The focus of this thesis was to conduct video game industry representation and diversity research and to clarify what can be done for future video game creation by understanding the players’ motivations and identities. Motivated by the impact that the video game industry has on the economy and its influence on education and mental health. The main goal was to analyze methods, approaches and trends in the development and design of video game projects, which have led to the growth of representation and diversity and provide a unique toolset addressing its main obstacles. The study was conducted based on official literature and secondary data. The secondary data is suitable for this kind of research due to its ongoing updates and the relevancy of the fast-paced industry. The online sources were official news articles, business e-journals, company annual reports, official professional critic reviews, customer surveys, and feedback. This theoretical framework allows for the precise illustration of the current state and perspective of the industry. The results present an overview of the whole video game industry, methods and approaches companies use for story and character creation, how the trends change, and its overall outlook for the future.