September 20, 2026

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Illustration of a kid sitting on a big comfy red chair with a video game controller in their hands. Behind them is a cast of characters drawn from standard video game genres: spaceships zooming past a large blue knight holding a broadsword and shield, a baseball player, a muscle-y gruff dude holding a futuristic-looking gun, a pink-haired elven princess, and a kid catching a butterfly in a net.

Drew Shannon

Editor’s note

Press Start. Dust off your controllers and let the infinite money glitches flow. In today’s edition, we’re speedrunning one of the world’s largest entertainment sectors: gaming. Our campaign covers the industry’s digital overhaul, Hollywood’s pursuit of the IP loot, and, of course, a few side quests. Continue?

CAN’T TOUCH THIS

Gaming is dead. Long live gaming.

Gaming controllers, CDs, and cords on a purple surface

Unsplash

We’ve come a long way from the era when joysticks and single-player campaigns were seen as nothing more than fodder for basement-dwelling nerds. Nowadays, more than 3.5 billion people play some sort of video game, and the global industry is larger than music and movies combined.

But there’s a catch: It seems that the bigger gaming gets, the less you own of the games you play.

Goodbye, physical discs

The days of holding a game in your hands are probably numbered. Cue “Slipping Through My Fingers” by ABBA:

Sony will sell new PlayStation games as digital downloads only starting in 2028, the company announced earlier this year, partly because that’s how most people buy games now anyway, and partly because premium games are increasingly too large to cram onto a single CD.
The biggest release of the decade, the forthcoming Grand Theft Auto VI, will also be digital-only.

This practice angers gamers and consumer advocates because you can’t actually own a digital game—you’re buying a (revocable) license to play it. Sony is now facing a proposed class-action lawsuit that claims the company doesn’t make that distinction clear enough.

Meanwhile, a cloud gaming surge is coming…

…the CEO of Grand Theft Auto parent publisher, Take-Two Interactive, recently predicted. Cloud gaming lets you stream video games from practically any device.

That’s helpful as the AI boom jacks up console prices via ballooning hardware and memory demands, but it also turns gaming into a subscription service that’s beholden to price increases or, say, Microsoft’s recent decision to impose monthly streaming limits for Xbox Game Pass. “We’re introducing this model because the cost of providing cloud gaming grows as more people use it and play for longer,” Xbox said.

Looking ahead…gaming companies might turn to in-game advertising to offset rising cloud costs and give players a way around usage caps. Xbox already started testing ad-supported game streaming in July.—ML

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screenwatching

Hollywood thinks this is all a game

Luigi and Mario holding flames in The Super Mario Galaxy Movie

Universal Pictures

If at first you don’t succeed, take out the game, blow into the cartridge, and try again. That’s what Hollywood did after its mostly forgettable attempts at adapting video games for the big screen in the 1990s. Now, video game adaptations are big business, and the entertainment and gaming industries are fully in co-op mode.

Collecting coins: In its never-ending quest for strong intellectual property, Hollywood has found that nostalgia for familiar video game characters can sell a lot of tickets, bringing in both gamers and people who wouldn’t know the difference between Pac-Man and Ms. Pac-Man (it’s the bow). Per Box Office Mojo:

The fifth-highest-grossing film of the year so far is The Super Mario Galaxy Movie, which raked in more than $1 billion worldwide.
Last year, A Minecraft Movie also landed in the No. 5 spot, grossing $960 million worldwide.
The Sonic the Hedgehog franchise has also made more than $1 billion at the global box office since 2020.

The commercial and critical success of Fallout and The Last of Us has shown that video games can translate to TV as well.

Side quests: Strong intellectual property can swing both ways. In June, Paramount unveiled its own gaming studio to turn its TV and film IP into video games. Warner Bros. Discovery, which Paramount is trying to acquire, also has its own in-house game studio.

Different levels: The entertainment industry is working other angles, too—movies are being promoted inside video games; Amazon and Netflix have added games to their platforms; and when the latest GTA VI trailer debuted on Netflix, it attracted more viewers that week than any of the streamer’s titles.—BC

WAIT, WHAT?

People are using AI apps to vibe code video games

Blue and red keys on a computer keyboard on an orange surface

Unsplash

Not satisfied with what video game creators are providing? Thanks to generative AI apps, you’re only a few prompts away from vibe coding your very own game.

While you can’t make an effortless version of Animal Crossing or Red Dead Redemption, apps like Meta’s Pocket let people create smaller interactive games that are published to a scrollable feed. There’s also Roblox’s AI app, Build, which gives users the power to build (get it?) basic games on their phones.

A gateway to more vibe coding? There’s a steep learning curve to vibe coding new software, but “a small, browser-based game is a great way to get a taste of vibe coding,” according to Inc. reporter Ben Sherry. After an hour spent prompting Claude, this is what he created.

There are some constraints. One person attempted to vibe code his own version of GTA to beat the new installment to market in November, but ran into enough technical and legal problems that he has since bought a PS5 so he can play the real game when it’s released.—DL

Gaming the system

It wasn’t until after its 1962 IPO that Nintendo began its foray into gaming devices (after a brief stint in instant rice and the taxi business). It moved from electronic toys that included a light beam gun and a device for young people to test how much they love each other, to coin-operated machines. But what made it a global household name was the 1981 release of the arcade classic Donkey Kong, which introduced the world to Mario.

Throughout the 1980s, the company prioritized iconic IP, quirky design, and competitive pricing to make its home gaming gadgets into playdate staples:

It sold millions of handheld devices and consoles—like Nintendo Entertainment Systems and the long-battery-life Game Boy—that were simple and cheap to produce.
These gizmos attracted devotees by serving as portals to beloved titles like The Legend of Zelda and Super Smash Bros., with game sales accounting for much of Nintendo’s profit.

The company’s IP-focused strategy and maverick console design powered its continued success after the turn of the century. The DS popularized touch-screen gaming, while the Wii’s motion-activated joystick meant that Mario Kart involved actual steering. The Switch, released in 2017, offered improved graphics and more functional handling, helping it compete with Xbox and PlayStation.

Today…Nintendo trails Sony’s PlayStation in the console market but commands a majority in physical game sales.—SK

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Expert advice on lowering your dementia risk.
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*Based on preclinical studies. This product is not intended for weight loss.

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Written by Molly Liebergall, Brendan Cosgrove, Dave Lozo, Matty Merritt, Sam Klebanov, and Abigail Rubenstein

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