One of the things that a lot of people outside of the gaming circle miss is that video gaming is one of the most profitable in the whole entertainment industry. According to Bloomberg, in 2018 the whole video gaming industry was worth $138.5 billion USD. In fact, eSports is now rivaling the NFL for viewers and has turned playing games into a more profitable state of affairs than Hollywood in just 25 years. This is due to the fact that video gaming has extended into different fields. It’s not just sitting and playing anymore. Today people like watching other people play and this is what threw gaming into one of the most popular sports to watch online.
The industry has become a way for the whole country to support their economies. According to Video Game Yearbook, in 2018, Spain has the 9th biggest video game industry in the world netting more than 16 million players. Taking into consideration countries where gaming is even more popular like Japan, Korea, China, and the USA one can only imagine what kind of benefits the industry can have on smaller countries as a whole. It is also worth mentioning that games are the first option of audio-visual entertainment in Spain and its rapidly growing popularity is taking a huge bite off of other whales in the industry.
People Like to Watch
As we have already mentioned, video gaming has moved out of the constraints of only playing the game. It has become a fully-fledged entertainment industry with people streaming their games either on Twitch, Youtube, Facebook, and other smaller platforms. The biggest one is, to this day, still considered Twitch, which has grown almost 50% over the last year. With average viewers netting 2.5 million unique viewers a month only on this one single platform. This was due to the popularity spike of Fortnite, a battle royal style free-to-play game where 80 players are thrown into the map in the free-for-all type of scenario, it was netting around 40% of the streams on Twitch from 2017 - 2018 overtaking the most popular games of that time League of Legends, and Dota 2.
A lot of the streaming revenue also comes from the online casino industry. With blackjack and slots becoming more and more popular a human interaction was added for the position of a dealer to create an even better experience for the user. For this, the development of gambling-related streaming services has also taken its part. In fact, statistics show that good 20% of the whole industry is gambling related casino content where one can play real money online casino games or even watch other people play. This is quite normal for video game industry as loot boxes, which are a type of gambling where you pay around $2.5 USD for a key and open a chest, which gives a random reward in a slot like mini-games, have made themselves comfortable in a lot of major AAA titles including Counter-Strike: Global Offensive, Battlefront, and etc.
Where do People Watch?
The popularity of streaming platforms like Twitch, Facebook, and Youtube is bigger than cable TV. Netflix has even come out stating that Fortnite, with its popularity, was a bigger competitor to Netflix than HBO. It has also crushed the highest viewed cinema releases like Wonder Woman and Jumanji netting more audience than the NFL. As a funny instance of companies using the popularity of video games to draw people in Wendy’s (a very popular fast-food restaurant with its sarcastic social media managers) has started live-streaming a video game on social media platforms with their funny comments. They got a whopping 27,000 hours of reproduction with just 10 hours of broadcast. The NFL, Samsung, and Marvel have also invested money to release downloadable content in these games to promote their new movies, phones, and events.
A lot of people are using the open-source free software called Open Broadcasting Software(OBS). To all those older streamers remember the days when you had to have a 3x beefier machine than your main one to run video games while streaming in decent quality with xSplit? Yeah those days are over for good hopefully.
Profitable Strategy
Due to the sheer amount of audience in online video game streaming platforms, a lot of companies are focusing their strategies on exactly such things. A lot of these companies have also started working with influencers who have their own channels and utilize other platforms like Instagram, Snapchat, Twitter, and Tiktok to reach their audiences all around the globe. Ninja, for example, is one of the most popular Twitch and Youtube streamers who plays Fortnite and nets around $500,000 only on sponsors and donations from his viewers. A lot of companies like Redbull, Hershey’s, Uber, as well as other hardware related companies like Kingston’s HyperX, Razer, and etc. are focusing on advertising their products - mostly even providing top of the line hardware to their partner streamer, to advertise on their channels.
Epic Games, which is the developer of Fortnite, has made it clear that it plans to have a tournament with around $25 million USD in sponsorships. This includes online activations, streaming, merchandise, marketing, and whatnot.
Conclusion
In conclusion, it is apparent that the video gaming industry is rapidly growing on all fronts. It is not only providing a platform for people to view their favorite people play their favorite games but also a huge industry where populations with different types of backgrounds can work together in. This gives the incentive to encourage such businesses not only on local but on global level as well. A lot of different companies are seeing this as better and better ways of advertising to the viewer base since these platforms draw in people who are more engaged with their content creators. Largely due to this is why Youtube and Facebook have started adopting their online video game streaming practices and implement them into their own social media or video streaming platforms. From Justin.tv to Twitch and billion-dollar industry - video gaming has become one of the most if not potentially the most successful industries to achieve such high goals in such short times.
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