The Evolution of Gaming

From the arcade boom in the 90s to the rise of home consoles, PC and mobile games, gaming has grown to a 168bn industry and the biggest entertainment sector. Gaming culture is everywhere today. You can race on Mario Kart and then watch The Super Mario movie on your favorite streaming service. You can shop at 家得宝 from within Roblox . You can catch a The Kid LAROI concert on Fortnite . You can play as KFC 's Colonel Sanders in the latest version of Street Fighter.

With 71% of coveted Gen Z playing video games and watching video game content, gaming has become a key channel for marketing globally. But as gaming evolves, appealing to gamers is not a one-strategy-fits-all situation. Hence in this article I want to dive into the cultural evolution of gaming, and what this means for brands and advertising.

Who is playing video games?

Video gaming is one of the most widespread digital behaviors, with over 2.6 billion active gamers worldwide, up from 2.0bn in 2019. The average gamer is 33 years old and is as likely to be female as male, per the Entertainment Software Association ’s annual gamer profile. Today, there’s a game for every person, occasion, want and need. People can be themselves and know that there are games that will invite, appeal to and celebrate those traits.

Why are people playing video games?

In a survey by Twitch Ads, video game fans identified escape as a primary reason to play games. But games also empower people to forge their own identities and build a sense of belonging.

Games also help people do things they may not have a chance to do in the real world—like seeking out the spotlight and making friends, according to the same survey. An overworked single dad, for example, may not have the time to play touch football with his friends on the weekend, but can join them after the kids are asleep for a game of Madden NFL.

Other games provide players with coping strategies for stress relief and tools for creative self-expression, and open the door to new audiences, like non-thrill-seeking players. Gaming has also become a vehicle for facilitating positive play and dialogue within games exploring topics like mental health, gender equality or diverse sexuality.

Where do people play?

Players have increasingly embraced multi-platform games, with over 60% using more than one hardware today, with Super Gamers most likely to play across two or more platforms. Accessibility is the main reason to play games across multiple platforms, followed by the desire to connect with friends in-game.

Most popular Gaming genres

• Action Games like God of War emphasize skill challenges such as hand-eye coordination and reaction time
• Battle Royale Games like Fortnite allows single player or teams to compete against other player in a real_time challlenge to be the last player standing
• Action/Adventure Games like The Last Of Us contain elements of action and adventure
• Role-Playing or RPG Games allow players to choose their own adventures and develop their own characters with immersive, story driven game play
• Racing Games such as Formula 1 resemble real-life racing events
• Adverture Games such as Stray provide interactive stories driven by exploration and puzzle solving
• Fight Games such as Street Fighter promote combat between two or more characters.
• Real-Time Strategy games such as Star Craft require methodical planning ti achieve victory, often turn-based
• First Person Shooters (FPS) games such as Call of Duty test gamers spatial awareness and reflexes at shooting targets in both single and multi-player envioronments
• Simulation games such as The Sims allow gamers to escape reality and enter new worlds, occupations or environments.
• Sports Games such as Madden simulate traditional physical sports like basketball, football, baseball or american football

The Influence of Gaming on other Media

The impact of video games can be seen in every other type of entertainment and media, from film and TV to books, art and even fashion.

Certainly, video game adaptations are nothing new for Hollywood, but the success of some has been spotty—think Super Mario Bros, Street Fighter or Resident Evil. But as prestige video games (popularly referred to as AAA in the gaming industry) take on richer, more complex narratives and feature more robust character development, they’ve become formidable fodder for content by other industries.

The success of The Last of Us is a stellar example. The game was set apart by its ability to mix action, story and protagonists who didn’t look like or behave like typical action game characters, and it went on to sell tens of millions of copies. It not only spawned a video game sequel, but also a limited-edition comic and a much-honored HBO series. The TV version succeeded in large part because it stayed loyal to the game’s storytelling.

But the influence of video games goes beyond simply adapting characters and game plots into movies. The best-selling novel Tomorrow, Tomorrow and Tomorrow takes place in the world of game development. The action-comedy movie Free Guy is set in a massive multiplayer game. And the U.K.’s Royal Philharmonic Orchestra has sold out Royal Albert Hall for concerts of video game soundtracks.

The Role of Lifestreaming

In the past, gaming was more of a one-way street. It didn’t offer players much opportunity to connect beyond the actual gameplay. Livestreaming on platforms like Twitch has significantly enhanced the social nature of gaming, by inviting people from across the globe to build connections and friendships, show off their skills, learn new things about a game they’re playing or want to play eventually, and of course, have a great time while doing it.

At TERRITORY Influence (Bertelsmann Group) , we have conducted a European research study to better understand Twitch user behaviors and expectations regarding live streaming and in-stream advertising:

The Role of E-Sports

You can’t talk about the shifting gaming experience without discussing the global rise of esports. Competitive gaming is now as rigorous and organized as traditional sports. and with an audience to match. According to Newzoo , the global esports audience will surpass 650 million people by 2025.

Today’s technology allows esports competitions to be broadcast worldwide. Twitch, for example, livestreams the biggest esports tournaments and gives esports professionals an opportunity to interact with their fans in real time.

The Evolution of AR and VR

AR adds a new level of accessibility and action to video games. Consider Pokémon Go, the mobile game that took the world by storm. The game combined geolocation services with AR to play up the feelings of discovery and wonder that people typically feel inside a game, bringing that excitement into the real world. Pokémon Go-ers could be spotted battling it out at the gym, checking lures at the park and celebrating wins together, in person. All they needed? Their phones and a desire to catch em’ all, of course.

Advances in VR also offer new benefits for gamers that didn’t exist before. For example, the ability to overcome real-life fears, like a fear of darkness in games like Half-Life: Alyx, or a fear of heights and flying in No Man’s Sky—all minus the real-life risk. For improved physical exercise and mental health, gamers can look to VR games like Rec Room.

Opportunities for Brands and Marketing

Video games aren’t just fun. They can be profitable for savvy advertisers looking to reach one of the most lucrative and elusive groups of consumers. So how can brands jump onto the gaming bandwaggon?

In-Game Advertising

In-game advertising merges ads with the game environment seamlessly. Imagine seeing billboards while racing through the streets or branded in-game products you can purchase. the most common types includes static or dynamic in game advertising or in game product placements.

Dynamic in-game advertising is more of a turnkey solution for brands who don’t have a strong foothold in games, don’t have bigger budgets and haven’t really leaned in ( Paul Mascali , Sports Marketing Director at 百事 )

One of the most famous in-game advertising campaign already took place back in 2008 with Barack Obama placing ads in computer games such as Guitar Hero III, Madden NFL 09, NBA Live 08, Burnout Paradise, Nascar 09 and Need For Speed Carbon for his election campaign. In 2012, the president repeated the campaign, showing his ads in NFL Madden 13.

Sponsored Game Content

Sponsored game content involves integrating a brand or product into the actual game content, making it even more tangible and visible to the players and engaging them with the brand. Brands with clout, and the budget to match, can get involved earlier in the development of a (hopefully) blockbuster game, creating a more integrated ad experience. A hard-coded in-game advertising placement means marketers collaborate closely with developers to make the brand an actual part of the game and not just a digital billboard.

• For the 2022 basketball season, 百事 included a branded Gatorade Training Facility into the NBA2K game. Far more than a fleeting ad during gameplay, players could go to this part of the game and consume drinks with their player avatars, thus improving their player’s performance level.

• Fashion brands have also been at the forefront—finding ways to “dress” players’ virtual selves. In recent years, 拉尔夫·劳伦 has shown up in Fortnite , while Gucci is sponsoring Roblox and Marc Jacobs Animal Crossing. Lacoste created a digital collection for Minecraft which became so papular that they went-on to produce a full physical wardrobe of clothing and accessories. NBA 2K23's MYCareer mode allows gamers to customize their basketball players using digital versions of real gear from brands like adidas, Nike, PUMA Group or Under Armour.

• Going a step further brands could not only co-create digital accessories, but co-create entire game characters. To celebrate the launch of the sixth installment of the game, fried chicken chain KFC gave its mascot, Chef Colonel Sanders, a Street-Fighter-worthy makeover. Players who recorded and shared their use of the Colonel and his menu of moves, which included Big Crunch Combo and Boneless Combo, in the game, were gifted real-life rewards—like a $50 KFC gift card—from the brand.

E-Sports Sponsorships

For brands, esports and competitive gaming entertainment present a unique opportunity to engage with the gaming audience. And while some sponsors seem a natural fit for the esports audience—think 英特尔 , Red Bull , Mountain Dew or 微软 —other non-endemic brands have risen to the opportunity, taking advantage of the up-close-and-personal relationship esports teams have with their fans. Brands like Dunkin' , 富达 and State Farm serve for example as official marketing partners of Twitch Rivals, Twitch’s original head-to-head competitive gaming series. Honda has become an official car sponsor of e-sports Team Liquid to establish a longer-term relationship with the gaming community.

Cosmetics giant 欧莱雅 has sponsored five-time world champion women’s esports team Dignitas , and the team has given live makeup tutorials and shared product content information with their streaming communities. But L’Oréal sought to engage an even wider audience within the gaming community by reaching male consumers (via its L’Oréal Men Export brand) with a sponsorship of Fnatic , showing up on their shirts for games including FIFA and the League of Legends World Championship.

More insights and best practices to engage Millennial & GenZ consumers with esports in attached Territory Influence article.

Influencer Marketing

Finding the right partners can be difficult within a gaming ecosystem that includes many games, leagues, teams and players. Partnering tactically with gaming influencers who already have established audiences can deliver branded content while engaging authentically with the community.

One thing we are seeing is our gaming partners leaning more into gaming influencers. Blizzard Entertainment had a very strong influencer approach which included enabling some streamers to livestream gameplay during early access and open beta, while at launch they had unique, exclusive item drops each week for the first?four weeks. This type of activity is a really effective way to encourage streamers and go a step beyond traditional marketing. (Craig Knapp, SVP Twitch)

Global food giant 雀巢 might not seem a natural fit for a young gaming audience, but has successfully used influencer marketing as an early adopter in the space. While not exactly an endemic brand, Hot Pockets are familiar to the gaming community as an inexpensive and convenient snack to eat while gaming. The brand also keys into nostalgia for gamers in their 30s and 40s. This familiarity helped Nestlé partner with influencers who were able to deliver branded content while leveraging their authentic voices.

We don't want an influencer to come through as a parrot... if an influencer is using our marketing verbiage, we're failing ( Douglas Veney , Influencer and esports marketing manager at Nestlé)

General Tips for Marketers

Be authentic:?Being new to video games isn't a bad thing. While you should do your research and make informed decisions on messaging this audience, you shouldn't overdo it with “gamer speak”—no need to become a meme. Instead, focus on connecting with gamers and the gaming community at large, whether that’s working with video game livestreamers on Twitch or crafting other brand sponsorship opportunities.

Determine the right sponsorship opportunity: Whether it’s connecting with a streamer who livestreams their favorite cozy games on Twitch or deciding to sponsor an esports team or event, brands need to figure out what sponsorship opportunity is best for them. Consider brand suitability, but allow the streamer to represent you in the same authentic way that they’ve built their own audience.

Build brand affinity beyond traditional channels: Your audience isn’t just consuming media in traditional marketing channels. They’re livestreaming and watching livestreams on Twitch, they’re watching short-form videos on social, and they’re participating in conversations on web forums and online fan groups. Find ways to associate your brand with the fun and community that surrounds video games to reach this audience, instead of exhausting the same old tactics.

Represent the full spectrum of gamers: The gaming community is not a monolith; it represents the diversity of the real world. Diverse gamers have clearly said they want brands to be inclusive in their gaming campaigns. Be sure your brand supports the gamers and streamers who represent the best aspects of the gaming community.

Have some fun: Remember that people play games because they find it joyful. Any campaign or sponsorship should engage and delight people in much the same way.

Summary & Conclusions

Video games and gaming related content will become a key channel for savvy marketers looking to engage with younger consumers. Identifying the right marketing strategy can be challenging and requires a thorough understanding of the gaming landscape and detailed knowledge regarding the advertising options available. Our team of gaming experts at TERRITORY Agency is happy to advice your team and support your brand to successfully capture opportunities in gaming. Also happy to read about your experience and success cases in the comments below.