Gamergate: What a business executive needs to know

October 22, 2014, 8:01 PM UTC
Promotional art for Assassin's Creed Unity.
Promotional art for Assassin's Creed Unity.
Courtesy: Ubisoft

A hashtag-led movement called Gamergate (or, more appropriately, #gamergate) landed on the front page of The New York Times last week, prompting readers who don’t play video games to ask: “What is it?”

And more importantly: “Why should I care?”

There is plenty good reason to. The video game industry—where U.S. consumers spent $21 billion in 2013, according to the NPD Group—has been caught off guard by a social media crusade that pits one half of its customers against the other with the press caught in the middle. How it plays out could leave a lasting impact on an industry that, according to Gartner, is worth more than $100 billion worldwide and still growing.

What is Gamergate?

What came to be known as Gamergate began as an online debate about whether popular video game websites published news and opinion that were overly sympathetic to feminist views. To one side, the sites are too politically correct and in some cases corrupt; to the other side, the culture of the gaming industry is overly dominated by men, even though it’s made up of roughly the same number of women.

Exacerbated by a Twitter hashtag and the safety of anonymity on the Internet, the movement escalated into a groundswell of hard-core gamers threatening and intimidating female video game developers and writers over fear that the increasing number of female players will change what it means to be a “gamer.”

How did it start?

In September, The New Yorker published an article about 27-year-old Zoe Quinn, who had created the video game Depression Quest, a free interactive fiction game that was released in 2013 and has since been played more than one million times. The game’s protagonist suffers from depression, and the player experiences, at least virtually, what it feels like to get through the day with the mood disorder.

The storyline didn’t gel with traditional themes of top video games—fighting, shooting, et cetera—and almost immediately Quinn began receiving hate mail from nameless online attackers. They believed that the topic of her game was too progressive and lacking the escapism of traditional titles. And because she was a woman, she didn’t have any business building it to begin with.

The harassment spiked in August when Quinn’s ex-boyfriend blogged that Quinn had cheated on him with a journalist who covered the industry for Kotaku, a gaming website. He insinuated that the relationship was made in order to get good press for Depression Quest. “The journalist in question pointed out that he had not reviewed the game and had merely reported its existence,” wrote The New Yorker’s Simon Parkin. “Still, some justified their attacks on the ‘manipulative’ Quinn in the name of ethics.”

And as for the hashtag? That came courtesy of actor Adam Baldwin, who used it in an early tweet about the increasing kerfuffle.

What is the business impact?

So-called Gamergaters didn’t just go after individuals. In an effort to present themselves as a unified force not to be reckoned with, the group flooded the inboxes of large companies—including Amazon (AMZN), Best Buy (BBY), and GameStop (GME)—that advertised on Kotaku. Their message? Hard-core gamers, which spent a good chunk of the $21 billion in sales last year, would stop buying from these companies if the companies didn’t pull their ads from the site.

Wary of controversy, Intel (INTC) pulled its ads from another game developer site,, after the publication received criticism for publishing an August 2014 column critical of gamer culture. The company soon realized that its action led it to take sides in the debate, and it swiftly issued an apologetic statement emphasizing gender equality. Other companies in or close to the industry, from Electronic Arts (EA) to Activision Blizzard (ATVI), remain mum on the issue.

Their silence is deafening. Some of technology’s largest companies—including Sony, Microsoft, Apple, Google, and Facebook—enjoy significant market share in the gaming industry. None of them want to associate with misogyny, but poor handling of the controversy could lead both sides to disavow the greater gaming community.

To date, there seems to be little impact on gaming companies from the controversy. The stock of Electronic Arts, for example, still trades in the $35 range. Take-Two Interactive (TTWO) remains around $22. The share price for both companies remains largely the same as in August, during a time when the Dow Jones Industrial Average has been mostly flat.

Meanwhile, video game sales rose for the eighth consecutive month in September, according to the most recent estimates from the NPD Group. Monthly sales of gaming hardware, software, and accessories at retail stores reached $1.1 billion. If gamers of any kind are withholding purchases, there do not yet seem do be enough to sway sales during the all-important fourth quarter.

Is the gaming industry really ignoring female customers?

No, but it’s not yet fully embracing them, either.

In 2014, 48% of all gamers were women and 52% were men, according to the Entertainment Software Association. More importantly, women age 18 or older now represent a significantly greater portion of the game-playing population (36%) than boys age 18 or younger (17%). Video game developers recognize that women are a growth opportunity. They also recognize that they can’t turn their back on the passionate male-dominated community that gaming has traditionally fostered.

Major game titles today seem to reflect the dissonance. Take-Two Interactive Software, a $1.75 billion business, produces the best-selling Grand Theft Auto franchise through its Rockstar Games subsidiary. The fifth installment in the series generated more than $1 billion in sales in its first three days on sale last September. The latest game, like previous installments, has no female protagonists, and the women depicted in it are primarily strippers and prostitutes.

Similarly, Electronic Arts, an $11 billion company, is responsible for the second- and third-bestselling video games of 2013, Call of Duty Ghosts and Madden NFL 25. The former is a military-themed first-person shooter; the latter is the latest edition of the popular professional football franchise. Both are, admittedly, guy-centric.

On the other hand, women have embraced titles like King Digital’s Candy Crush Saga and Supercell’s Hay Day, and game developers are increasingly adding female characters—some playable—to their titles. The demand is clear: When Ubisoft (UBI) failed to include a female protagonist in the latest installment of its Assassin’s Creed series, an a historical action game that is popular with both genders, there was an uproar.

EEDAR, a research firm for the video game industry, recently analyzed 1,215 action, shooter, and RPG (“role-playing game”) titles to determine the split in gender for playable characters. It’s still heavily weighted toward men.

“From 2009 to today, roughly 43% of titles allowed for the avatar choice to be either male or female,” analyst Edward Zhao says. “More than half, at 53%, only allowed for a male playable character while 4% had only female playable characters.”

The split is reflected in dollars. “In terms of revenue, female-only games generated a third of the sales,” Zhao says, “but they also received only a third of the marketing budget.”