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[edit] First-party developer

In the video game industry, a first-party developer is a developer that is part of a company that actually manufactures a video game console. First-party developers may either use the name of the company itself, like Nintendo; have a specific division name like Sony's Polyphony Digital; or have formerly been an independent studio before being acquired by the console manufacturer, such as Rare or Naughty Dog.

[edit] Third-party developer

A third-party developer is a developer not directly tied to the primary product that a consumer is using, although some, such as Insomniac Games, may have exclusive publishing agreements or other business relationships with a particular manufacturer while maintaining independence. The primary product may be hardware or software.

In the video game industry, many third-parties publish the games they develop, such as Electronic Arts and Ubisoft, while others only develop games to be published under other companies, such as Raven Software. Furthermore, third-party developers can be owned by larger third-parties, such as the relationship between Neversoft (creator of the Tony Hawk's Pro Skater series) and Activision. Because of this, much larger third-parties that also publish their own games are typically referred to as publishing houses and not third-party developers even though they do develop many of their own games internally.

Another example is a developer that is a separate legal entity from the software being used, usually providing an external software tool that helps organize or use information for the primary software product. Such tools could be a database, VoIP, or add-in interface software, among others.