The video game industry, worth more than $200 billion globally, is facing a possible shift away from physical discs and toward subscription-based services, according to technology consultant Mario Yáñez. Yáñez discussed the industry's history and future on the Spanish radio program La Linterna on Cadena COPE, in a segment called Clases de Economía hosted by Rubén Corral, broadcast on August 4, 2026.
From University Labs to Living Rooms
According to Yáñez, video games trace back to university laboratories in the late 1950s. One of the earliest milestones was Tennis for Two, created in 1958, which used an oscilloscope to simulate a tennis match. The commercial breakthrough came in the 1970s. Yáñez said that in 1972, Magnavox launched the Odyssey, considered the first home console, while Atari released Pong. These simple games showed that the public was willing to pay for interactive entertainment at home.
The Atari 2600, launched in the late 1970s, drove the industry forward with interchangeable cartridges, selling more than 20 million units and building a catalog of more than 900 titles. That era saw the founding of publisher Activision by former Atari employees, along with the release of classics such as Taito's Space Invaders in 1978, Namco's Pac-Man in 1980 and Nintendo's Donkey Kong in 1981, which introduced characters that would later star in the Mario Bros series.
The 1983 Crash and Nintendo's Comeback
Early success led to a saturation of the U.S. market with too many consoles and games, many of them low quality, Yáñez said. Stores were left with unsold inventory, pushing many companies into bankruptcy in what became known as the 1983 crash. Yáñez said the failure of Atari's E.T. the Extra-Terrestrial game was the first clear sign that something was wrong, though he said the real problem was a broader lack of quality across the industry. He noted that some titles from that period still compete for the title of worst video game in history.
Nintendo rebuilt the industry with the release of the NES in 1985, according to Yáñez. The company imposed much stricter quality controls and turned franchises such as Super Mario, Zelda and Metroid into core assets. The arrival of Tetris alongside the Game Boy handheld was also key to reviving a sector Yáñez described as having been half sunk.
The Digital Era: Sony, Microsoft and Mobile
The 1990s were defined by the commercial battle between Nintendo and SEGA. SEGA released the Mega Drive as a faster, more youth-oriented alternative built around its mascot Sonic the Hedgehog, while Nintendo answered with the Super Nintendo and its own franchises. Yáñez said that rivalry cemented exclusive games and brand mascots as emblems of the companies.
Sony transformed the market again with the PlayStation in 1994. Its main advance was the use of CD-ROM discs, which offered more storage and cost less to manufacture than cartridges. With franchises such as Final Fantasy, Resident Evil and Gran Turismo aimed at an older audience, the PlayStation went on to sell more than 100 million units. The rising price of consoles remains a debate that continues today, Yáñez noted.
Sony's success continued into the new century with the PlayStation 2, launched in 2000, which added DVD playback. With 160 million consoles sold, it became the best-selling console in history. Seeing the opportunity, Microsoft entered the market in 2001 with the Xbox and its flagship title Halo. Its major contribution was Xbox Live, a platform that normalized online play with friends over the internet.
A new shift arrived with the launch of the iPhone in 2007, according to Yáñez. The smartphone removed the need for a dedicated console for millions of people. Games such as Angry Birds and Candy Crush became massively popular, turning mobile into the sector's largest economic segment. Titles such as Pokémon Go, released in 2016, added geolocation and augmented reality, turning the real world into a game space.
Today's $200 Billion Industry
The video game industry now generates more than $200 billion a year, with a player base of 6.3 billion people in 2026, or nearly one in every two people on the planet, according to Yáñez. Mobile accounts for more than half of that revenue, at $113 billion, followed by consoles at $44 billion and computers at $43 billion. The Asia-Pacific region accounts for almost 50% of the market.
Fear of Losing Ownership
Given that landscape, Yáñez said the big question is whether physical games will disappear altogether. He said it is a risk that genuinely exists, driven by manufacturers' desire to cut costs and by trends set by the mobile market. Recent reports that PlayStation consoles could stop supporting physical format games have fed that concern, he said.
Yáñez warned that the biggest threat of a subscription-only model is the loss of ownership. He said that when he buys a game, he keeps it forever, a value that subscriptions take away.
Yáñez also warned that even a cheap-looking subscription can end up costing far more over time. He said that no matter how low the subscription price seems, a frequent player could end up paying 50 times the price of a single game. Corral added that there is also the danger of a company deciding to delist a game entirely, leaving players unable to play it anymore.
