Economics of the video game industry: Why an under-researched industry merits the attention of economists?

We economists at Toulouse School of Economics have an intense romance with industrial organization. Few visiting scholars fail to mention the strong work being done here in this field. The study of industrial organization is always grounded in a deep and subtle understanding of the industry at hand, as Justin Wolfers wrote for the New York Times in an article about the work of Professor Tirole [1]. It is all the more surprising that there is no research nor teaching about one of the most interesting, dynamic, and complex sectors of the modern entertainment industry: The video game industry. In this article, I will write both about the research that has been done on this industry as well as the developments and phenomena that should put video games high up on the list of research priorities for every serious researcher in industrial organization.