These are the trends leading the gaming industry in 2020
Gaming is big business and is about to get even bigger. Last year, the video gaming market in the US alone was valued at close to $20 billion, according to the business data platform Statista. A generation of gamers has grown up and this powerful consumer group is comfortable with technology and has spending power. What’s more, games are now available in multiple formats, with new technology promising even more immersive and interactive design and content. No doubt the current coronavirus pandemic lockdown is further boosting the industry.
According to the latest studies by Ernst & Young, the last five years have seen gaming revenues almost double, with the industry forecast to be the fastest-growing media and entertainment sector in the next two years. There are challenges ahead too, with 70 percent of the 236 video game executives surveyed by EY admitting that the next five years will be the most testing. The consumer has matured, as has expectations.
So, what will be the key trends leading the gaming industry? Cost will be a major factor since developing games is complex and involves huge investment. This will be even more so as, steered by the consumer, games become increasingly sophisticated in their production levels. Regulations and cybersecurity will add to the cost. And, in much the same way as retail is becoming more and more experiential, we suspect the focus with the gaming industry will be on creating experiences too. In fact, of the executive’s EY surveyed, 79 percent admitted that their efforts are increasingly focused on creating great game experiences for the consumer.
The predictions indicate more and more that gaming will become a mainstream activity. A large majority – 92 percent of sixteen to twenty-four-year olds – have at least one game on a device at any time. There will always be the blockbuster games, but the prediction is that rising demand and this wider pool of players – casual players – will also lead to a bigger mix of designs, more imaginative storytelling, and interesting content. It can also lead to greater opportunities for smaller makers, maverick designers, and developers who can use this opportunity to push the genre in new directions.
This will naturally lead to an increase in mergers and acquisitions with larger gaming companies buying our technical talent, gaining access to new markets, and so on. While at the same time the major tech companies will no doubt want a bit of the action and will enter the space through these acquisitions. In this context, the gaming industry will be an interesting one to observe.
Needless to say, much like the plight of DVDs, boxed gaming discs are being replaced by streaming and apps. Gaming-as-a-service, or GaaS, already represents almost half of total industry revenues and is expected to rise substantially in the next five years. This business model offers huge benefits as the providing brand can constantly develop content, add and delete by following market trends, and evolve according to consumer behaviour. Crucially, games can regularly be updated with new technology too.
We are all seeing a shift in how gaming is becoming much more than just entertainment. Education and, in particular, sports are predicted to evolve greatly through the advancement and affordability of augmented reality and virtual reality. As the consumer builds trust with such technology, gamers can transform their offerings with the opportunity for more immersive content. We are also seeing a focus on unique games design. Makers are engaging with artists and filmmakers; some are inviting respected composers and musicians to write tailored scores for their particular games.
Perhaps, other industries will learn from the universal language of gaming. If nearly a third of the world are active gamers, then by default it creates a macro-level way of interacting with technology and one another. Observing gaming can teach brands how to operate in different markets and languages. We are already seeing this with retail which is using ideas from gaming to offer immersive and experiential consumer transactions. At Nike in China, customers see themselves play in real-time alongside avatars on a screen, while another captures images of players and turns them into lookalike avatars. The customer then puts on a pair of Nikes and runs on a treadmill to control their movements in the game, providing highly shareable video content.
Branding will continue to play a pivotal role in the future of gaming. Just look at the enduring popularity of, say, Nintendo which continues to attract tribes. As the pool gets more crowded, brands need to stand out and be savvier. A strong brand ethos can help too. Among our clients at Spinach Branding is Camelot, the operator of the UK National Lottery and associated games. Having created their annual report for the last two years, we were struck by the company’s extraordinary business model. Camelot’s overarching objective is to use money raised by the Lottery for a huge number of external charities and art organisations, providing opportunities for the less privileged and supporting communities across the country.
‘Camelot is a gaming company that is innovative, entertaining and accessible, with mass consumer appeal.’ says Leigh Banks, branding director, and partner at Spinach Branding, ‘yet also contributes to society, changing lives and communities for the better. They are a stellar example of how gaming can be commercially successful and still do good.’ For gamers, this decade will mean serious business. And brands, big and small, should keep an eye on technology and trends, invest wisely, listen to their customers, and adopt a business model that is flexible to change.
Take a look at our projects with gaming companies such as Camelot here.
Spinach Branding is a specialist branding agency based in London. We work with established businesses and start-ups around the world to build and refine their brands. See how we work and get in touch to discuss your brand.< Back