The worldwide video game industry has hit a growth spurt in recent years, with revenues coming in higher and at a faster rate than predicted. Alongside this growth, significant changes are afoot, many of which will reshape how consumers interact with games in the coming years.
Financial investors are paying increasing attention to the space, and at the end of 2018, Newzoo reported that the global gaming spend reached $134.9 billion. There are a variety of factors contributing to this growth, including emerging disruptive technology, fundamental changes in how developers are monetizing their games and how a new wave of consumers is engaging with them. Many experts also attribute the industry’s promising long-term outlook to the popularity of mobile games, the fact that video games can be less expensive to consume than movies and cable, and that consumers are increasingly open to spending money via small, frequent in-game purchases.
Consumer behavior will continue to drive change and developer innovation. With 2020 just around the corner, industry insiders anticipate several key areas to evolve between now and then.
Decreased dependence on app stores
Fortnite is the prime example of how successful a game can be even without participation in the major marketplaces. The game’s ability to reach the mainstream without the app stores has saved it an estimated $50 million in fees. More and more game developers – tired of sharing a significant cut of their revenues with the tech giants – are looking to Fortnite as a case study for how to transition away from app store sales. Success in this endeavor in turn will free up more money for developers to invest in creating new experiences, and give gamers more options for how they access, purchase and play games.
Google’s recent announcement of its new streaming service, Stadia, demonstrates how even the industry leaders are looking for ways to shift away from app stores, and eventually apps in general. Streaming services will allow players to access the same content across devices, drastically decreasing the need to download individual apps to play games or own expensive consoles. This will free the world from constant app updates, while allowing developers to maintain an “always up-to-date” service, leading to a much simpler interface for playing games.
Blockchain technology offers another potential solution for enabling a more open game marketplace. Because blockchain is inherently transparent and accessible to all, a blockchain-based system could provide every developer a stake in the ground, which may ultimately democratize games and remedy today’s over-dependence on app stores. Achieving this at scale will be complicated, but for now, indie developers can actively explore how blockchain and partnership with other indie developers may help them break free of the traditional distribution model.
Beyond transforming the game marketplaces, streaming gives developers the tools they need to create a seamless cross-device experience. The infrastructure behind it gives developers the flexibility to provide the same experience across any device, so players can pick up where they left off in any game, from anywhere, at any time. Soon, swapping between devices or sharing game updates with other players in real-time will be the new normal in game connectivity.
Blockchain also has the potential to impact in-game experiences and increase connectivity between digital worlds. For starters, players will increasingly be given the option to use cryptocurrency to make in-game purchases. This is already happening in many popular games today and will continue to evolve into models in which players can use, store and transfer their crypto-items across multiple games. The ability for a user to connect his/her digital worlds in this way will create countless opportunities for developers to increase engagement, draw larger audiences and reinforce player loyalty.
Better delivery of personalized experiences
The most successful, sticky games are the ones that give players a feeling that their experience is personal in some way. Nir Eyal’s book Hooked: How to Build Habit-Forming Products, explains in detail how developers can better understand user habits and behavior to build products that will resonate with target audiences over the long term. Eyal’s model is gaining momentum, alongside other schools of thought rooted in leveraging customer input and human behavioral psychology to drive superior customer experience. As game developers become more adept at understanding what players want and need, we’ll see increased personalization and variety in games.
Already becoming key staples in personalized gaming are customizable in-game items and rich online communities, which have been major success factors across a number of games. Cross-platform capabilities are also improving, and we’ll see more of that in the coming year.
Developers are innovating with artificial intelligence to learn more about players, customize gameplay and create immersive worlds that provide a sense of realism and allow users to do wildly creative things. Augmented reality – which AngelList estimates to reach one billion users by 2020 – and new types of VR and other gaming hardware will further enhance the delivery of engaging, custom player experiences.
The games industry has been at the forefront of innovation for decades, and will continue to be a heavyweight in the overall technology landscape. While today’s big tech disruptors – AI, blockchain, streaming – may not have started in the gaming industry, they are intersecting within it in exciting and unexpected ways. Before long, these innovations will be solidified as critical pillars of how games around the world are created, marketed, purchased and played.