What sort of business type is a video game company? Manufacturing?


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I am a college student and I am supposed to be creating a business plan for a school project. I decided to create a faux video game company in order to satisfy the criteria of the project, but I've run into a snag: what catagory of business does a company that creates video games fall under? Manufacturing was my guess, but I want something more concrete than a guess.

Getting Started Gaming Business Model Company Business Plan

asked Jun 8 '12 at 08:22
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Nicholas Coovert
3 points

3 Answers


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Of the four you mentioned - manufacturing, retail, wholesale, or service - the software development side of video game production is a service because the ultimate goods being produced and consumed are virtual. More specifically, such a business is providing an entertainment service.

Ubisoft, for example, has NAICS code 541511, which stands for Custom Computer Programming Services. Activision and Electronic Arts both use NAICS code 511210, which stands for Software Publishers.

Why it's not manufacturing or retail/wholesale: The absence of tangible goods. There may be manufacturing/retail/wholesale components to a video game business, but these roles are typically contracted out to a different company. Manufacturing would involve the production of the discs or cartridges the games are sold on. If it were retail or wholesale, then the business would be responsible for selling the games in a store either directly to consumers or to another reseller.

answered Jun 8 '12 at 10:54
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Henry The Hengineer
4,316 points
  • I disagree. Software development is not always a service. If a company is selling a good they are not a service based company. A service based company is selling a skill. A company that develops software with the goal of selling that software is a product based company, not a service based company. The fact that software may be intangible doesn't matter in this case. Note that video games are usually tangible products. A freelancer that develops software for someone else is service based. – Zuly Gonzalez 7 years ago
  • Thanks a lot for the help – Nicholas Coovert 7 years ago
  • I agree that software can be considered something other than a service, but within the constraints he provided - manufacturing, retail, wholesale, or service - service is the closest approximation. – Henry The Hengineer 7 years ago

2

I would use one of the business categories established by NAICS (North American Industry Classification System). This is what the IRS uses to categorize businesses.

Here is a complete list of all the categories.

I would go with Software Publishers (code 511210) under the Information industry.

answered Jun 8 '12 at 10:46
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Zuly Gonzalez
9,194 points
  • I would love to if I could. Thanks anyway. – Nicholas Coovert 7 years ago

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Video games are software development... Entertainment software development for a more specific area I suppose but in general it is just software development.

answered Jun 8 '12 at 08:29
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James
101 points
  • I meant what is the type of business? Is it manufacturing, retail, wholesale, or service? – Nicholas Coovert 7 years ago
  • It's a service. – Henry The Hengineer 7 years ago

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