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Why advertisers must look to gaming as we emerge from the pandemic
May 24, 2021
Today, gaming is the fastest growing form of entertainment and is bigger than both the film and music industries combined.
There are currently 3.1BN gamers from all walks of life, playing across various devices, including mobile, PC, and console. Last year time spent on video games increased significantly across the globe, with consumers’ playing time up 14% to an average of eight-and-a-half hours per week.
So, how did we get here? What’s driving this unstoppable momentum? And what opportunities does this growth offer to advertisers?
Ushering in a new generation
Some of this momentum is attributed to Sony and Microsoft’s next-gen consoles, which went on sale six months ago, while much of the world was still under strict lockdown restrictions.
Sony recently announced that the PlayStation 5 had become the fastest-selling video game console in history, having sold 7.8 million units as of the end of March 2021. Although Microsoft does not publish unit sales figures, they also recently announced they’d seen a tremendous uptake of their new consoles, with gaming revenue up 50% year over year.
This success is not only great news for Microsoft and Sony, but for the gaming industry as a whole, as the consoles open up the possibility to engage gamers in new, exciting, and innovative ways.
Many game developers are already taking full advantage of the new features. In response to this, Epic Games announced the release of Unreal Engine 5, built to make the work of developers and artists easier while introducing new functionality for AAA games.
New titles have also contributed to the growth of popularity in gaming over the past year, including Doom: Eternal, Animal Crossing: New Horizons, The Last Of Us Part II, and Assassin’s Creed: Valhalla, all generating record numbers of new players.
Ellie - the focal character of the hugely popular The Last of Us 2 that sparked many social debates. Credit: Sony Interactive Entertainment
Several new mobile games also pulled in record numbers last year, including the free-to-play RPG Genshin Impact. Before its release, the RPG had over 20 million people pre-registered for the game. It was downloaded 17 million times in its first week and made $60 million on mobile devices, making it one of the most successful mobile games.
What does this mean for advertisers?
Gaming has never been more popular, with new platforms and titles bringing in even more players, which means even more eyeballs for advertisers to get in front of. This audience is also incredibly diverse, made up of people of all ages and genders.
The arrival of more advanced games and consoles also means advertisers can reach players through more sophisticated and better-looking ads that complement the gameplay without taking anything away from the experience. AAA games are now becoming so realistic that they are often just as good, if not better looking than many films and TV shows. This presents advertisers with the opportunity to place their ads in these premium environments for a fraction of what it would cost them to advertise during a big-budget film or show.
Gaming also gives advertisers a platform to make their wildest dreams come true. They can take over a train station, brand an entire plane, or sponsor a world-class sports team for a fraction of what it would cost them in the real world, but still allowing them to get their campaigns in front of huge audiences.
The sky’s the limit
Cloud gaming is a revolutionary technology that allows users to stream and play their favorite games directly from the cloud instead of a gaming device or specific hardware. With the option to ‘play anywhere,’ gamers are no longer constrained to one device and have begun playing across multiple platforms, both at home and on the go.
The arrival of cloud gaming has blown the gaming industry-wide open and is expected to gain momentum very fast. According to Statista, last year, the market was valued at $0.58BN, and by 2023 it’s expected to reach $4.8BN.
Recently, Xbox has focused much of its marketing efforts on its Game Pass, which allows gamers to stream popular titles like GTA 5, Forza Horizon 4, and Skyrim to their phones and tablets. Google launched their cloud gaming platform Stadia at the end of 2019, which has gained a lot of momentum over the past year, and Amazon recently announced they will soon launch Luna, their cloud gaming platform, which is currently in beta in the US.
What does this mean for advertisers?
Previously, in-game advertising was limited and expensive as ads had to be hardcoded into games during the development process. This also meant if an ad campaign or brand changed, it was impossible to rework the artwork.
With the arrival of cloud gaming and more games than ever now connected to the internet, ads can be tracked, scaled, and delivered to gamers programmatically in real-time. This makes them more accessible to brands and agencies and allows them to target gamers of all types, at different times of the day, across every corner of the globe.
The global pandemic has also helped the gaming industry gain tremendous momentum, with people turning to gaming to pass the time during prolonged lockdown periods. Last year, video-game internet traffic in America rose by 75% within a week in March as several states began going into lockdown.
Minecraft Dungeons - hours of fun for locked-down families. Credit: Xbox Game Studios
Gaming also served as a great outlet for friends and family to connect when it wasn’t possible to see each other in person. Longstanding multiplayer games like Fortnite, Minecraft, and Roblox saw a flurry of new players arrive. Newer games that you could play with family and friends like Animal Crossing: New Horizons and Call Of Duty: Warzone also saw massive fan bases emerge overnight. One of the biggest lockdown success stories came from the mobile game Among Us!, which, by November 2020, had 500 million monthly active players.
What does this mean for advertisers?
Although gaming had been gaining momentum long before the pandemic hit, many brands and agencies had not considered it a key channel when planning their ad budgets. The past year has helped to change that and has allowed gaming to become an essential revenue stream for many advertisers, especially as linear TV fails to attract younger audiences and social media channels become more saturated.
As we begin to emerge from lockdown, it’s clear that gaming isn’t going anywhere, and lockdown gamers are here to stay. According to a report from Newzoo, this year, the gaming industry is forecast to shrink slightly due to the world opening back up. However, forecasts for 2021 are still way beyond what was predicted, and the industry is still expected to grow by 7.2% from 2019 to 2023.
With new cloud game players like Amazon and Google entering the market, gamers across the globe desperately trying to get their hands on a new PlayStation or Xbox, which have sold out in most countries, and cross-device play making gaming more accessible, this channel is going to become even more essential to advertisers seeking to connect with audiences in meaningful and innovative ways.