All to play for: how the gaming boom is creating new realms for adventurous brands
After a series of major M&A moves in the gaming sector, Sophie Harding, head of futures and innovation at Mindshare UK, looks at the landscape for brands and where the big opportunities lie.
The gaming industry has reportedly increased by half a billion players over the past few years, with Accenture predicting more than 400 million new gamers globally by the end of 2023. Despite the gaming industry’s sustained, long-term growth and advertisers’ ambitions to reach new audiences, many brands are only now truly tapping into this huge digital audience.
Big tech has thrown its hat into the ring, with Microsoft engaging in a record-breaking deal, purchasing gaming giant Activision-Blizzard for an eye-watering $68.7bn in an attempt to secure its position as a leading games developer in the largest deal in gaming history – regulation pending. Large acquisitions from both Sony and Take-Two happened in the same month as the Microsoft Activision-Blizzard deal, so were overshadowed. And just this month we see Netflix purchasing Next Games and Amazon launching its cloud-based game streaming service Amazon Luna in the US. This feels like the tip of the iceberg, and we should expect more acquisitions and launches this year as companies continue to beef up their gaming propositions and cement their metaverse ambitions.
What are the biggest opportunities for brands around gaming?
The virtual playground that is the gaming industry is expansive and now a mainstream interest, and 2022 will arguably be the year where this phenomenon becomes a central part of many brand marketing strategies. Not only does the typical console or PC gaming environment provide ample opportunity, but the thriving esports scene and explosion of the mobile gaming market means distinct categories and audience segmentation opportunities are there for advertisers to sink their teeth into.
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Long before Meta pitched the word ‘metaverse’ into daily parlance, gamers have been living at least partly in virtual worlds, meeting and competing with people from around the globe, investing in virtual assets and creating virtual memories.
As we see brands investing heavily in virtual spaces, gaming will likely remain a driving force in the evolution of bigger and more holistic virtual spaces. From a media perspective, gaming is now becoming a regular aspect of planning.
Virtual media channels
In our 2022 Trends report, we explained that we expect a dramatic increase in interest from brands that are now attempting to take ownership of the online landscape and establish their own virtual brand presence.
We are still seeing brands clambering to exist within virtual environments, such as Fortnite and Roblox, as they repeatedly prove themselves as mediums for highly-successful brand partnerships.
These new highly-adaptable online games, which have vast ready-made audiences and feed off regular updates, are a golden opportunity for brands aiming to establish themselves virtually.
John Lewis needs to be commended for its even broader thinking in this space. Partnering with ITV, the brand launched the first synchronized campaign activation across Fortnite, ITV’s linear and digital channels, and out-of-home (OOH). This is a good indicator that advertising in games will eventually become part of the holistic offering that media agencies and marketers offer brands. A recent report showed that major agencies have already started to move, with 93% of media buyers intending to run in-game advertising by 2025.
The beauty of the vast gaming landscape is that brands can specifically target certain groups and consumers depending on the game they choose, and with an influx of new gamers some demographics have really expanded. Want to reach younger generations? Try Roblox. Older? Try Candy Crush, with its 270 million monthly players who have an average age of 30.
Our trends research also highlighted the need to think beyond demographics in the gaming space. Gaming was particularly popular with an early adopter audience, which more often than not is more of a mindset than a specific age group. And when targeting in any gaming environment we also need to turn to the need states of that specific game and that moment in time, which are constantly changeable – everything from relieving boredom to having fun with friends.
A choice of game reflects a person’s mindset and character in the same way a luxury brand v a discounted product would. Adventure games attract a very different type of person than a farming simulator, and brands can use this to strategically target their adverting efforts.
It is heartening to see that brands are starting to ditch the assumption that gaming is typically for young men. New studies show that there is now a balance between the genders, with women accounting for 47% of gamers in Europe, totaling 56 million female players across France, Germany, Italy, Spain and the UK.
Brands such as Benefit cosmetics have launched an official channel on Twitch featuring a ‘Game Face’ campaign, which aims to support and empower women in gaming. They are also targeting women in esports by teaming up with the highly-successful team Gen.G to produce a series highlighting female esports players and streamers.
And esports is proving a popular platform for luxury fashion brands too. Take the Louis Vuitton x League of Legends collaboration, which led to the creation of esports-related items such as an in-game skin line, a Louis Vuitton-themed trophy case for the world championship and a real-life launch of over 40 League of Legends-themed clothes and accessories.
It is easy to see how the production of virtual goods could be the way forward in targeting female gamers, and this will allow a new avenue for brands to not only interact in the real world, but to also provide value within virtual landscapes.
The explosion of virtual goods
We are increasingly seeing brands embrace virtual goods and non-fungible tokens (NFTs), and while luxury and fashion brands are seemingly most open to this new opportunity, we’re expecting that use cases will grow dramatically and expand beyond this.
The market for digital objects could well surpass the market for physical objects in the future, and brands are starting to prepare for this environment. Nike has stepped forward and trademarked its assets for these spaces, preparing to fight against digital counterfeiting for example. Brands are also experimenting with NFTs – Budweiser led the way with a highly-successful NFT collection, selling out within the first hour. You only need to look at this year’s Super Bowl ads to see that the buzz around NFTs has been sustained in 2022 – the NFL even gave every fan who attended a customized NFT Super Bowl ticket. Even brands such as Gap and Selfridges are getting in on the NFT action.
Our trends research suggests that for consumers it’s still early days, with 43% of UK adults having actually heard of NFTs and only 25% having knowledge of them, but this does rise significantly for those early adopter audiences. For those that do have knowledge of them, there is some concern about the environmental impact of NFTs, so brands will need to tread carefully.
Despite NFTs and other virtual goods becoming such a hot topic of late, virtual assets, in-game skins and items have been a huge market for over a decade. This was first led by Valve’s online marketplace for in-game skins – but with Fortnite proving that these in-game items can now be branded, it has opened up a whole new world of possibilities for brands to gain exposure in online gaming environments.
Epic recently revealed that it profited $50m selling 3.3m NFL-branded skins in the space of just two months. And it goes beyond Fortnite – with 45% of UK early adopters having previously bought virtual things to use or wear when gaming, there is clearly big money to be made.
As brands continue to navigate virtual spaces and start to map out their metaverse strategies, it’s likely that gaming will be the first stepping stone. With the brand opportunities that esports, virtual goods and game-related collaboration present, it’s inevitable that 2022 will be the year that advertising takes gaming seriously.