A game server (also sometimes referred to as a host) is a server which is the authoritative source of events in a multiplayer video game. The server transmits enough data about its internal state to allow its connected clients to maintain their own accurate version of the game world for display to players. They also receive and process each player's input.

Dedicated servers simulate game worlds without supporting direct input or output, except that required for their administration. Players must connect to the server with separate client programs in order to see and interact with the game.

The foremost advantage of dedicated servers is their suitability for hosting in professional data centers, with all of the reliability and performance benefits that entails. Remote hosting also eliminates the low-latency advantage that would otherwise be held by any player who hosts and connects to a server from the same machine or local network.

The cost to operate dedicated servers is sometimes met by a game's developers (particularly on consoles) and sometimes by clan groups, but in either case, the public is reliant on third parties providing servers to connect to. For this reason, most games which use dedicated servers also provide listen server support. Players of these games will oftentimes host servers for the public and their clans, either by hosting a server instance from their own hardware, or by renting from a game server hosting provider.

A dedicated game server is essentially similar to any other modern computer in its physical components. They generally use typical server-oriented parts for most of their components except the CPU- motherboards, memory, storage, and so on. Since game server performance is typically limited by a handful of key processes that parallelize poorly, dedicated servers for modern games commonly use high-end consumer CPUs for their very high single-threaded performance, with each machine running a few or even just one instance.

Dedicated game servers are often rented from a hosting provider; for less demanding games or those with lower player counts, when single-threaded performance requirements are no longer at the uttermost limits of current technology, a single physical server may host dozens or hundreds of instances. These run on typical compute server hardware, including a manycore CPU and very high memory capacity. In most cases, they are rented out per-instance, with the rates depending on how many CPU cores and how much memory and storage is required for each instance. This allows very affordable rates for clans or private individuals who only need a handful of instances, and allow publishers to scale their server count with their currently-active player count, only paying for the resources they actually need at any given time.

Listen servers run in the same process as a game client. They otherwise function like dedicated servers, but typically have the disadvantage of having to communicate with remote players over the residential internet connection of the hosting player. Performance is also reduced by the simple fact that the machine running the server is also generating an output image. Furthermore, listen servers grant anyone playing on them directly a large latency advantage over other players and cease to exist when that player leaves the game.

However, listen servers have the advantage of being essentially free and not requiring any special infrastructure or forward planning to set up, which makes them common at LAN parties where latency and bandwidth issues are not a concern. They are also common in console games.