The rapid and unprecedented growth of the gaming industry has taken many by surprise. Professional marketing companies with an eye on maximizing revenue for their clients are focusing their attention on a largely untapped market segment: gamers. Contrary to popular belief, gamers do not fall into a ‘financially strapped’ category of prepubescent or young adolescent males. Gaming audiences today encompass male and female players across all economic strata. The gaming market has also evolved dramatically since inception, and now includes multi-media video content, interactive gaming content, augmented reality, and virtual reality on PC, Mac, Android and iOS devices.
Gamers are avid gaming video watchers, learning to perfect their craft from the masters of gaming on dedicated YouTube channels. For advertisers, it is absolutely imperative to tap into this rich pool of customers by targeting their needs, wants and preferences. Media buyers are involved in the negotiation and purchase of audience-specific advertising space. Media buyers take multiple elements into account, notably psychographic information, geographic factors, demographic factors, pricing, and media formats that are being targeted. The advertiser will choose a form of advertising media such as a website, blog, newspaper, magazine, TV station, or radio station to transmit the marketing message.
Media buying agencies are the specialists and they conduct all the necessary analysis to ensure that the right target market receives the right message, at the right time. They are also involved in budgetary matters, and they provide detailed analysis of the target market vis-a-vis advertising campaigns. The gaming industry is dynamic. It has changed dramatically in recent years, particularly the way in which gamers approach their craft.
The erstwhile method of a gamer physically frequenting a store to purchase a game cartridge and then returning home to play it on a video game console (PlayStation, Xbox, Nintendo Wii, Game Boy etcetera) no longer accounts for the lion’s share of the gaming market. A 2017 case study published by Mark Brownlee (30 November 2017) found that, ‘… Mobile games generated $46.1 billion in revenue, or 42% of the market share…. Console games accounted for $33.5 billion in revenue or 31% of market share… PC for $29.4 billion in revenue or 27% of market share.’ Clearly, the shift to mobile is changing the way that media buyers operate in the gaming market. As we fast forward to 2018’s figures, some incredible trends become evident.
Crunching the Numbers: How Big Is the Global Gaming Industry Now?
Source: NewZoo.com 2018 Global Games Market Report
The recently published Global Games Market Report found that an estimated $137.9 billion was spent on gaming in 2018. Of that, digital games generated revenues of $125.3 billion, and comprise 91% of the gaming market. A total of 2.3 billion gamers worldwide are now active in the gaming arena, marking a 13.3% uptick over 2017’s figures, translating into growth of $16.2 billion year-on-year. Media buyers are focusing on the fastest-growing segment of the gaming population, notably mobile. Double-digit growth has taken place over the past decade, notably since the iPhone was introduced in 2007. Consider that $70.3 billion in revenues was reported in 2018, up 25.5% year-on-year. Of that, smartphones make up $56.4 billion of revenue, or 80%, and tablets make up the remaining 20%, or $13.6 billion. Console gaming which dominated in the early years, now accounts for $34.6 billion (2018 figures) and PC accounts for $32.9 billion (2018 figures).
Over time, the global games market is expected to reach $180.1 billion by 2021, with compound annual growth of 11% (2012 – 2021) mobile growth of 26.8%, PC growth of 3.1%, and console growth of 2.3%. Mobile gaming is targeting a $100 billion market within the next three years, which is surprising given that it was the smallest segment of the gaming market in 2012. Conversely, PC which largely dominated in 2012 will become the smallest of 3 segments by 2021. The paradigm shift from PC and console to mobile (iOS and Android) gaming apps is clearly where media buyers are increasingly focusing their attention.
The top 3 countries dominating the global gaming scene include the US, China, and Japan. The latter country is responsible for unprecedented growth in gaming, with 15.1% year-on-year growth, which now amounts to $19.2 billion (2018 figures). Japanese players spend more per capita on gaming than any other nation, particularly when it comes to mobile gaming, and this is also being targeted by media buyers when it comes to advertising to gamers across Asia. Japanese players spend 250% more than players in Western Europe, and 150% more than players in the US and Canada – marketers are following the money.
Follow the Money: From West to East
It is interesting to point out that the global gaming market is now dominated by Asia-Pacific, a phenomenon that has only recently become the norm. China accounts for $37.9 billion of the global gaming market, the US $30.4 billion, Canada $2.3 billion, Europe, Middle East & Africa $28.7 billion, and Latin America $5 billion. The trends clearly indicate that the mobile gaming sector is dominating the industry and advertisers are shifting their resources in this direction. Further evidence of the importance of the gaming industry is found in a 2015 survey conducted by Ipsos MediaCT. The study polled 4,803 participants across the US, from 18 – 54 years old.
Of that pool, some 2,802 participate in online gaming monthly, 2,001 go online at least monthly to watch YouTube gaming videos, and 30% of these participants are female. This is an important finding for media buyers in that it breaks the old school perception that gaming is a male dominated sector. The 2015 study also found that 33% + of gamers are older than 34 years old, and are not Millennials. Perhaps the most important finding of that in-depth study for media buyers is that gamers can be considered uber consumers who are trendsetters, with big buying potential. Consider the following Ipsos MediaCT study findings illustrated below.
The study found that YouTube gamers are able and willing to pay handsomely for entertainment products, entertainment services, and high-quality media. Clearly their buying power is being targeted by media buyers and advertisers. Of equal importance is the behavior of YouTube gamers when it comes to product recommendations with food & beverage, consumer electronics, media & entertainment.
The Think Study found that this market segment gave recommendations at least 83% of the time in these categories. This demographic is also heavily influenced by online videos, YouTube, and trusted brands. In fact, 83% of YouTube gamers want content from a brand that entertains them, appeals to their passion, and provides useful information on how to use their services and products.
Consider media buying in the online gaming industry (online gambling) with top-tier software providers like NetEnt. Given the intense competition among software providers in the online gambling market, it makes sense that media buying platforms provide the best possible behavioral insights and audience intelligence. When marketing activities are conducted, online casinos seek to engage customers with the lowest possible market spend and the highest possible market reward.
This return on investment (ROI) ensures better targeting, increased personalization of content, and enhanced audience profiling. When adverts are created in this way, regulated online casinos like 888casino can effectively reel in greater numbers of players. Industry demographics attest to enhanced profitability, engagement, and conversion when tailored promotional offers are geared towards players in the correct media channels.
Who Are the Top Vendors in The Video Gaming Market?
The dynamic nature of the video gaming industry is such that it is subject to change over time. The highly competitive market is characterized by rapid technological advances, strategic M&A, and tough competition. However, video game advertising vendors such as Flurry, BrightRoll, InMobi, Google(AdMob), and AOLs ONE dominate the scene. These companies run global operations, provide a wide range of products services, analytics, online advertising and enterprise-level products and services.
They are adept at providing expert TV advertising across multiple product ranges, buying/selling media, and helping advertisers to promote their brands and connect with consumers on PC, Mac, Android and iOS devices. The unprecedented growth in mobile gaming technology is evident with the world’s leading gaming companies, from traditional video games, MMO games, online casino games, sports betting, and beyond.
What makes the gaming industry unique is that players are actively involved in it. For advertisers, media placement and integration is essential to generate the type of CTAs needed from customers. Brands and publishers in the media world are always seeking to monetize this highly engaged audience, and for good reason. Leading industry media advertisers such as Julie Shumaker of Unity Technologies IAB routinely assess the market for choosing the most appropriate, and converting ads for gamers.
Given that gamers have high awareness, advertisers must promote content that resonates with the audience in the best possible way. All the analysis points to mobile as the most effective channel for targeting media messages. Increased brand awareness, higher levels of engagement, and improved conversion rates are heavily targeted in the mobile segment of the gaming market.