Today, gaming is a big business, not because the major tech players are into it, but the fact that young creators are actively being a part of this industry. The inclusiveness and its ability to accept diversity, indeed has turned gaming into a different ball game. Gaming has transformed completely from a product, out of the gaming studio, and played in isolation to a community-based, interactive experience and expression.
Gaming is a social experience today and it is expanding beyond anybody’s imagination. Its market value has already surpassed the combined markets of movies and music. It is an industry worth $300+ billion today. While $200 billion is spent directly on consoles, software and subscriptions, in-game purchases, and mobile ad revenues, an estimated $100 billion is spent on mobile devices, gaming PCs, peripherals, and gaming-related communities. As of 2021, there are 2.7 billion gamers worldwide and 404 million subscribers are following the top ten YouTube gaming influencers.
The Expanding Gaming Market
There are as many as 2.7 billion gamers worldwide today and the combined markets of China, Japan, the US, and the UK represent 47% of all gamers globally and 64% of these players are spending on gaming. 14 other new markets, including South Korea, Germany, France, Canada, Italy, and Spain are generating more than $1 billion in consumer-related revenue. Gaming’s popularity is surging even in Latin America, The Middle East, and parts of the Southeast Asian countries among mobile-first profiles.
The Changing Face of the Global Gaming Industry
Unlike the stereotypic projection of game consumers of the past, who were young and predominantly male, the present-generation gamers are a melting pot of a diversified cultural mix. At present, 52% of males and 46% of females are playing online games. 21% of this population comprises hundreds of millions of new gamers, who are playing for less than 4 years. They are instrumental in driving innovation and change while spreading gaming across the geographies of the world.
What makes the present-day gamer’s profile?
- New gamers, playing for the past 4 years are younger on average: 32 years old vs 35 years that are older than 5 years.
- 30% of new gamers are under 25 vs. 21% of experienced gamers of that age group.
- 60% of new gamers are female as opposed to 39% of experienced gamers.
- One-third of new games are non-white, compared to 24% of those who have been gaming for longer.
The Changing Phase of the Gaming
At present, gamers are playing across consoles, mobile devices, and PCs and there are different gaming genres based on the device they use. The most popular among them is the first-person shooter games, multiplayer-based online combat games, with scope for role-playing, and royal-styled battle games. 60% of the new gamers are playing cross-platform games when compared to 50% of the experienced gamers.
Gaming as a Platform for Social Interactions
Gaming platforms are venues for socialization and COVID-19 has promoted socialization through gaming platforms, as 84% of the players are connecting with new players through video games. 75% of the players using gaming platforms like Discord for all kinds of social interactions, including keeping in touch with their friends.
On average, gamers are spending 16 hours a week playing, eight hours a week watching or participating in game streams, and six hours a week interacting in the gaming forums and communities. They are considering this as their real-world activity, and spending time, discussing the issues, challenges, achievements, and the new trends in gaming with their fellow gamers. The thin line between the real world and the gaming world is getting blurred, though not completely disappeared over time.
What are the primary Growth Engines of the Gaming Industry?
Large scale adaption to smartphones globally is the major force in driving the growth of the gaming industry/ As a result, all the major players of the gaming industry are aiming to develop mobile-first gaming platforms. Gamification and widespread adoption of gaming in various industries, other than entertainment, such as education, business and management, leadership, sports, and training have also promoted its progress. Large-scale emergence and adaption to interactive, video-based social media platforms, such as TikTok, Discord, and YouTube are equally responsible for the widespread expansion of the gaming industry, as they are encouraging users to generate gaming content while providing monetization avenues for them.
New Revenue Models and Monetization Opportunities
Companies and the gaming studios that have traditionally engaged in in-house production and distribution of gaming consoles and gaming software have realized the importance of User-generated gaming content. While the traditional development models spent huge money and time in producing a single new theme, millions of users with diversified socio-cultural traits have maximized the production and distribution of gaming content, themes, characters, and avatars in few years.
While legacy publishers are very slow in adopting new revenue models and technologies like VR, the new and upcoming players that are game producers, are eager to embrace novice ideas instantly. These ideas are not closely guarded by corporate plans that involve a thorough and lengthy evolution and production process.
Exploring the Gaming Environment
Platforms are allowing users to build self-sustainable thematic parks and games that allow visitors to explore, play, and make fun, while the developers/uses/creators make money. While ad-supported and free-to-enter gaming platforms can sell web and in-app ad spaces to the brands that are eager to reach Millennial and Gen Z audiences, subscriber-only platforms relying on subscription revenue. Platforms are quick in realizing the potentiality of the user-generated content in gaming and have readily agreed to give users their due share in the revenue. This attitude indeed paved the way for social inclusiveness and expansion of gaming as a social activity. Roblox, for example, has paid $250 million to more than 1,250 creators, who made at least $10,000 through virtual sales of Roblox games in February 2021. Rec Room is yet another novice case for player-made social, virtual game rooms. Through its Creator Compensation Program, Rec Room has paid more than $1 million in payouts to 2 million content creators this year.
The majority of gaming platforms, including Sony PlayStation, Nintendo, Microsoft, and the top online gaming companies like Electronic Arts, and Ubisoft, are quick in inducing innovations that let the users add music, content, design, and creativity in gaming to enhance social and community engagement. The fan-built success stories like Roblox, The Sandbox, and Mythical Games have built their Platforms on blockchain technologies to engage fans with new gaming streamer tools, providing ample monetization opportunities for creators.
Digital Currency Making Heavy Inroads into Gaming Industry
Blockchain-based digital currency is a catalyst for the gaming creator economy. Platforms and companies are encouraging players to build, explore, make fun and invest in the virtual gaming world, using digital currencies like Bitcoin and NFT. Mythical Games, for example, has created blockchain-based games where players can make money by buying and selling digital goods. This spring, the studio launched an in-game non-fungible token (NFT) marketplace in its Blankos Block Party game, where players can buy and sell toy characters of this thematic world and other digital goods present in the game.
Industry and Platform Initiatives in Gaming
Google has recently announced its plans to target in-app ads, allowing game developers, reaping more revenue through a new feature called tROAS, or target return on ad spend. This new capability helps developers to find users through machine learning to engage them with in-app ads and then bid more or less depending on that likelihood. While leading streaming platforms like Amazon are busy acquiring movie studios, its rival, Netflix eyes on gaming to extend its content shelf life. Netflix enjoys 209 million paid subscriptions, is most closely tailed by Disney Plus, which has roughly half that number of paid memberships and aims to compete with social media platforms like TikTok and Fortnite with gaming, as it considers gaming as an extension to its core entertainment offering. Netflix looks at the storytelling and content creation capabilities of video games to strengthen its subscription service. Finally, Discord is a platform, which is at the center of interactive gaming activity.
Currently, Discord has more than 100 million monthly active users who are grouped as communities of various games, built around specific themes. Discord intends to turn the platform as a communication tool beyond gaming, into study groups to sneakerheads to gardening enthusiasts. It has recently added video chatting to build conversation, screen-sharing during a game, and to build a small group that would let users stream games with their friends.
Gaming is a social activity today and gamers are not playing them in isolation. They are yelling, shouting, and exchanging views on the way the game progress while playing it through virtual chambers/rooms. Online gaming has become a part of their life. Gaming is no longer a product-centric industry today, as it has become a user-centric, community-based activity. As social interactions are increasingly defining the user’s gaming experience, platforms and production companies must focus on measures that provide a positive gaming experience. If you are looking at getting updates from the Gaming Industry, sign up for our Newsletter here!