:: The idea
Every game begins with an idea. The idea includes the aim of the game, its educational goals and funny elements. : More

:: Scenario development
The scenario is a detailed description of the idea and the main scenes of the game. : More

:: Storyboard
Once the basic game concept is decided upon, writers and artists work together on a storyboard. : More

:: Creating the characters
As the storyboard is made, designers begin to create the characters. : More


:: Putting all in motion
At this stage, the character is basically a digital marionette. The game developpers bring this figure to life by instructing the computer to move the character. : More

:: Game environment
One of the most important aspects of modern game creation is the environment. : More

:: Code
The code is what makes all of the game elements work together, though unseen by the user.
Code is the set of computer language instructions that controls every aspect of the game. Most games are written with custom code based on the C programming language. A 3-D code engine is almost always used to generate the incredibly complex code necessary for all of the polygons, shadows and textures the user sees on the screen.

Another important aspect of the code is the artificial intelligence component. This is the logic of the game, and it also establishes the physics of the game world, detecting the interactions and collisions between objects and controlling their movement.


:: Postproduction and Testing
Once the game is complete, it enters the postproduction phase. This phase includes extensive testing, review, marketing and finally, distribution. : More

Sources:

:: http://www.pbs.org/kcts/videogamerevolution/inside/how/06.html
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