The Video media industry is declining in value for a decade. In stark contrast, the video gaming industry is growing at a rate of 15 to 25 percent annually.
How the Gaming Entertainment will Dominate and Its Importance in Web
Why are big media content companies spending an unprecedented amount of cash on increasing their exposure to the video industry? You have Disney, Netflix, Amazon, HBO, and others spending millions on acquiring new properties and creating new streamable media. Honestly, we find it a little absurd. Truth be told, the difference between investment and potential growth in the video gaming industry is massive. Video gaming has a very bright future. Below are some of the questions that explain why the future of video games is therefore immense.
• What it competes against
• How it’s being packaged these days?
• Why it’s so scalable?
• What people play today (and in the future)?
• What makes it so engaging?
• What is its growth potential?
• Why are video games comic books of this generation?
The dominant attention medium, television, has peaked, and its time is being redistributed
The idea of leisure vs. work took hold in the early 19th century. Most economists at that time believed human beings could do only two things with their time. First, generate some income by working their hours. Second, spend that income on getting some leisure time – literally or with their opportunity cost).
This classification covered everything, from reading a book, going to a movie theatre, spending time with your partner, or getting some sleep. These leisure activities didn’t often clash with each other for various reasons. Before electricity, the solar cycle defined our activities. You couldn’t read till late at night, there were no night theatres, you woke up when the sun rose in the east.
Broadly speaking, there were very few entertainment alternatives. For instance, there used to be daily newspapers only. You could pick them up either by hand or get them delivered only once a day. Similarly, books were text only. Reading them took considerable effort on your part. Likewise, radio was only available through the radio box. It used to be live and audio-only. Last but not least, socializing with others wasn’t for everyone. It required prior planning. It also had a much higher logistic cost. Moving to other towns and cities had its own set of limitations.
So, when TV arrived, it changed the entire entertainment landscape. It offered lots of content to choose from. No wonder, then, it became a dominant entertainment medium. In 2010, 9 out of 10 US households paid more than $50 a month for their pay-TV connection. Besides, 280M Americans, on average, were spending more than 5 hours every day consuming TV. As a result, TV became the highest revenue-generating entertainment medium in the category.
That was the peak of TV. Depending on how TV media companies transition to digital media, anyone can see it will be hard for the TV (or Video) to maintain the same revenue generation level. Today, the competition for leisure time has gotten much severe. There are TikTok, Facebook, and Fortnite, ready to take a bite from the leisure time. While this doesn’t mean Video time will fall below 3 hours a day level, it merely means keeping the 5+ hours a day level will become a farcry to achieve.
In the past, whenever leisure took preference overwork, people turned to TV or video. Today, the question is not “what to watch?” but rather, “whether to watch?” And the answer is overwhelming No, I’d instead play a video game.
1. Gaming is replicating the TV package
TV has been successful not because of the lack of competition alone. In essence, it offers several advantages that add to its mass appeal and maximize its penetration. Sure, it has its own flaws, and over time its value is declining, but pay-TV still maintains some of its perks. For example, it offers
• A plethora of content both in volume as well as a variety
• Ease of access. TV is everywhere. Its content is accessible all over the world. It is instantly viewable. You can go to a bar, another state, another country, or your best friend’s mom’s house and resume your regular program
• Frictionless content sampling as you stumble upon new things every once in a while simply while surfing channels during the commercial breaks.
• Content tailored to different users. Some of the content informs while others entertain, educate, or just tap into primitive human tribalism, etc.
• Content that requires different engagement levels. Some of the content requires you to lean in, focus, and get immersed. On the other hand, there’s content that you can just watch leaning back or just watch in the background while doing something else entirely.
A fierce competition that kept on increasing TV’s overall value thanks to various innovations in format variety.
Domination of pop culture. TV achieved a sort of cultural tipping point. When enough people watched a particular TV program, it became a sort of drawing-room discussion that dominated that era’s pop culture. Thus it forced others to watch it just to participate in the discussions. This is very similar to the case of social smokers, people who smoke only when they are with others who smoke.
Now, it’s pretty interesting to note that all of these elements of traditional TV are being replicated very efficiently by the video gaming industry. Such as:
Ease of access: With cloud gaming, you can take your game anywhere you want. No need for updates before you can start enjoying your game. Besides, newer consoles allow gamers to auto-resume their games (when playing against another player)
Content Discovery: With subscriptions like Sony’s PlayStation, Microsoft’s Game Pass, and Apple’s Arcade, you get highly valued games along with a massive catalog of other titles that you wouldn’t have discovered otherwise. This has increased their overall playtime.
Fierce Competition: Alongside Nintendo, Sony, and Microsoft, new players have entered the gaming ecosystem. Apple and Google are already outperforming the triumvirate, and Amazon will soon enter the space. All of this will increase competition to unprecedented levels.
3. Gaming has unprecedented content leverage
Most of the media faces three primary challenges. The first and foremost is their finite content length. At some point in time, the user reaches the end – whether it’s the last page of a fantastic book, the last episode of a podcast, or the last episode of a beloved TV series. Sure, you can re-read, re-listen, and re-watch, but few do so. Those who do rarely consume it a third or fourth time. It’s just not the same as consuming media the first time. They need another book, another podcast, and another tv series to sink their teeth in. But the thing is, this new content needs to have an equivalent level of investment like the previous book, podcast, or tv series. Otherwise, they won’t bother giving it a try. This solves no real problem. Elongating content merely to maintain engagement erodes the overall content quality.
Moreover, While traditional content can stimulate consumer imagination, it cannot make them participate – leave aside the notion of leveraging it. Star Wars, for instance, has thousands of hours of stories. People can act it out only in basements or backyards. Yes, they are fun for a while, but independent imaginers and storytellers couldn’t really share it with other people.
Video gaming is totally different.
Video games are designed with stories outside the main narrative – avatars, badges, side quests, and more. This achieves significant leverage over their investment (stories, items, characters, etc.). At the same time, it’s optional. Therefore only real enthusiasts who are fine with more playtime can complete them. Thus, these extras do not dilute the gaming experience in the same way a 6 hour TV series stretched over 10 hours of content can. To give you an example, Red Dead Redemption 2‘s main storyline can be finished in 47 hours. However, if you complete the core extras, it stretches to 76 hours. And if you want to complete every single side quest, it maxes out at 161 hours.
Broadly speaking, video games are driven by the social experiences they provide. A gamer isn’t just playing to finish a story. They are playing because they love the competitiveness of a storyline – especially with their friends. And because no multiplayer game session is the same, there’s always a new story. The experience only ends when gamers get bored of playing the game. Video games also leverage user obsessiveness to generate more content. For example, the Multiplayer Online Battle Arena of League of Legends was basically just a user mod of Warcraft 3.
4. Social signals, effects, and reinforcement
It comes as no surprise that successful media – just like successful content – are socially driven. They thrive on social pressure, also known as the watercooler effect. It essentially means that you have to consume a particular media to be an active participant in the culture. We see it pan out every once in a while – be it Lost, Game of Thrones, or Survivor. Besides, many experiences of content become better when others are enjoying it too alongside you. Game of Thrones is more fun because you can gossip with friends about whether that plot twist with Khaleesi in the final season was earned or not.
Video games have become a fundamentally social medium for entertainment. The content is based on what your friends are doing and their level of participation. PUBG becomes more fun when more people game. When more people are gaming, the fun, and excitement of gaming multiplies. The value of being good at a particular game increases.
We also see the same elements play out in games like Fortnite, COD, and Overwatch. Out of all these, Fortnite has the greatest clout. Suppose your friend’s circle has 10 people, where 3 love Fortnite, 3 prefer PUBG, 3 want COD, and one prefers Overwatch, all of them end up playing Fortnite. And in case you are an 11th person who doesn’t like video games, you will have no choice but to become a gamer. While the same applies to other media (like TV shows), this effect is the strongest with video games. You can be the only friend in the circle who watches Game of Thrones. At most, you will miss out on school gossip. However, if you are not video gaming, you are likely missing out on your friends who are socializing without you.
For a long, the mobile phone has been an exception to social video gaming. Yet, it is also slowly becoming a part of the multiplayer trend. It’s also becoming a part of the always-on social-driven gaming experience. Mobile video games, today, are embracing the functionality, intricacy, and engagement of the PC and Console based games. This is due to the improvements in the field of mobile phone technology and access to fast internet connections. Just 5 years ago, it was difficult to imagine millions of people log onto their Fortnite profiles every now and then via their smartphones, let alone play it together.
5. Tightest feedback loops and culture
Consider modern Hollywood. Every big media production company wants its own direct-to-consumer platform. They want to build consumer relationships to collect their user data in order to improve their service. The video gaming industry has been doing it for years.
Broadly speaking, you need to consider the objectives and design principles of video gaming vs. TV (or, say, music, print, etc.).Video games are built and trained around being fun and enjoyable. Their objective is less about art or vision and more about crafting an engaging environment. One that consistently sucks them back in, and a gamer never wants to leave. So, video gaming is about the player and not the storyteller.
Now, “living game” supercharge this dynamic even further. In such games, the story or content is regularly updated to maintain, grow and further optimize player engagement. Fortnite, for instance, gets updates on a weekly basis. It also goes through a dozen major overhauls every year to keep the content fresh. Each new addition pays close attention to metrics like average playtime a week, gameplay measures, gameplay stats, player engagement, player skillset, and relationships. Everything is monitored to make sure an average player gets the most out of their video gaming experience. In case a new update causes a distortion in player metrics, it is rapidly patched to correct the course. Therefore, gaming is an outcome-oriented medium of entertainment.
Sure, this orientation sometimes limits artistic potential. The potency of engagement optimization is beyond any debate. Even Facebook, Twitter, and Youtube fare better at winning this “user attention” than Hollywood. If anything in Hollywood can compete for video gaming, it’s Disney’s parks division. Disneyland maintains its mass appeal through its insane infrastructure intended to ensure suspension of disbelief. It monetizes via a mix of exorbitant entry fees and inescapable micro-transactions such as merchandise.
The open mind culture prevalent in the video gaming industry also enables the general ecosystem. Large AAA titles like GTA, Fortnite, Counter-Strike, DOTA, League of Legends, etc., are exceptionally liberal when it comes to tolerating third parties to access their in-game APIs for creating complementary experiences. Sometimes this includes various apps created to improve a gamer’s skillset by pulling from their real-time performance data. This is structurally impossible with other types of media. Plus, this mindset is also pretty unique. Hollywood keeps their proprietary media under strict lock and key. They control every aspect of their IP and rarely allow anyone to experiment and create new experiences with it.
6. Consistent growth through new devices, categories, technologies, content
Media, in general, is a product of technology, content, and business models. Video gaming has always been more reliant on technology than other media. From rendering a live image to decision/outcome analysis and collection of local inputs, nearly every aspect of consumer experience requires a local processor. Even when you consider online video games, controller inputs are processed locally. Algos are applied soon after. Some text, music, and video use technology before content creation these days, but processing/reading comes much later in the mix. For instance, CD Players involved processors in music. However, their role (content selection & presentation) was very limited.
This reliance on technology leads to several interrelated consequences. Firstly, gaming becomes more influenced by any changes in technology than other media types. To put it in simple words, content and business model flows better from technology to technology. Secondly, its reliance on computers/tech has led to more significant changes than any other media type. Thirdly, it’s also the only media held back by technology’s limitations more than any other.
This has produced a very exciting outcome as well. Changes in technology drive massive growth. In other categories, new formats/devices have replaced the old ones (CDs replacing cassettes, DVDs replacing VHS, cable replacing broadcast, and then on-demand OTT TV replacing cable, etc.). In contrast, growth has piled up on top of one another in video gaming. Each new discovery has led to the creation of new types of content. A major shift in gaming occurred when people moved from arcades to consoles. However, it meant users can now save and pause their games mid-way through the session. This allowed the emergence of narrative stories. When the same video games went online, these stories turned into multiplayer experiences – sessions that never end, thanks to constant updates and patches.
As video gaming flexes its muscles and expands into new devices/form factors, new content experiences are being produced. For instance, now there are video games that are created exclusively for streamers who can then play for their audience’s delight. New monetization models are constantly being unlocked, for example, subscriptions-based gameplay, cloud gaming, audience microtransactions to support their favorite player, etc.). We should see significant growth in the video gaming category, as we have seen for decades. However, this time, expect even better results – due to sustained growth – than any other entertainment medium.
7. IP kiln
It’s not surprising that comic books have turned out to be an exceptional resource of IP today. For several decades, this category produced so much content. Writers like Jack Kirby and Stan Lee used to create a new character every week. Because of the media dynamics, only characters that resonated with their audiences survived. Even then, writers kept remixing them via different devices (such as killing them and reviving them in a different era with a different personality/power set). Marvel currently owns approximately 6000+ characters. None of them have any value except a few that are worth billions (e.g., Spiderman). Likewise, producers such as Kevin Feige can look across these stories (sometimes a rehash of the same old story), cherry-pick popular ones, test, and then learn from their mistakes.
Marvel’s Civil War comic storyline, for example, wasn’t well-received, though it gains considerable popularity. So Marvel Studios adapted it for the film. They kept the central premise of a divide among heroes but plotted it differently with different characters. Marvel’s Cinematic Universe is nothing but the best of the 8 decades of Marvel’s comics. It became popular because it was backed by a simple truth: comic books spent decades at the forefront of children’s imagination. Some of which incorporated imagining how they would adapt a particular storyline/character to the big screen if given a chance.
Today, the video gaming industry is at the same stage as comic books were in their golden (1938 to 56) and silver (1956 to 70) age. These were the eras that created characters, families, worlds, and entire storylines that dominate the box office. Just like comics, gaming is producing an insane amount of content. Sure some of it is terrible, repetitive, and uninspiring, but a good one rises to the top through the same content. Due to a shift to Live, online, and DLC, today’s video games are evaluated and improved on the basis of audience response much faster than ever.
Audience attachment with video games is also without any parallel. You don’t hear about the Star Wars addiction or Superhero Movie obsession, do you? On the other hand, the Chinese government limits minors to only 2 hours of gameplay every day. Games are also more effective when it comes to “suspension of disbelief.” Stack up a John Wick fan against an Uncharted fan. It will become instantly clear which entertainment medium gets greater immersion. Video games such as Super Mario Bros and the Legend of Zelda are in their fourth decade, Warcraft in its third, creating lasting & highly valued IPs.
Game, set, match
Ultimately, the future of gaming is bright because it is at the cross-section of all of the aforesaid elements. For decades, video gaming has been evolving and maturing into an all-encompassing entertainment medium. It is a hobby and obsession for millions of people who constantly experience, watch, read, write and talk about with their clout. Therefore the importance of gaming entertainment is evident.
While this isn’t unique with video gaming, its ecosystem is starting to meet its potential – from products to packaging and diversity. Likewise, the number of players and the average time a player spends on a game are rapidly increasing.
Major gaming giants such as Sony and Microsoft failed miserably to overcome the Video/TV industry in the past. They are now creating unique video games centric ecosystems. These ecosystems contain gameplays with highlights, commentary, live viewing (like twitch) – just like sports. These all-encompassing ecosystems are complete packages that can reach every person with any experience in every possible way; TV has proved this package can be incredibly powerful and video gaming is on the path to replicate that success. In fact, it has all the tools to overtake that success.