The Circular Economy of Video Games

Posted on August 12, 2021

We’ve talked about the circular economy on a few of our blogs now. It’s a way of reimagining the take-make-waste model into something much more sustainable. We’re seeing this happening across all industries. The video game industry is no exception.

How do video games fit into the circular economy?

First of all, let’s talk about the video game industry. It’s massive. Did you know 70% of all U.S. households have a gaming device? It’s no surprise that between 2015 and 2020, the industry has grown 14.7% and is expected to grow at an annualized rate of 7.1% over the next few years.

While gaming is increasingly becoming more digital, brick and mortar retailers like GameStop still include pre-owned game trade-ins as part of its core business model. It was such an integral part of their business that Paul Raines, GameStop CEO, spent $7 million on a massive 182,000 square foot facility in 2012 with the goal of refurbishing or recycling traded-in games.

And they take this seriously. According to Raines, “We’re a company that has a real strong skill set around buy / sell / trade, and in fact, we’re the largest refurbisher and recycler of electronics in the world.” This simultaneously helps turn GameStop a profit by finding value in pre-owned hardware, but helps the company become part of the circular economy by reusing existing materials into new products.

Starting a sustainability movement

This sustainable progress is not just coming from game retailers. In 2019, 14 video game CEOs from some of the biggest video game companies in the world formed an alliance at the UN Headquarters in New York City. Of course, many of these CEOs were in direct competition with each other, namely, Sony and Microsoft, among others. But the alliance had a more important goal than business rivalry: to work together to promote sustainability.

The alliance agreed on a set of commitments:

  • Curbing CO2 emissions
  • Planting trees
  • Finding ways to advance energy conservation
  • Making the acts of buying and playing games generally more sustainable

Since then, others have joined the alliance, known as the Playing for the Planet Alliance. Each of the companies and their commitments are prominently featured on the Alliance’s website. Sony, for example, which is known for its PlayStation brand and family of products, has committed to the following:

  • Energy efficiency and carbon emission reduction metrics to be met by 2030
  • A completed carbon footprint assessment to communicate energy efficiency measures taken at their data centers
  • Energy efficiency surrounding console set up and usage
  • Preparing a resource pack for game developers to understand climate change issues
  • Investigating the use of VR to raise awareness of climate change

Gamifying sustainability

These companies realized that video games are in a unique position to gamify sustainability. In other words, providing in-game rewards for environmental awareness and action. And we’ve already seen some big games taking advantage of this sustainable movement.

Niantic, a member of the Playing for the Planet Alliance, is known for their hit game Pokémon Go. The objective of the game is to catch Pokémon via the app on your mobile phone that uses augmented reality technology. In 2019, in celebration of Earth Day, the game rewarded players who tweeted photos of them cleaning up the planet. According to Nianic, 7,000 players reached the goal, helping to remove 145 tons of trash.



People playing Pokémon Go through augmented reality

Even massively popular games like Minecraft, which has a monthly player base of over 130 million people, got involved. Minecraft partnered with The Nature Conservancy (TNC) to raise awareness for the protection and restoration of our ocean’s coral reefs. In 2018, Minecraft launched a new update that “invited gamers to build with coral in-game to help restore and regrow coral in real life.” It took players only two days to place more than 10 million coral blocks in the game, which helped raise $100,000 to TNC.



Green city skyscrapers built in Minecraft

Trip Hawkins, Founder of EA Games, one of the largest video game companies in the world, says, “Two key strengths of digital games are their interactive nature and capacity for simulation. Our potential is to use games to engage, educate and involve the public in areas of social need.”

What sustainability lessons are being taught?

Continuing to use Minecraft as a prime example, games that focus on strategy and world-building teaches players about optimizing resources. Minecraft allows players to experiment with resources, a system that is impossible to replicate in the real world. Just like in real life, Minecraft uses resources — wood, stone, iron, etc. — that are used to build objects and structures. The more resources that are consumed, the more the player has to venture out to find more resources.

The concept of the circular economy is the same. Our world’s resources are finite. By reintroducing materials back into the production lifecycle, we can:

  • Design out waste and pollution
  • Keep products and materials in use
  • Regenerate natural systems

But there’s still a lot more work to be done

While the video game industry is doing good by introducing sustainable concepts through gamification, video games, powered by game consoles and computers, are consuming a lot of energy in the process. In fact, it’s estimated that video games demand 34 terawatt-hours of energy each year. Video game executives know this. This is surely a strong reason why the Playing for the Planet Alliance spurred so much collaboration among the big gaming companies.

It’s also noteworthy that manufacturers continue to operate on a planned obsolescence business model, which leads to more waste. This is all the more reason why a circular economy is critical to a sustainable environment. We know that sustainable progress is slow. As sustainability continues to become an increasingly important subject for younger generations, companies are going to need to become more transparent about their carbon footprint.

Will we start to see video game companies measuring the impact their studios have on the environment? Some are already doing so. Space Ape Games, for example, has a “green team” that is tracking its carbon footprint, detailing its emissions right on its website, with the goal of becoming carbon neutral.

But will we start to see the carbon footprint measurement of each studio and of each game? Probably not anytime in the near future. But the realization for change, the start of the Alliance, and the increased transparency among some companies is helping pave the way towards a video game industry rooted in circularity and sustainability.

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