Home Business How the business of gaming will evolve in the post-pandemic world

How the business of gaming will evolve in the post-pandemic world

by jcp

By Steve Sobel, Global Industry Leader – Communications, Media & Entertainment at Databricks

The pandemic has seen unprecedented demand within the gaming industry, with many gaming platforms seeing double, triple, even quadruple the amount of traffic they typically experience. The gaming industry is now the UK’s most lucrative market in the entertainment sector.    Over 50% of the population used gaming as a distraction during lockdowns over the course of the pandemic. The most popular game in the UK was unsurprisingly FIFA 21 which was also the bestselling game in 2020 with over 2.18 million copies sold. The UK’s video game market is now valued at £5.3 billion.

With global consumer spending on gaming skyrocketing, companies are faced with the question of how to uniquely capture user attention and monetise playing time. They have one shot to impress the gamer, who now has more choice. This is done through a focus on three key areas: personalisation, monetisation, and innovation. The pandemic, along with an array of new privacy laws, has altered the way we’ve historically thought about these core components of gamer engagement — here’s what marketers and technologists at gaming companies need to keep top of mind.

Create unique 1:1 experiences through data

Prioritising personalisation means delivering unique experiences to each end consumer. This has always been critical, but it’s even more so now when competing with so many companies for gamers’ attention, time, and wallet share. The gaming ecosystem is one unlike sports, film buffs, or any other segment of experience-driven companies; gamers view their experience as a religion, and they expect best-in-class experiences. If they like a specific type of content, they want recommendations coming to them based on that interest or behaviour. And because today’s digital games are built around a community, there’s the social network aspect — users also want to receive and connect around content that their peers like.

Companies can deliver the personalisation needed to keep gamers satisfied by making data-driven decisions on behalf of the gamer. For example, when SEGA Europe saw more than a 50% increase in players in its top gaming titles during the pandemic, it knew it faced a challenge in handling the extra volume of anonymised data coming through the pipeline. It also saw an opportunity to extract more meaningful insights that would enable it to improve the player experience for its 30+ million customers.  SEGA Europe now collects more than 600 data types across 80+ games, with more than 10,000 events every second.  This has enabled the team to create more personalised interactions and understand what gamers do and don’t like, enhancing game balance for fairer, more enjoyable gaming experiences.

Prove the value of a data-driven experience to maintain player monetisation

Gaming companies have always been at the forefront of investing in experience and cultivating fandom. Recently, many have taken it a step further and recognised the opportunity to drive and deliver a 1:1 experience as well as monetise and cross-sell in new ways. They’ve also realised that monetisation might look different soon, pending platform and consumer reactions to new consumer privacy laws.

Preparing for the future of monetisation means considering what a “cookie-less” world could look like. Many web browsers have already moved to block cookies and platforms like Apple will pull back on IDFA and push consumers to give consent when tracking advertising in order to better comply with GDPR, CCPA, and other privacy regulations. The gaming industry has to shift its focus to consumer value in order to attain the data they need to monetise. Step into a consumer’s shoes: what valuable experience can you create that will encourage them to still share their data and keep monetisation feasible? Consumers will only trust those platforms that have cultivated a real relationship with them and proven their value time and time again.

Rather than banking on cookies, gaming companies have to deliver better outcomes faster to still gain consumer trust and gain access to their data. A renewed focus on product and experience will enable monetisation to happen even with consumers’ general distrust of cookies and other data collection efforts.

Monetise beyond subscriptions and transactions

While some within the industry have left advertising revenue for dead as a means of monetising the player experience, I believe advertising is still a relevant way for gaming platforms to monetise their audience and acquire new users beyond subscriptions and transactions. As this McKinsey article covers, tech giants might be betting that the subscription model will become dominant in video games, but video game subscriptions come with their own set of challenges. Many games are turning into free-to-play services, for one, and premium games in a subscription format might not be a “winning formula” or work well for a large portfolio of games.

Gaming companies can instead monetise and engage with gamers in new ways through advanced segmentation and more significant investments in programmatic advertising channels to more efficiently capture new or more casual users. But they have to be thoughtful to keep the interest of their audience — especially at a time when gamers have many options to jump to when they’re dissatisfied with their experience. As this article on the future of ads in video games states, “Gen Z gamers have little to no time for brands that do not add value to their experience, so bringing something special is key.” It’s all about the value add and tying back to the first point, personalisation.

One final prediction: the gaming industry is ripe for even more change over the next few years. Infrastructure providers like Microsoft, Google, and AWS are investing heavily in the gaming sector, and all three companies want to win market share in a market that creates massive amounts of data. This means gaming companies will have a lot more help from these infrastructure providers in delivering seamless, personalised solutions based on industry relevant solutions.

Gaming has always been about personalisation, monetisation, and innovation, but the pandemic has altered their meaning and made these three facets of the gaming experience even more central. Now is an opportunity for marketers and technologists to collaborate and build better experiences.

You may also like