Video games — the 158-billion-dollar market — has been at the forefront of revolutionizing the way people spend their idle times apart from texting, talking, or surfing social media contents. With the boom in technological advancements, features, mobile handheld devices including smartphones, and massive popularity, the path looks more lucrative than ever before, registering a staggering 9.2% growth year on year with more than 2.6 billion players worldwide, typically more than the total number of users who use Facebook! In fact, according to a survey published, an average gaming user spent a minimum of 120 USD over a period of three months that included streaming charges, downloads, upgrades, and in-game transfers/donations. The annual gaming tournaments hosted worldwide have racked up an eye-bulging half a billion views and distributed prize money worth over 200 million dollars per year.
Pretty amazing, no?
So, how did it all begin?
Let’s dive into it.
The Journey to 21st Century
Today’s generation has been brought up on Xbox and PlayStation, boasting of sophisticated features that can render high definition 3D graphics providing a near-perfect simulation of reality experience through characters and detailed landscape. Imagining a period just 50 years before would have found very select and crude gaming machines in laboratories and institutes. They were instead designed for experimentation and had very limited capability to operate. With the advent of Atari’s Arcade Machines, there was a surge in interest towards electronic games which put many developers alongside in this new-found race to experiment with various features that could provide a better experience to gaming. Interestingly, arcade gaming also introduced the idea of Multiplayer which allowed several players to play and compete based on a high score achieved. PLATO, originally built by the University of Illinois, was one of the first in line to run a 3D game named ‘Empire’- an advancement that represented the birth of online multiplayer gaming as we know today.
As gaming consoles started becoming popular, the look and feel of gameplay took a new turn. The development of microprocessors and VCS led to the introduction of cartridge games that signified a new landmark in Home-Gaming. Players could also have better control of in-game characters via joystick — a feature never seen before. By the 1980s, the market was ripe for personal computers like Apple II and Commodore 64 which were cheaper, had powerful hardware capabilities than consoles, and gave the Coders a better-designed platform to develop their own games from scratch. Later inventions included the portability of consoles with PCs and the introduction of more complex and less linear games.
1993 was a breakthrough year in the introduction of ‘LAN Gaming’ with the game titled ‘Pathway to Darkness’ that would forever change the face of Online Multiplayer Gameplay. Following suit, the discovery of the Internet and the use of Ethernet Cards opened up the reach and accessibility of players to play online and in increasing the interactivity and social aspect of games, paving the road for the future development of large-scale experiential gaming that modern gamers currently enjoy.
There were also several attempts to exploit the use of consoles to harvest the potential of the Internet by allowing players to download games from programmers via telephone lines and cables. Yet, due to the internet still not having gained mainstream use and popularity and the cost-intensive approach one had to deal with, it was a failure. Sega, the gaming giant, had developed the Dreamcast console based on this idea but ultimately became the sole reason to quash those dreams. Subsequent game equipment manufacturers redesigned and started learning from the mistakes they had made. Slowly and Slowly, online functionality became the core and integral part of the gaming industry.
Fast-forwarding to the present scenario, the role of the internet in games has exploded at an unprecedented rate. With powerful graphics operation and processor capability, more and more players are tuning up to countless hours by competing in famous online multiplayer games and communities. The development of First-person-Shooter games has given birth to those highly popular and intense ‘Deathmatch’ mode of gameplay. Building upon that, there are now millions of online forums and chat groups that talk about newer features and technological buzz centered around game development and hardware, tips and tricks to play, etc. that have massively improved the interactivity and gameplay experience. Scores and scores of articles and renowned magazines are delivering richly curated content outlining the user compatibility and measured ratings depending upon the complexity, openness and detailed features put into the game. The rising popularity of some strategy-based games like the Clash of Clans have led to the development of Clans — online groups comprising of people with shared interest and goals that regularly compete in various multiplayer tournaments and activities.
Some of the most popular genres of games played: First-Person-Shooter, RPG, Puzzle, Strategy, Sandbox/Open World, Racing, Simulation, Sports, etc.
In fact, with the turn of the smartphone era, these have only escalated. According to a report, as of 2020, the Google Play Store has more than 360000 games, Steam, the online PC Gamestore has more than 30000 games while the Apple store registers with more than 657000 games apps. These trio combined have garnered more than 3 billion downloads to date which is further continuing. Mobile gaming apps like PUBG, Among us, Subway Surfer, Candy Crush, etc. have resulted in more than 1 billion USD in combined revenues. Reasons for popularity include improved in-game performance, gifts, online transaction enabled upgrades, and downloadable features with ease of control, UI, and navigation.
Trends in Gaming Industry
- Game Developers and creators are focusing on releasing games on the cloud and providing the game experience in the form of service. The complexity of games is increasing day by day which is ultimately proving extremely difficult to look for a retail form of distribution. Hence, more investments are being undertaken to provide rich gameplay and experience to the users online based on the freemium model of content availability. User engagement to a specific form of games has unearthed useful analysis on what features can be made freely available or boxed inside the premium upgrades.
- The use of live streaming platforms to generate creative visual and gaming content is increasing day by day. Views on popular games today easily pass off millions in a few hours. This has heralded a new form of creation whereby gameplay contents that incite competition or comprise of unique moments or experiences become popular among communities and individuals as well.
- Consumers are expecting more active and intense participation to dictate how games need to be designed by developers. In fact, most of the famous corporations are already releasing trial or beta versions of unreleased games that are then specifically distributed to popular web game influencers and hosts that review the same and give useful insight generated feedbacks for further development and improvement. Content creation is an important aspect these days with e-sports fueling the newfound love and enthusiasm for individuals.
- Gaming communities are mushrooming now and then depending upon the shared interests of users and the type of game preferences. With easy to form and communication features on websites and forums including social media channels, millions of users are generating endless traffic of personal content, videos, images, and opinions of their favorite franchises. This has, even more, accelerated the use of digital video channels and platforms by pushing aside the traditional mediums.
- Apart from living streaming gameplay videos, experienced users are taking over the roles of opinion givers and product or service reviewers that are currently gaining momentum in the mainstream. The future content will evidently be focused on such structured materials and contents that provide data and evidence-based news and coverage of the latest buzz and advancements taking place in the industry.
- E-sports or electronic sports are organized online multiplayer competitions involving professional gamers and teams that live compete for exciting prizes. These are having prominent support from the gaming communities all over the world. With increasing revenues and sponsorships from renowned game creators coupled with betting rights, they present a prospective future ahead.
- In the lieu of increasing the user experience, the use of Artificial Intelligence, Augmented Reality, Virtual Reality, and voice recognition have found increasing preference. To develop a complex interactive system that reacts based on user movements, navigation choices, or gestures, the AR and VR aim to create artificially inhabited worlds and platforms/objects/characters that create an enthralling and emotional journey that is near close to real-life experience. Building and development of rich and engaging content, real-time interaction with objects and players, and captive experience will be the key drivers for growth and innovation in this specific field. In fact, many small startups have ballooned up using these core concepts and collaborating to develop creative games.
Challenges
- As we all know and expect, the content in any game is always the king. Even a small game that can tactfully engage its audience with surprising and unique gameplay can reap huge popularity and profits. And this presents a significant challenge to every content creator and developer. Despite more than thousands of games available online and with an approximate rate of 45 new games added every month, it becomes confusing to select the better ones from among such a large audience. More so, quality cannot be measured as such depending upon just the size, images, or visual graphics. Hence, an increasing pressure to promote each new game and develop its own USP is rather becoming tougher day by day.
- Maturing markets in Europe and the US are a sign of stress for corporations. Despite introducing radical elements, characters, or game plots, it is more important to focus on in-game services and better quality in handling and use of products being developed. Increased regulation and scrutiny from authorities are a constant source of fear and volatile operational expenses. Owing to this, many are investing extensively in research and development to harvest new technology and also look for strategic alliances via mergers and acquisitions.
- Available of free information as greatly improved user knowledge and analysis regarding the gaming environment. Therefore, this results in a big NO for substandard games and features that do not keep up with the newer trends and preferences of consumers. Moreover, the ability to acquire newer customers for content and retain the older ones is a real pain these days. Although, the use of Data Analytics and Social Media Trackers is proving to be a boon to deeply understand the insights and consumer behavior, the cost of advertising and promotion with personalized targeting is interestingly becoming more expensive which is further elevated with more competition in the already saturated market.
Covid-19 Impact
As with any industry, Covid-19 has been a massive disruptor to the normal working of each economic sector around the world. The gaming industry too had its own share of effects. Some of the key observations:
- Due to lockdown initiated globally in many countries, there was a stark 46% increase in the total number of daily active users resorting to utilizing the time in playing more and more games on consoles and PCs with a 17% increase in mobile gaming.
- As opposed to increased game hours or user engagement in games especially on weekends and lesser on other days, the lockdown in fact led to a uniform engagement all over the week with the gap between weekend and non-weekend traffic to just a difference of 0.56%.
- In-app purchases and microtransactions have increased by a staggering 24% as opposed to the benchmark set by the 2019 period.
- Mobile ad-revenue has seen an increasing trend in recent years owing to exciting and visually appealing content creations. Covid-19 in fact surpassed all the records by registering a 59% jump in revenues within a few months of pandemic initiated lockdown.
- More users taking to passing their time by playing games has resulted in consumers on an average installing 84% more apps than usual spree as seen in 2019. Surprisingly, the conversion rates of users to install games through advertisements are up by 23%, an all-time high.
- Carefully looking into the Consumer behavior regarding the types of the game installed and being played, the popularity for casual Commuter apps was down by 7% whereas the demand for hardcore games was reaching a jump of 39%. Additionally, social gaming apps had the best time with a massive increase in traffic by 83%.
Conclusion
The Gaming industry certainly has a bright future with pervasive and creative content that emotionally appeals and aims to provide for surprise moments/twists that truly change the way consumers perceive the games and interact with the same. Even though the industry is already encountering a slew of challenges, the focus on technological innovation and quality will be an extremely powerful tool that can bring more revolutions into the way we experience the gameplay. Needless to say, with an expected market capitalization of more than 250 billion dollars by 2025, the face of the game will never be the same as to what it stands anytime. It will always rise and be the ‘Powerhouse’ of ideas and innovation.
References
- Chikhani, R. (2015, October 31). The History Of Gaming: An Evolving Community. Retrieved October 23, 2020, from https://techcrunch.com/2015/10/31/the-history-of-gaming-an-evolving-community/
- Video Game History Timeline. (2016, March 24). Retrieved October 23, 2020, from https://www.museumofplay.org/about/icheg/video-game-history/timeline
- Esports. (2020, October 20). Retrieved October 23, 2020, from https://en.wikipedia.org/wiki/Esports
- The Major Challenges For The Gaming Industry Over The Next 12 Months. (1900, January 1). IGB Live! 2020. https://www.igblive.com/exhibitor-press-releases/the-major-challenges-for-the-gaming-industry-over-the-next-12-months
- The 6 Trends Shaping the Future of Gaming & Digital Media. (2016, February 8). Newzoo. https://newzoo.com/insights/articles/how-games-are-shaping-the-future-of-digital-and-broadcast-media/
- G., D. (2020, June 23). 43+ Out of This World Video Games Industry Statistics in 2020. TechJury. https://techjury.net/blog/video-games-industry-statistics/#gref
- MordorIntelligence. (2020). GAMING MARKET — GROWTH, TRENDS, FORECASTS (2020–2025). https://www.mordorintelligence.com/industry-reports/global-games-market
- Irpan, E., TenBoer, N., Gohil, A., & Young, R. (2020). Covid-19’s impact on the gaming industry: 19 takeaways. Unity3D. https://create.unity3d.com/COVID-19s-impact-on-the-gaming-industry
