This guide on online gaming marketing was created by Wyatt Duthie, a Marketing student at the University of Montana who likes to party.
Go back to your nostalgic teenage years and think about what you were doing as a sixteen-year-old kid during the summer months. You probably were enjoying the great outdoors, working your first job to save up for your first car, hanging out with friends, involved in organized sports or maybe even playing video games. No matter how glorious your sixteen-year-old summer was it won’t compare to Kyle Giersdorf’s. This American teenager competed in a tournament for a popular online video game against 100 other gamers of all backgrounds and ages. Giersdorf won the sweet jackpot prize of 3 million dollars and bragging rights of the coolest sixteen-year-old summer ever.
The question to ask is not how this sixteen-year-old won three million dollars in the summer, that can be simply answered by, playing countless hours of a video game. The real question to ask is why even is three million dollars wagered in the first place. Well according to a CNBC news report “global revenues from esports, or professional video game competitions, will hit $1.1 billion in 2019, up 27 percent since last year, thanks to ballooning revenues from advertising, sponsorship and media rights.” That’s just the competitive, esports sector of the industry, it’s not including the average everyday gamer. Those statistics are even more astonishing, the same CNBC news reported: “Overall, the global video and electronic games market, excluding revenues from esports, will generate $152.1 billion in 2019, up 9.6% over last year.” While these statistics are already enormous, the overall growth of the industry is projected to continue to grow. The CNBC News report where you can read more about Kyle Giersdorf and those statistics previously stated.
So Just What Is Online Gaming?
Before we dive into the industry it is advisable to take a step back and look at the industry as a whole. The term “video game” can range from a simple game of Solitaire on your phone to a massive online multiplayer game with whole virtual universes, where users interact with other players from across the globe. Video games are played on computers and laptops, handheld devices, game consoles (Xbox, PlayStation, and Nintendo) and cell phones. Some games are purchased and installed on devices, others are downloaded from the internet, and some are played exclusively online. Video games are popular at all ages. Some games are educational while others are horrifically violent. There is a video game for just about anything, from the innocent Farm Simulator franchise to the incredibly violent Grand Theft Auto franchise.
Recently, there has been a shift in the tides from playing video games to watching someone else play them. Last year, “League of Legends” World Championship finals had more viewership than the Super Bowl. Yes, more people watched a video game tournament then the super bowl. The tournament had 100 million unique viewers tuned in to the event online compared to last year’s 98 million super bowl viewers tuned into television. While streaming gamers game on the internet is most popular. Viewers can attend these competitions live and in person. The League of Legends world finals in 2017, held in Beijing’s Olympic stadium, sold out to a crowd of 40,000, the total number of seats made available for the game that day. While esport competitions have been long popular in Asia, the North American League of Legends Championship held in St. Louis, Missouri this year had a 10,000-member live audience watching gamers game. More on these competitive esports statistics can be found on CNBC News.
Some streamers can stream full time, that is they can sustain the lifestyles they want without having to have a real job. They can live off of what they make from competitions and streaming. While competitions of esports bring in the most viewership of esports you can watch people just play games for fun on these live streams as well. Sometimes the esport gamers call this their “practice.” These practice periods can be just as lucrative if not more lucrative than competing in an esports tournament. Tyler “Ninja” Blevins the LeBron James or Tom Brady if you will, of the streaming community rakes in $500,000 a month in streaming revenue. Though the popularity and pay of gamers like “Ninja” are rare and the industry is new you can’t help but take note of how much he makes playing a video game all day. Streamers are also able to bring in additional sources of income through advertisements and sponsorship deals. These streamers are becoming more and more like celebrities and athletes every day. Ninja made the cover of the September 18, 2018, ESPN magazine issue. He also has over 15 million Instagram followers and has lived streamed with professional athletes and celebrities such as Drake, Travis Scott and even NFL star JuJu Smith-Schuster. Ninja even booked a sponsorship deal with Adidas apparel. He has an estimated net worth of 15 million dollars. For more information on “Ninja” and other top streamers visit Business Insider.
There are many places to watch gamers stream their games live. The largest streaming hubs to watch people game are YouTube, Twitch, and Mixer. These streams have also infiltrated social media platforms and can be found live or in clips on Facebook, Instagram and Twitter. If you are interested in checking out the different types of streaming platforms visit “10 Best Live Streaming Platforms for Game Enthusiasts.”
Who Does Online Gaming?
The stereotype of young males dominating the video game world is true, however not but as much as you would think. Roughly about 72% of men ages 18 to 29 play video games, compared with 49% of women in the same age range. Video games are most popular among teenagers and young adults. An astonishing 97% of teen boys play video games on some kind of device, compared with 83% of girls. While 60% of Americans ages 18 to 29 and 53% of those ages 30 to 49 say they play video games often or sometimes, compared to roughly 25% of Americans ages 65 and older saying they play video games at least sometimes. The survey counts video games played on a computer, TV, game console or portable device, such as a mobile phone. It is also worth mentioning that the types of games being played vary on demographics, for example, it was found that puzzle games are more popular with women than with men: 72% of video-game-playing women say they play these, compared with 52% of video-game-playing men. For more information on the demographics of the online video game industry see the PewResearch.Org study.
Various published video game industry forecasts project the industry’s value could reach $300 Billion by 2025. The compounded annual growth rate for the industry that they used was to project this gigantic value was 12%. With many new technologies and emerging markets, this seems reasonable. A new technology that will help build this growth is the collision of blockchain technology and gaming. This will decentralize asset exchanges, verify the scarcity of virtual objects and collectibles, create fast and secure payment networks, and establish the ability for developers to properly monetize their creations. The rise in availability of the internet to new foreign markets especially, on the Asian continent is another new technology that will catapult the industry to new highs. Lastly, the gaming industry is growing with the increasing per capita income along with the growing interest in the industry. Therefore the increasing disposable income leads to an increase in usage in smartphones, personal computers, and consoles. Making access to the online gaming industry easier than ever.
Online gaming has evolved over the past decades. It includes console gaming (Xbox, PlayStation, and Nintendo) social gaming/mobile gaming, and pc gaming. Social gaming is tightly bound with mobile gaming, as the majority of social games are developed in the form of apps for iOS and Android devices. The number of online console gamers is expected to grow to over 57 million by 2020 and the market for PC online games alone is projected to reach a value of around 33.6 billion U.S. dollars by the end of this year. Lastly, the dark horse to look out for in the online gaming industry is the rise in virtual reality as new technologies are created it is expected to become a major cornerstone piece of the online gaming industry; next year alone it is projected that players will spend $4.5 billion on immersive virtual reality gaming.
Streaming Viewership Growth
The streaming sector of the online gaming industry is projected massive growth as well. The eSports sector has grown in recent years with many more viewers tuning in to watch their favorite games being played by the best gamers in the world. By 2022, there are expected to be almost 300 million frequent viewers of eSports worldwide, a vast increase from 58 million in 2012. Additionally, some 347 million people are forecast to be occasional viewers of eSports by 2022.
In conclusion, the online gaming industry as a whole is a booming business with a lot of promise for growth over the next five years. If you are compelled to dive deeper into the online gaming industry growth predictions, these reports are a great starting place.
Mordor Intelligence- “Gaming Industry”
Within any rapidly growing industry, there will be challenges that roadblock its growth. The online gaming industry is no different. Online gaming is linked to cyberbullying, cheating, addictive behavior, meeting grounds for children and strangers on the internet, unhealthy lifestyles, and increased aggressive or violent behavior.
The anonymity of players and the use of avatars allow users to create alter-egos or fictional versions of themselves, which is part of the fun of gaming. But it also allows users to harass, bully, and sometimes gang up on other players, sending or posting negative or hurtful messages and using the game as a tool of harassment. If someone is not performing well, other children may curse or make negative remarks that turn into bullying, or they might exclude the person from playing together. Since players are anonymous, they cannot necessarily be held accountable for their behavior, and their harassment can cause some players to leave games. Some anonymous users use the game as a means to harass strangers or to get their personal information, like user names and passwords. The United States government published a resource for more information on how cyberbullying is tied to online gaming.
A new dangerous form of cyberbullying that affects live streamers particularly is a practice called “swatting.” Essentially someone watching the live stream calls the live streamers local sheriff department anonymously and says that the live streamer is doing something illegal for example, holding somebody hostage. Then the police will go to the live streamers home usually in a tactical unit and by force, hints the word swat just to find out it was a prank. This is a dangerous waste of time for the police and live streamers that could lead to something bad.
“Of the online gamers, only 12% have never had their multiplayer gaming experience negatively impacted by other players cheating. In other words, about 9 in 10 players have had a negative experience because of cheaters.” Cheating can ruin a game for the consumer and ultimately affects the creators of the game. Perhaps what drives online gamers to cheat is the idea that the digital world is not real. The same thinking that drives many to consume pirated content, thinking they are just innocently watching content for free, yet they are hurting real people including emerging artists. A viral effect occurs and soon the losing player realizes he or she must cheat to beat the cheater. That’s when you got a problem on your hands and many people either stop playing or try and out cheat the cheaters. For more information on cheating in the online gaming industry visit Forbes.
For the most part, online gaming is a harmless hobby that gamers use to blow off steam or escape reality however, in recent years there has been an increase in excessive gaming. In 2013 the disorder was included in the “Diagnostic and Statistical Manual of Mental Disorders.” Excessive gaming may lead to avoiding negative moods and neglecting ‘normal’ relationships, school or work-related duties, and even basic physical needs. The DSM states that an “essential feature” of this disorder is having a “persistent and recurrent participation in computer gaming for typically 8 to 10 hours or more per day and at least 30 hours per week.” This resource is full of more information about excessive gaming.
A Virtual Playground
You probably wouldn’t leave your child unattended in a foreign location for hours on end. The internet is no different. Your child could be playing with kids their age that live in Sweden or they could be playing with a sexual predator that lives in the next town over. You just don’t know that is the scary part of online gaming. Predators prey where kids play, it is no surprise that online games are the new frontier for sexual predators. They use online gaming to connect with children and groom and target their next victim. That is why it is important to make sure your child doesn’t share any personal information. This article and video explain the dangers of mixing online gaming and children.
Promoting Unhealthy Habits
It is nice for kids to have role models, but the esports superstars they look up to, might not have the best influence on a child. Sitting in a gaming chair streaming all day and getting little exercise is not a healthy life habit to promote, yet that is what the esports superstars are doing while they stream. Studies have shown that playing certain video games can improve hand-eye coordination, problem-solving skills, and the mind’s ability to process information. But too much video game playing and watching may cause long term problems. It’s hard to get enough active play and exercise if you’re always inside playing or watching video games. This lack of exercise can lead kids to become overweight. Overdoing video games also could affect other important stuff, like friendships and how well a kid does in school. And kids who play violent video games might act more aggressively. For more information on this go here.
One of the biggest challenges facing the online gaming industry is how violent games are linked to increased aggressive behavior. While it is still being studied and hard to research, there have been previous studies that suggest “violent video games are significantly associated with: increased aggressive behavior, thoughts, and affect; increased physiological arousal; and decreased prosocial (helping) behavior. Average effect sizes for experimental studies (which help establish causality) and correlational studies (which allow examination of serious violent behavior) appear comparable” (Anderson & Bushman, 2001). For more information visit the American Psychology Association.
While video games are linked to aggressive and violent behavior in children there is a rating system in play to help the parents decide if it is a game they want to let their child play. The Entertainment Software Rating Board (ESRB) evaluates video and computer games and provides a rating system similar to film ratings. These ESRB ratings have two components: 1) Symbols that suggest appropriate ages for players, and 2) descriptors to help parents understand what elements factored into the rating score. While this system is in play, it is not very efficient when it comes to free online video games or to parents who don’t look at what they are purchasing for their children. For more information on this rating system and how parents should govern video games, this is an awesome guide.
Since online gaming is a massive and fairly new industry it is filled with opportunities to capitalize on. The marketing opportunities that are already being capitalized on are mostly in the realm of live streams however, some marketing operations stem from online gaming as a whole too. The opportunities within the realm of live streams are mostly sponsorships. Whether it is sponsoring a player, a tournament or even a whole team of live stream gamers. Another opportunity within the live streamer realm is that streamers can also run advertisements during their live streams intermissions. These can include full-on commercial advertisements, pop up ads or even just a simple banner ad. The last opportunity that is just starting to take off in the streaming realm is the exclusive partnership of a product or promotion of a product with a specific player or team. The online gaming industry as a whole has seized these opportunities as well such as the Fortnite video game. You haven’t been around kids in the last year or so if you haven’t of at least heard of this game before. Fornite did an excellent job of teaming up and collaborating with products in real-life and inside its gameplay. Such products include Nerf, Marvel, The NFL, Monopoly, and even the movie John Wick. Fortnite also rose to popularity by incorporating culture into its game through dance moves/trends, such as the “Carlton, Milly Rock, and the Floss.” Another opportunity being seized for marketing is the free app games on mobile devices, where you can run advertisements on the free version of a game by paying the app developers. The last opportunity being seized by the online gaming industry as a whole is the implementation of tournament sponsorships.
Unseized Opportunities With in Online Gaming
Major marketing opportunities that aren’t being seized to their maximum potential yet are tournament/media naming rights and the creation of a game itself. If the League of Legends World Tournament had more viewers than the super bowl then marketing would have a similar if not more value than doing a super bowl advertisement. While the super bowl has the Pepsi, halftime show maybe the League of Legends World Tournament could have something similar or even naming rights such as “The Pepsi League of Legends World Tournament.” The beauty in online gaming is that there are so many different new games and tournaments. That you could even create a tournament for a new game that just came out and throw your brand name on every part of it. You could even create a game. Start with something simple such as a mobile app and then scale it up to size. For example, Les Schwab could create a car racing game where the roads are full of potholes and obstacles and you have to finish the race to win. In conclusion, there are many opportunities to market products and services in the online gaming industry. Three resources that highlight the marketing potential within the online gaming industry.