Sales tripled over the decade to $21 billion

As the decade began, the videogame industry had an image problem. Players were widely viewed as socially awkward nerds — and games themselves were rarely taken seriously.vidgames

Things are different these days. People who wouldn’t have given videogames a second glance five years ago now have a system in their living room. And the revenues generated by major vidgame titles regularly leave the box office of Hollywood blockbusters eating their dust.

After years of looking up to other entertainment industry players, videogames finally grew up. Here are a few of the keystone moments:

Nintendo changes the game: Nintendo struggled through much of the decade and many people thought it would exit the hardware business. Boy, were they wrong.

Smartly focusing on how games are played rather than how they look, the Nintendo Wii opened up gaming to people who had long written it off. Today, Microsoft and Sony are prepping motion-controlled devices of their own — and nobody doubts Nintendo anymore.

Microsoft’s Trojan horse: The Xbox 360, released in 2005, kept people focused on the games — but as people played, the system was becoming as much a part of their home entertainment system as it was a gaming device.

Today, the 360 streams Netflix movies and Last.fm. Users can rent or purchase movies or TV programs on demand. And social media addicts can scan and update their Facebook or Twitter accounts without booting up their PC.

The rise of DLC: Retailers never imagined they’d have to worry about gaming systems as shopping competition. That changed in 2002 when Microsoft launched Xbox Live, letting players directly download additional gaming content.

Today, all three console-makers have stores integrated into their systems. In pure numbers, it’s still small potatoes but it’s growing fast and it’s making retailers nervous.

When developer Rockstar Games rolled out “Grand Theft Auto III” in 2001, it was something no one had seen before. Players had unprecedented in-game freedom, but that was overshadowed by the violent and sexual content.

The furor hit its peak in mid-2005, when a racy sex minigame was discovered in “Grand Theft Auto: San Andreas.” It was a public-relations black eye but certainly didn’t hurt the franchise’s sales. 2008’s “Grand Theft Auto IV” sold 6 million copies worldwide in its first week, grossing $500 million.

Gaming on the go: The Game Boy was well established at the start of the decade, but quickly became a memory when the Nintendo DS was introduced in 2004. Sony, meanwhile, tried to beat Nintendo at its own game, introducing the PSP in 2004, which has sold well but has never come close to the numbers Nintendo pulled with any of its portable systems.

The unlikely entrant in the portable gaming space is Apple, whose App Store has thousands of inexpensive games — and a growth arc that has some publishers worried.

A sales explosion: Videogame sales in 1999 hit a record $6.9 billion – then fell 6% at the start of this decade. Last year, the industry took in more than $21 billion — a better than threefold increase. And 2010 is shaping up to be another gangbuster year.

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