Presented by Xsolla
Historically, the game industry is a cycle of boom and bust, with ten-year trend cycles. We’ve just emerged from the era dominated by creatives and publishers, marked by mergers and consolidation, to a world where platform holders dominate. Some of them, like Apple, are demanding large platform fees for creators, and taking large legal swings at other platforms in the competitive space. In the real world, games are no longer just about play. An entire generation grew up with multiplayer games as a natural place to socialize, hang out and entertain themselves. Player demand is at an all-time high, but companies are scrambling to find new ways to distribute, monetize and reach customers in this landscape.
“The question is, are you ready for that?” asked Joost van Dreunen, entrepreneur and CEO at Aldora, featured speaker during the fifth stop of the GamesBeat Global Tour in Seattle, presented by Xsolla. “What’s the model we’ll be facing as we go?”
How does the video game industry move forward?
“Given the soft market, the answer, simply put, is that you have to go elsewhere,” van Druenen said. “You have to find other channels where you can entertain, build communities, build audiences, figure out how to reach them and offer them a different entertainment experience than we have before.”
Becoming multi-platform. Large companies, which tend to move slowly, are starting to launch new ways to connect with their players, as the industry starts to think more broadly about what it means to play. Games like Fallout now offer collectibles and trading cards, and both Xbox and Sony are pivoting to a multiplatform publishing model, instead of locking themselves in the traditional distribution channels.
“Is it always successful? Absolutely not. But at least some larger companies are willing to spend their time and money and expose their IP to build this out,” van Druenen added. “When the large platform holders start to think more creatively about different revenue models and different distribution channels, you can set your clock that the industry is shifting. The walled garden model is ending.”
Finding (and charging) your best fans. The ultimate curve model revolves around identifying your whales, your biggest and most loyal fans — and charging them more. Two years ago, the industry was still arguing about a $70 price point for premium games. Nowadays, users happily spend $100 to have the game a week or two earlier, with some exclusive digital assets. Fans want that VIP treatment, the velvet rope and the front seat. Large publishers with premium IPs can command a premium price.
Identifying new and exciting IP. Another key model is bringing more IP into the gaming space, like Lego has been doing for years, to reach a non-endemic audience and bring them into the fold.
Reaching out to mainstream audiences. Along those same lines, large companies are leaning on traditional advertising as games become more normalized as entertainment for anyone. For instance, Genshin Impact announced $6 billion in revenue and is still partnering with McDonald’s.
Embrace fan content. Finally, these days, customer engagement is more than just booster packs and in-game currency – it’s become about supporting the fanbase in making new content. For instance, The Sims, made by one of the largest independent game makers publicly traded in the U.S., is embracing fan creators now, some of whom have been creating skins and items since the first title.
“Any way you slice it, in my mind it’s always about the audience,” van Druenen said. “We can build any kind of game, any kind of revenue model, any kind of device that is super-fast and beautiful. But it’s the people themselves that will tell you what’s what. It’s giving them some degree of ownership, whether that’s organizing events, whether that’s esports or a competitive thing, a fan event. They’re successful components of a long tail, a decades-long strategy. They are the stewards of the brand and the experience overall.”
The future of gaming and innovation
Learn more about the future of the game industry at the next stop of the GamesBeat Global Tour, happening in San Francisco on October 28, as part of GamesBeat Next 2024. GamesBeat Next is a premier gathering for game developers, publishers, investors, executives and industry visionaries. Whether you’re an industry veteran or a rising star, this is the event aimed at redefining your gaming journey, so don’t miss your spot — register now!
And on December 12 in Los Angeles, don’t miss the GamesBeat Insider Series: Hollywood & Games 2024, which will explore the dynamic collaborations between film, music, television and video games. Register here to be part of the conversation.
Request your invite for the GB Global Tour here.
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