Currently, the universe of video games presents trends of evolution that can alter its shape significantly in the coming years. The introduction of immersive technologies –augmented and virtual reality-cloud gaming and the esports phenomenon are elements that predict the new paths that this activity can follow. Now, all this future altarpiece goes through much more advanced wireless mobile broadband connectivity, which can only give the next 5G standard.
Video games are a severe thing. We are talking about a market that moves around EUR 100 billion worldwide and has annual growth expectations of around 10%. Within the cultural industries, it is a native digital sector, that is, it was born in the world of ones and zeroes and was not imported there, like cinema or music.
The king of audiovisual leisure
According to the estimates made by Newzoo1, the video game industry in the world will generate in 2018 almost 138.000 million (approximately 119.000 million euros), a figure that is projected to grow 30% to 2021, rising to us $ 180,000 million (nearly 155.600 million euros). Of these figures, the most significant growth will take place in video games via mobile phone, whose weight over the total is expected to increase from 37% in 2017 to almost half by 2021.
Video games are also a buoyant activity in Spain and have generated a turnover in 2017 of 1.359 million euros, almost 17% more than the previous year, according to figures offered by the Spanish Association of video games (AEVI). They constitute the first choice of audiovisual leisure in our country, above recorded music (232 million euros invoiced in the same period) and cinema (597 million).
We Spaniards spend an average of 6.6 hours a week playing on average, a time which may seem excessive but which is behind 7 hours in Germany and France and 9.5 hours in the British. From a macroeconomic point of view, every euro invested in this sector has an impact of three on the economy. Also, it is responsible for 8,000 jobs, and each new direct employment created in the activity generates 2.6 indirect jobs in other sectors 2.
We are therefore faced with a flourishing activity, and it is interesting to analyze the trends that can define the future of the video game in the short and medium-term. Experts in this field point in three directions: the proliferation of video games in virtual reality and increased, the increasing importance of online games and the growing importance of sports.
Spouting virtual reality
The technologies considered immersive (augmented reality, virtual reality, and Mixed Reality) are the eternal candidates to lead a new digital revolution. The worlds that open up to interact virtually with objects, people and places to which we do not have physical access are a source of applications for the scientific field, business, medicine and, practically, any activity that we can think of. However, when we think about virtual reality, the first thing that comes to mind is leisure and, more specifically, video games. But it’s not even here.
Oculus, HTC, and Sony placed virtual reality systems on the market in 2016, to which must be added MR that Microsoft launched in late 2017. Sony has sold over three million VR helmets for Playstation and Samsung five million Gear VR. These figures are far from what may be a mass-market 3.
Several reasons seem to be holding back the ability of virtual reality to reach a critical mass of users that drives its diffusion exponentially. On the one hand, equipment remains too expensive for the average user. Also, there are problems related to the lack of adaptation of the human organism to immersive technologies, which leads many users to feel dizzy or dizzy when using them. The uncomfortable and voluminous nature of virtual reality helmets is another factor that does not help extend their popularity. Finally, more stable and bandwidth-based networks are needed than current ones to improve the experience in virtual worlds.
Unlike virtual reality, augmented reality seems to be more prone to attain the consumption of the masses. As demonstrated in 2016 the phenomenon Pokémon Go, based on the Nintendo game and Niantic, who broke the record exceed 600 million dollars in revenues in just ninety days, beating the champions of sales as a Clash Royale from Supercell and Candy Crush Saga from King.
However, few of us are still confident that the video game will be the engine of a take-off of virtual reality. The predictions that you made Ovum set at 1,800 million dollars to the revenues of the virtual reality applied to video games in 2019, which is equivalent to more than half of all the performance of the remaining sub-paragraphs of this technology.
For its part, the sector continues to waste imagination in the search for new business models, even if these are something vintage, such as recovering the games rooms. These last years have seen a surge in the commercial centers of the United States classroom games –the popular arcade of the 80’s – who have teams of reality-immersive, aimed at young players who cannot afford to purchase helmets, but here you can make use of them for a price asumible4.
Play in the cloud
Another major trend –sometimes defined as disruptive-within the video game industry is cloud gaming or cloud gaming. It consists of creating an offer of titles that the user can access via the internet, just as companies like Netflix supply series and others like Spotify music.
This streaming game service already exists on platforms like Sony’s PlayStation Now or Nvidia’s GeForce Now. The most significant advantage for the user is that he/she does not have to buy a specific device or console, as these games are transmitted from powerful servers to practically any device: console, laptop, tablet, smartphone. It seems that the competition in this segment can be triggered when companies like Google, Electronic Arts, or Microsoft enter, which are already working on their offers in this respect.
The business model in this case is to collect a fee periodically by accessing to the content, as in the case of the OTT tv (Amazon, Sky, HBO, Netflix…), although the real challenge is to be able to “package” the offer, that is to say, that the same subscription gives us access to both an offer of television and video games.
The target customer of this model would be the occasional player, who is not willing to pay for specific access, but who likes to have games at his disposal along with the offer he receives from series and cinema. There are some companies already working on this line, such as Telecom Italia with TIM Games or Turner Argentina with Gould.
But it’s not all praise, it’s also critical voices about cloud gaming, questioning whether it’s the panacea for the video game industry or, at the very least, nuking its supposed advantages.
From screens to stadiums
The last significant phenomenon that has emerged around this leisure sector is the so-called esports, based on successful multiplayer video games, whose tournaments become live shows for crowds in stadiums and are even broadcast on television.
Even though the current numbers of business that moves the activity in the world are still modest (Newzoo estimates the volume of business in 2018 of 900 million dollars), the expectations for growth are very encouraging. The consulting firm Ovum predicts annual growth of 25% by 2019 of the revenues derived from the esports, a percentage that is double that foreseen for the other subsectors of the video game industry.
The main video game tournaments move a lot of money and public since they are usually broadcast live as if it were a football World Cup or an Olympics. Examples of these are the Dota2 (the International) game competition, the League of Legends World Championship, the Battle.net focused on the Games StarCraft II, World of Warcraft and Hearthstone: Heroes of Warcraft or Intel Extreme Masters, which is sponsored and driven by the computer company.