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What to expect from the gaming industry in 2021

by Lewis Sherlock

January 29, 2021

While crystal ball gazing can be risky, especially during a global pandemic, it seems inevitable that gaming will continue to grow in 2021, following the industry’s rapid expansion last year. Total gaming revenue increased $15 billion over the past 12 months and user spikes that included 82% of global consumers amid lockdown 1.0.

All the above considered, estimates that the gaming industry will hit revenues of $217.9 billion by 2023 feel almost conservative. But the big question is: how will gaming’s evolution play out in the nearer future?

1. Gaming will keep evolving, and so will players

This year, we will finally say goodbye to the outdated ‘gamer’ image. Throughout 2020, there was much talk of rising gamer diversity, in the industry and among players. Increasingly varied before Covid-19 — with women accounting for 46% of gamers in 2019 — today’s player mix is even broader thanks to a wider appetite for online entertainment and distanced connection: which is good news for brands keen to achieve wider reach via gaming.

The diversification we saw in 2020 will continue in 2021, and not just because of ongoing restrictions brought about by Covid-19. Although it is likely that lockdowns will fuel fresh influxes of players, cloud gaming could also play a role in boosting user bases. Following on from Google’s Stadia, several cloud services have emerged over the past year; most notably Amazon’s Luna and Microsoft’s upcoming Project xCloud. By transferring processing burden to servers and enabling play across devices – whether that’s a console, desktop or mobile – these offerings should make gaming more accessible to even larger user groups and remove traditional barriers to entry such as the need for costly hardware.

And then there’s live streaming, especially Twitch. Streaming platforms have done much to super-size the radius of gaming, with Twitch alone breaking several records and racking up 9.3 billion hours watched. This spike in viewing has extended the joy of play beyond dedicated enthusiasts to capture casual players and those who prefer to simply see the action unfold; further accelerating gaming’s transition into the mainstream and creating a vast secondary audience that will keep growing and hold equally significant appeal for brands.

2. Brands will have to get smarter about their strategies

Commercial promotion isn’t new in gaming, but the combination of pandemic challenges and a massive uptick in user scale has prompted more brands to journey further into the virtual space. Fashion designers have discovered the power of collaborations to build awareness of new collections with Gucci, Burberry, and Paco Rabanne experimenting in the space to name a few. Companies such as KFC have joined the long list of brands to forge close player bonds by joining in with games.

In 2021, brands and businesses must focus on sharpening up their gaming strategies. That will mean not only more considered planning of activations and partnerships — particularly when it comes to choosing titles that are a good fit for their specific offering — but also thinking about how activities can genuinely enhance the user experience.

Gaming can be a highly effective advertising vehicle; providing captivating digital worlds where players are locked in, highly attentive, and inclined to respond positively to branded elements that tie in with their favourite games. But tolerance for activities that interrupt play or break immersion is also low. To win and keep gamer favour, it will be important to explore opportunities that work with games and minimise disruption, such as native in-game ads that integrate into the game’s design and appear in expected places, like billboards and ad hoardings as they would in real life.

3. Esports will prove its value, again

At Bidstack, we expected 2020 to be a strong year for esports. But the events of last year meant it hit the mainstream in a way we couldn’t have predicted. Despite the loss of real-world events and the revenue they generate, esports was well placed to manage the digital switchover and thrive. High-profile sports stars bolstered the popularity of virtual tournaments; from footballers like Marcus Rashford and Trent Alexander-Arnold competing in FIFA games, to F1 drivers such as McLaren’s Lando Norris racing on the virtual Albert Park Circuit. Such was the interest in watching live-streamed esports matchups that Twitch even created a new dedicated category to help players quickly find live events.

With the ability to pull in large online crowds, elite teams have also retained their appeal for sponsors and partners such as Puma, Kappa and Motorola, and gained increasing recognition from brands. Prime League, for instance, signed a deal with Levis’ that will include developing joint behind-the-scenes content for fans, and Gucci made another gaming appearance with an exclusive watch, featuring Fnatic’s logo.

While live sports have now returned, albeit, with a limited number of live fans, the success of esports has cemented its value. In the year ahead, we can expect to see more celebrities, musicians and sports stars exploring esports, with household brands doubling down investment and seizing the opportunity to engage with a diverse and ever-swelling audience. This is already evident from the announcement that major supermarket chains Aldi and Lidl have entered the market by partnering with esports teams.

In 2021, we’ll likely enjoy more live, in-person opportunities, but virtual events will be seen as a complementary way of reaching fans.

It’s clear that gaming and esports will remain an integral part of everyday life for many, while the attraction of highly-engaged audiences and immersive environments – that don’t suffer from the usual distractions – will keep marketing and advertising interest high. Developers, players and brands alike need to strap in. With gaming’s race to the summit still running at top speed, 2021 is going to be another wild ride.


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