Gaming has moved from the basement to the boardroom, so why do so many Marketers overlook this opportunity?

It is estimated that the global gaming market in 2020 was worth $159 billion (Reuters). This was a growth of 9.3% on the revenues it generated in 2019. Last year, it is estimated that there were 2.7 billion gamers globally. This is 34% of the world’s population, and a bigger audience than GenZ or Millennials. And gamers are playing for longer, on average spending over 7 hours per week gaming.

 This is a big, big market. It is highly lucrative, with an engaged and hard-to reach audience. In media terms, this would normally make it a high-value channel. But it has remained relatively untapped from marketers, even as reach in many other channels declines.

 Here are a few more stats to whet your appetite before we dive deeper.

• Video games are over 50 years old. In fact, gaming goes back as far as the early 1950s, when academic scientists began playing computer games based on the simulations designed for their research. In the 1960s, M.I.T. professors and students developed computerised versions of games like tic-tac-toe. However, it was not until 1972 that there was a commercially successful video game, Pong, a table-tennis themed game that ushered in the era of arcade video games.
• In the 1980’s, the likes of Atari, Nintendo, and Sega put gaming consoles into peoples’ houses. It is almost 40 years since we’ve been living with gaming consoles in our homes!
• Fast-forward to November 2020, and both the PlayStation 5 and X-Box Series X|S launch and sell out immediately. Making them the most successful console launches in history. So much so, that with restocks limited, resellers were placing the consoles on eBay for as much as $32,000.
• New releases from video game franchises, like Call of Duty and EA FIFA Football, earn up to 3 times that of the biggest cinema blockbusters. Call of Duty took in around $3billion from its latest release.
• In the U.S. eSports, a competition using video games, now attracts audiences larger than the NBA and Baseball (and there is a rise in U.S. colleges that offer eSport scholarships).
• The NBA are changing some of the camera angles to mirror the courtside view of 2K’s NBA video gameplay.
• Market Reach reported that due to COVID lockdowns gaming actually took more revenue in 2020 than professional sports and movies combined.
• There are currently 48 video games currently being developed into a movie or TV show (including sequels e.g. Tomb Raider 2)
• Over 50% of global gaming revenue comes from mobile.
• The average age of a gamer is early-to-mid thirties.

(Source: Global Web Index)

It is unlike marketers to miss an audience with such a hard to capture reach. Especially one that is growing so rapidly, both in numbers of people and the time they spend in channel.

Many recent research surveys show that marketers are generally neophiles. Up-to-date with the latest fads, trends, and tech. They are more likely to have several social media accounts and be subscribed to multiple streaming services. They are already jumping from WhatsApp to Signal. And, what they want most at the moment is their Clubhouse invitation.

They are also professionals. Most decisions that they make are backed by numbers and experience.

So, how has the potential of the Gaming market eluded marketers for so long? It is down to a combination of bias within marketing teams and agencies, an under-developed ad-product from developers and media owners, and a lack of evidence.

Bias within Marketing Teams and Agencies

Even the most open-minded creative marketers are swayed by bias. They know that about themselves. They know that there is always evidence to support any theory or fact that a person chooses to believe. So, even when marketers are looking at the numbers, some gut instinct is turning many of them off gaming.

Gamers have traditionally been stereotyped as young to middle-aged, slightly unhealthy, male nerds. This was the image we were sold in movies and TV shows as gaming grew-up in the ‘80s and ‘90s. The sweaty hard-core gamer geek, not really into the real world or natural light. This negative stereotype has persisted, leading to an availability heuristic around gaming as being nerdy and niche. However, given there is now a third of the planet gaming, this perception could not be further from reality. The State of Online Gaming 2020 Report by Limelight Networks shows that less than 20% of Gamers are ‘experts’ or ‘aspiring professionals. Therefore, the vast majority are casual gamers, which covers all ages groups and genders (average age of 33 years, and only slightly skewed male). In fact, the highest growth in time spent gaming came from people over 45 years, now spending just over 6 hours a week gaming and up 14% on 2019.

The traditional gamer stereotype is also typically of someone sitting at a console or laptop, slightly isolated from the world. Whereas most gaming is played on a mobile phones. On average people spend twice as much time gaming on their mobile, as opposed to using a console or laptop. This makes gaming in many ways as ubiquitous and socially connected as phones themselves.

What marketers need to remember is that Gamers cannot be simply put into one neat little bucket – ‘It’s like saying everything living in the ocean is a fish’. The latest research from YouGov illustrates that gaming is just one of the many hobbies people have and share with others. People who play games also play sports or go to the gym, they go out with friends, they do school runs (or have been home-schooling over the last couple of weeks), they watch TV, and they buy stuff they do not need from the middle aisle in Aldi and Lidl. Gaming is an easily accessible past-time. So, in 2021 it is for anyone.

Undeveloped Ad-Products

Gaming is a huge, frictionless channel for spending and socialising. A study published at the end of last year from Simon-Kucher & Partners and Dynata reported that spending through video games increased by 39% in 2020. It also reported that 60% gamers played longer using social interactions through the channel to beat the isolation and boredom of lockdowns. Little has been done capture the sociability and transactional nature of the channel and translate them into premium ad-products.

Most marketing investment through this channel is in Sponsorships, Influencers, and Advertising. Many marketers still view this investment as risky money or lower-funnel type spending. And the media owners have been slow to evolve their products. The end result is undeveloped, dormant ad-products that sit uneasy in such a dynamic environment.

Time for a reboot.

Zynga’s 2020 Gaming Ad Study reported that gamers prefer native ads that are playable and interactive. Clearly a more active approach from advertisers is needed to meet gamers preferences.

Media owners and marketers must look to the high-level engagement of the channel and design more than just click-thru campaigns. Most ingenuity in this channel has come from marketing departments, finding clever ways to subvert the high cost of sponsorship and advertising in big-ticket games like Fortnite (Wendy’s Food Fight campaign) and EA FIFA (Burger King’s sponsorship of League Two side Stevenage). To move this forward media-owners and developers need to build out an ad product roadmap that will catch-up the advertising products with the experience of the gameplay, then continue to improve these in line with how the channel evolves.

Based on it's audience and the time spent across this environment, Gaming would still under-index in revenue from sponsorship, licencing opportunities, product placement, brand-integrations, influencer, advertising, as a social channel, and events (both on and offline).

Lack of Evidence

This is a gap. We hear of the notable successes and the standout marketing through gaming channels, but, like most case studies, we hear little about the failures. Both success and failure need to be analysed to build effective communications in any channel.

Two areas that stand in the way of prescribing more effective marketing through gaming channels are typical campaign investment levels and campaign type. A high percentage of the marketing investment in these channels is still low-level or test spend. Not significant enough on its own to be measured and analyses accurately, beyond dull metrics like clicks or short-term ROAS. And, as a low-level media investment, the time is not spent optimising the messaging for better in-channel connections either. Meaning the creative execution could usually be better.

Coupled with this, the majority use of these channels has been lower-funnel, conversion led campaigns. The exacerbates the problem further. If the use of this channel has primarily been to drive website traffic, then it is difficult to find the evidence that these channels can help deliver and improve the performance of broader marketing metrics.

Media owners need to think down the line and invest in measurement that proves the attention, the brand recognition, the higher performance, and the sales attributable to gaming channels. They should think of more co-branding opportunities in product development too.

The quick realisation that gaming is a huge market, which will continue to grow, is coming. That it has an attentive audience that is actively spending money and socialising through the channel, is coming. And it is going to come fast, particularly as more marketing spend shifts to targeting context. For some this will be part channel optimisation, while others will look to use this environment build better connections and time spent between their brands and consumers. 

The more agile and creative marketers will reap the benefits sooner than the low-risk, laggards who are unwilling to tap into new channels. There is an old saying from New York that the laggards need to keep in mind,

“Opportunity is never lost; someone else takes the ones you miss.”

 Further discussion on the Inside Marketing podcast