional marketing. Pinball machines, beyond just their addictive gameplay, have served as an unexpected ambassador for various brands, franchises, and artists throughout history.
Just looking back into the Golden Age of pinball in the 60s and 70s, there was a surge in movie tie-ins. Iconic films like Star Wars, Star Trek, The Godfather, The Addams Family, all of these found their way onto the pinball playfields, immersing players in beloved movie scenes and characters. The music industry wasn’t shy about it either. Bands like Kiss, The Who, and The Beatles saw their music blasting from customized machines, often featuring band members, logos, and other iconic industries. Even literary giants and cartoon characters weren’t spared. J.R. Tolkien’s Lord of the Rings and Hanna-Barbera’s The Flintstones also found their way onto pinball tables. Even major companies like Coca-Cola, Pepsi, and IBM saw the marketing potential and created their own unique experiences.
Now, of course, right now you’re thinking, “Oh yes, it’s so interesting. Yeah, I’ve played pinball. Why do I care? It’s not like I can sell custom branded pinball machines to my clients.” Well, you’re a very argumentative, theoretical person that I just made up, but you would be missing the point and you would be wrong. For example, this digital pinball console can be found in the SAGE base, can be customized with pad printing, and can play over 2,500 different pinball games. Honestly, every time that I put together a presentation here at SAGE, I surprise myself with the variety of products offered by our suppliers.
Around the same time that pinball took the world by storm, board games experienced a significant boom. Classics like Monopoly and Scrabble emerged, offering accessible yet challenging experiences that brought families and friends together around the table. These games provided entertainment, fostered social interaction, and encouraged strategic thinking.
Just like pinball, board games eventually became prime targets for brand marketing. Monopoly’s first custom board was a San Diego-themed game. This paved the way for a vast array of licensed games, transforming Monopoly into an immersive journey into different worlds where people could imagine buying and trading iconic locations from Star Wars or Star Trek, exploring the worlds of Pokémon and Disney. Monopoly offers licensed additions and companying these and a wide variety of other themes, including national parks, popular cities like Las Vegas and New York, colleges and universities, sports leagues, NASCAR, even licensed additions from nonprofit organizations like the Boy Scouts of America and corporations like Best Buy, FedEx, and UPS. I was in Walmart yesterday, and I saw a Plano, Texas-themed game of Monopoly. It’s everywhere.
Just as pinball had arisen from the confluence of gaming and technology, soon true digital video games would follow suit. Believe it or not, Pong was not the first video game. To find the very first video game, we need to go all the way back to 1958. At this time, William Higinbotham, formerly the head of the electronics division on the Manhattan Project, worked for Brookhaven National Laboratory in Upton, New York. It was here where Higinbotham developed “Tennis for Two,” like Pong, which would come later. The game was played with two controllers, and two players would twist the knobs back and forth to hit the ball over a small point of light that represented the net. This was the first digital game made strictly for entertainment purposes. It was a hit at the laboratory’s annual public show, with Higinbotham stating that he couldn’t get high schoolers away from the thing. They were obsessed. Turns out teens will be teens and always have been teens.
While “Tennis for Two” would never see a commercial release, in the early 70s, Nolan Bushnell, co-founder of Atari, would task Alan Alcorn with a training exercise: create a virtual tennis game. It’s debated to this day if Alcorn was aware of the “Tennis for Two” game, though he stated in interviews that he wasn’t. It isn’t hard to imagine that different people had a similar idea around the same time, as it’s one of the simplest real-world game mechanics to recreate digitally.
The first Pong prototype, installed in a local bar, Andy Capp’s Tavern, quickly proved its magnetic pull. The game became a smash hit, with the bar’s coin box overflowing from constant play. This unexpected success convinced Atari to manufacture the game commercially, marking the birth of the modern video game industry.
Pong’s success wasn’t confined to the arcades. In 1975, Atari released a home console version of the game, marking another milestone. This allowed families to experience the thrill of Pong in their living rooms, further solidifying its cultural impact.
Pong’s immense popularity set off a gold rush for other companies to join in. Seeing dollar signs, manufacturers flooded the market with Pong clones. These games offered minimal variations on the original formula. They lacked innovation and originality. The market became saturated with repetitive experiences. Even Atari themselves would continue to turn out Pong clones, neglecting the growing hunger for fresh experiences among players.
The quality of these clones was often poor, plagued by glitches and uninspired design. This coupled with the lack of variety led to consumer fatigue. Players grew tired of the monotonous gameplay and sought out more engaging experiences. Consumer confidence plummeted, leading to the very first video game industry crash. Retailers were stuck with unsold inventory. Many companies specializing in Pong clones went bankrupt.
The 1977 crash served as a hard reminder for the nascent video game industry. It highlighted the importance of innovation, quality control, and diversifying game genres.
Before we see how video games recovered from this crash, let’s take a look at another side of the gaming industry: tabletop gaming. Tabletop gaming is a cousin to the video game industry, the analog side of the coin that evolved from the same ancient influences. Technically, games we’ve already discussed like chess are the oldest tabletop games, but I’m talking more about the kind of tabletop gaming that we saw in the 20th century.
The war games from the previous century were originally developed for real-world military training and strategizing, but they evolved into games like Risk and Dungeons & Dragons. D&D’s origins lie in the creative minds of Gary Gygax and Dave Arneson in the early 1970s. Inspired by miniature wargaming and infused with elements of fantasy literature like Tolkien’s The Lord of the Rings, they crafted a rule system that allowed players to create and embark on adventures in a world brimming with magic and monsters.
The first edition of D&D was published in 1974 and quickly gained a cult following. It introduced several revolutionary concepts that continue to define RPGs to this day, such as collaborative storytelling. The game isn’t just about a competition; it’s about a shared narrative experience guided by a dungeon master who acts as the narrator and rulekeeper. Player creation is hugely important. Players craft their own characters on paper, choosing their race, class, abilities, and backstory. This investment in their character creates a deeper sense of immersion into the world that they’re playing in.
Dice mechanics are also a crucial part of D&D. The game utilizes polyhedral dice (D4, D6, D8, etc.) to resolve actions and introduce an element of chance to the gameplay. The game has undergone several additions and changes throughout the years, each refining the rules and introducing new elements.
While Dungeons & Dragons ushered in the modern era of RPGs by focusing on collaborative storytelling and character creation, Warhammer 40K carved a unique niche within the tabletop wargaming scene. Unlike the high fantasy setting of Dungeons & Dragons, Warhammer plunges players into a dystopian future. While D&D emphasized storytelling and character development, Warhammer 40K leans heavily into strategic and tactical decision-making. Players build armies from a vast selection of meticulously detailed miniatures representing the various factions vying for dominance.
Warhammer 40K boasts a rich and ever-developing lore behind the game. Games Workshop, the creator, continually expands the universe through novels, video games, and art books. For many Warhammer 40K enthusiasts, playing the game itself is just one aspect of a much broader hobby. Players take immense pride in assembling, painting, and customizing their miniature armies.
The realm of tabletop gaming also wouldn’t be complete without mentioning Magic: The Gathering, offering a unique blend of strategy, resource management, and deck-building expertise. Players take on the role of powerful wizards who duel with each other using strategically constructed decks of cards. These cards represent spells, creatures, artifacts, and lands. The resource system that fuels the casting of spells adds a significant layer of strategy as players must carefully select cards that work well together and cater to a chosen playstyle: will you unleash a swarm of aggressive creatures, or control the battlefield with powerful spells, or weave intricate combos to outmaneuver your opponents?
With the continued success of these established giants like D&D, Warhammer, and Magic, alongside the emergence of innovative new titles, the future of tabletop gaming seems bright. Promotional products have always played a significant role in the marketing and promotion of these games throughout their history. In recent history, Forbes estimated that in 2022, Dungeons & Dragons was responsible for between $100 million and $150 million in annual revenue, including the sale of t-shirts, apparel, rulebooks, art books, custom dice, playmats, miniatures, and more.
The period following the crash of 1977 laid the groundwork for the industry’s eventual resurgence. With companies like Nintendo prioritizing quality and creative game design, the seeds of innovation sown during this response blossomed the following decade, leading to the Golden Age of arcades in the 1980s.
Games like Space Invaders showcased the potential for more engaging and visually captivating experiences. This shift in focus and strict quality control helped rebuild the consumer confidence that had been lost the decade prior. The early ’80s also saw significant advancements in hardware capabilities. Improving processing power allowed for more complex graphics and smoother gameplay, and the introduction of new features (that seem simple now, like side-scrolling and multi-directional movement) but in fact required much more intensive hardware to make happen. This led to the creation of side-scrolling platformers, beat-em-ups, racing games, and fighting games.
Games like Pac-Man, Donkey Kong, and Mario Bros introduced innovative gameplay mechanics, captivating storylines, and unforgettable characters. Games began to cater to a broader audience, not just enthusiasts. Titles like Ms. Pac-Man were specifically developed to appeal to female players, broadening the demographic. The innovative games, vibrant visuals, and engaging sound design fostered a vibrant arcade culture. Arcades became social hubs, attracting players of all ages who loved to gather to compete, collaborate, and just to share their love for the hobby.
The Golden Age was a period of explosive branding, with the birth of iconic mascots and the rise of memorable merchandise. Pac-Man and Donkey Kong, their cabinets adorned with vibrant artwork, instantly recognizable characters, and bold colors, these visuals became synonymous with the game itself, creating a strong brand identity that drew players in from across the room.
The craze wasn’t confined to the arcade. Promotional companies jumped on the Pac-Man bandwagon, creating a wave of merchandise. We’re talking about t-shirts, lunchboxes, jewelry. Some items, like a $20,000 Ms. Pac-Man choker, showed just how popular Pac-Man was. And it wasn’t just clothes and accessories; he had his own breakfast cereals, popsicles, and even Pac-Man pasta. Even today, Pac-Man remains a beloved icon. We see him in movies like Wreck-It Ralph, we’ve heard him in hit songs like “Pac-Man Fever,” and you can still find him at Walmart on phone cases and designer clothing.
Building on a history of product placement in games like pinball, the arcade boom also saw a surge in promotional tie-ins. Jaws, Star Wars, Star Trek, Tron, Alien, James Bond, Indiana Jones, Ghostbusters, and more all received officially licensed arcade game adaptations. This era also saw the rise of in-game advertising. Product placement was already very commonplace in the film industry at the time (just think about the movie Back to the Future and how many brands were in that film). In 1984, Midway released a game called Tapper sponsored by Anheuser-Busch, where players controlled the bartender struggling to keep up with an unending legion of Budweiser-demanding barflies. Coca-Cola worked with Atari to create a special version of Space Invaders to be played at the Coke sales convention, where players shot down a group of aliens spelling out “Pepsi.”
The Golden Age of gaming in the early 1980s might have seemed invincible, but beneath this vibrant lights and phonetic energy lurked a hidden danger. By 1983, the video game industry was heading for its second crash, and for some similar reasons.
Let’s take a look at why that bubble burst.
Just like the crash of 1977, the market eventually became flooded with low-quality games. Many companies, eager to capitalize on the arcade boom, rushed out hastily developed titles that lacked originality and innovation. This glut of mediocre games led, again, to consumer dissatisfaction and declining sales.
The success of the Atari 2600 sparked a similar problem in the console market. Numerous manufacturers tried to enter the space, releasing consoles with limited capabilities, underwhelming libraries, and poor marketing. The oversaturated market confused consumers and ultimately led to declining console sales. The intense competition between console manufacturers also led to price wars. And while that might seem beneficial to consumers, it ultimately hurt the companies’ profits. With these lower prices and a lack of innovation, manufacturers struggled to maintain their margins, leading to financial instability.
The video game crash of 1983 was a harsh lesson for the industry. Many companies went bankrupt, and the North American video game market virtually collapsed. It would take a few years for the industry to recover, with companies like Nintendo once again coming in to lead the charge by prioritizing quality control, innovation, and a focus on creating a strong brand identity.
And just like in the 70s, the crash of ’83 was not the end of the video game industry. It was a turning point. There were lessons to be learned, and those lessons paved the way for a more sustainable and strategic approach to video game development and marketing.
When the video game industry rose again, it was with the rise of the console. The frenetic energy and social atmosphere of the arcades in the 80s were undeniable, but a revolution was brewing in living rooms around the world. The seeds of console gaming, planted earlier with the Atari 2600, began to blossom, offering a more accessible and intermittent alternative to arcades and proving that the appetite for video games extended beyond the arcade environment.
Companies like Nintendo entered the fray with the Nintendo Entertainment System in 1985. This console, with its iconic controller, brought beloved arcade titles like Super Mario Bros and Donkey Kong into players’ homes. The NES’s success ignited a console war, with Sega entering the ring with the Master System and later the iconic Genesis. This competition fueled innovation, pushing both companies to develop more powerful consoles and more groundbreaking games. Titles like Sonic the Hedgehog on the Genesis became cultural touchstones, offering a compelling counterpoint to Nintendo’s mascot, Mario.
And it wasn’t just about bringing the arcade experience home. Developers harnessed the unique capabilities and power of consoles to create deeper and more immersive experiences. Games like The Legend of Zelda in 1986 introduced expansive open worlds with exploration elements. Final Fantasy in 1987 pioneered the Japanese role-playing game genre, offering rich narratives and very complex gameplay mechanics.
By the late ’80s and early ’90s, console gaming had established itself as a dominant force in the entertainment industry. It offered a broader range of experiences than arcades and catered to a wider audience. The rise of console gaming not only brought iconic titles and beloved characters into our homes but also laid the groundwork for the future of the industry.
The 1990s witnessed a legendary clash of titans—the console wars. It wasn’t just a battle of hardware; it was a marketing war fought with eye-catching commercials, slogans, and mascots.
Let’s dive into the key players in this battle. Nintendo, already the established leader with the Nintendo Entertainment System and the Super Nintendo, focused on family-friendly experiences. Their commercials showcased kids and families enjoying games together, promoting a sense of wholesome fun. Nintendo leveraged the immense popularity of Mario, their undisputed mascot, across all of their marketing efforts. Mario became a household name, instantly recognizable and synonymous with quality gaming experiences, just like Mickey Mouse was with animation. Nintendo slogans like “Power up your imagination” and “You’ve got a friend in Mario” resonated with young children and their parents, solidifying their reputation as the safe and fun choice for families.
Sega, actively positioning itself against Nintendo as the edgier alternative, their commercials often featured a more mature tone appealing to teenagers and young adults seeking a challenge. Sega’s mascot, Sonic, was a contrast to Mario. Sonic was cool, fast, and rebellious. He embodied the challenger spirit and resonated with players seeking a different kind of gaming experience. Sega’s bold slogan, “Sega does what Nintendon’t,” directly challenged Nintendo’s dominance, portraying themselves as the more daring and innovative company. This aggressive approach grabbed attention and sparked conversation among gamers.
Sony, a newcomer to the console scene with the PlayStation, positioned itself as the technologically superior option. Their commercials emphasized the PlayStation’s advanced 3D graphics and processing power, appealing to gamers seeking cutting-edge technology.
These contrasting marketing strategies had a profound impact on the console war. With Nintendo fighting for the family-friendly market, Sega trying to be their antithesis, and Sony with its focus on technology and mature titles, there was discussion, competition, and renewed consumer interest in the video game market that continued to explode to the modern day.
The console wars in the ’90s weren’t just about processing power and slogans. They laid the groundwork for what would come next: online gaming. Gaming started as a social activity in arcades, then became a more solitary experience for one or two players at home. Now, it was ready to become a globally connected experience.
The seeds of online gaming were sewn in the early days of personal computers. Games like Ultima Online and EverQuest in the late ’90s offered players the ability to connect to virtual worlds and interact with others online. These massive multiplayer online role-playing games laid the foundation for the online gaming phenomenon. While PCs were the initial pioneers, consoles eventually joined the party. The true turning point arrived with the Sony PlayStation 2, launched in 2000. PS2 wasn’t just powerful; it was internet-ready. This, coupled with the rise of broadband internet, provided a smoother and more robust online experience.
And it wasn’t just about MMOs. First-person shooters like Halo on the Xbox and online strategy games like StarCraft broadened the online gaming landscape. Furthermore, the development of online gaming services like Xbox Live and PlayStation Network fueled the fire by offering dedicated servers, streamlined matchmaking, and a sense of community.
Online gaming wasn’t just about playing the games; it fostered the rise of esports, with competitive gaming becoming a spectator sport. Online communities bloomed, allowing players to connect and share these experiences across the globe. New revenue models emerged, like microtransactions, transforming the ways that games were monetized.
Let’s talk about the gaming landscape today and what it means for us today. The landscape is a vibrant ecosystem teeming with passionate players and a wealth of marketing opportunities. We’ll delve into these top three trends here:
Competitive Gaming (or Esports): Esports is no longer niche. Professional gamers are celebrities with tournaments attracting millions of viewers online and in sold-out arenas. For marketers, this presents a golden opportunity. Sponsorships with teams and players offer brands valuable exposure to a highly engaged audience.
Live Streaming Platforms: Platforms like Twitch and YouTube Gaming have created a new generation of gaming celebrities, streamers. The new tools and monetization options with these platforms allowed many individuals to make a full-time career streaming themselves playing video games. Their charismatic personalities build massive communities around their gameplay, offering a unique blend of entertainment and community. Streamers can present very unique partnership opportunities for distributors as well. Streamer followings are incredibly loyal, creating a built-in customer base for branded merchandise. The variety of streamer content, from casual playthroughs to competitive esports, allows you to target specific demographics when building these partnerships. Promotional products can be a fun way for streamers to connect with their audience and generate additional income.
Mobile Gaming: The mobile gaming market is another juggernaut. Smartphones offer a constantly connected way and strong processing power that can rival some platforms, making them a go-to gaming system for all ages. The mobile boom presents marketers with a unique opportunity for micro-targeted advertising and in-app purchases.
These trends are all interconnected. Esports viewership fuels streaming popularity, and mobile games can act as gateways to more hardcore gaming on consoles or PCs. Marketers who understand these connections can develop holistic strategies that reach gamers across different platforms and touchpoints.
The key takeaway: The gaming landscape today is not just about selling games anymore. It’s about building communities and fostering engagement to create long-lasting connections with a passionate and influential demographic.
I want you to take away this point: The video game industry itself has succeeded when it was fueled by innovation and crashed when innovation stagnates. When the video game industry does succeed, it does so on a huge scale, creating very profitable opportunities for those in the industry and in the marketing industry surrounding it. Likewise, those marketing attempts do best when they are innovative and creative. Gamers are a passionate and engaged audience, making them prime targets for well-designed branded merchandise.
Here are just a couple of ideas on how you could tap into this market:
The biggest thing is going to be understanding the gamer from a demographics perspective. Gamers are a very diverse bunch, but the core audience skews young, tech-savvy, and brand-conscious.
Form partnerships with esports teams and streamers. Their culture is huge and only growing. These kinds of partnerships with popular teams and streamers allow you to leverage their influence to reach a targeted audience. Offer co-branded products, sell things in an online store, or sponsor giveaways.
Remember that quality matters in this industry. Cheaply made items will leave a bad impression. Use high-quality materials that can withstand the wear and tear of gamers’ everyday use.
Relevance is key. Don’t just slap some random gaming logo on the product. The chosen item and its design should resonate with the specific market that you’re targeting within that community.
By understanding the gaming audience and offering these high-quality products, you can help businesses in the gaming industry connect with their target audience on a deeper level, build lasting brand loyalty, benefiting not only them but you, the promotional products distributors who are looking to grow your business.