From Pong to a multi-billion dollar media channel advertisers can't ignore
A Far Cry from Pong: modern games have come a long way
Now that gaming is mainstream and likely to show further explosive growth during lockdown, the big question remains – is it an effective advertising medium?
To people of a certain demographic it was a culture shock a few years ago to encounter esports for the first time and be told that 24/7 esports TV channels were galloping away across the globe and were worth hundreds of millions of dollars.
It was like news from a galaxy far, far away, or more precisely words from a parallel universe.
You mean not just that people play computer games not just competitively but professionally, and that thousands of spectators turn up to watch the electronic games in the flesh and on TV?
Actually it’s not quite so strange. Spectators turn up in large numbers to watch two men – so far it is men - play out world champion chess matches in total silence, two figures huddling over a board with wooden pieces.
The moves are relayed to a large board on the platform and these days instantly analysed by spectators around the globe with all-conquering computer programmes looking for a new variation on centuries old themes.
Online chess tournaments with up to $250,000 prizes have adapted rapidly to coronavirus in place of closed live venues.
It was also never seen as strange in the pre-Covid world that millions around the world were happy to turn up to watch players run around after a leather ball with multi-billion industries created as a result.
There is always a beginning, an initial insight for a new industry, if you look back far enough.
For egames and esports there is the illustrious ancestor – Pong, the first video game launched in 1958.
More than 60 years on figures for this March show that overall gaming sales globally broke through the $10 billion mark in a single month for the first time.
To say that gaming has long ago escaped from the bedroom and become mainstream is an underestimate, although a truth still not universally acknowledged.
It is also a case of the obvious that the current pandemic does not just discriminate in death rates among particular groups – gamers are probably safer than most - but between industrial sectors.
Covid is really bad for Rolls Royce, Tui and Wetherspoons and brilliant for TV viewing figures (though not advertising spend), wine delivery companies and above all else the gaming industry.
It is difficult to imagine a better time for online games and gaming. The industry is booming with ever more sophisticated consoles and games on the way and that was before the huge boost to come from the lockdowns that have spread across the world.
There will be bandwidth problems with more and more people playing live online and downloading ever more data-hungry confections.
There may be a financial cost but industry specialists do not foresee a major capacity problem.
There will be winners and losers and most of the winners are gaming companies with pedigree such as Nintendo with its Switch device and games such as Animal Crossing: New Horizons which sold 5 million units in March. In esports groups such as the German company ESL which has been in the field since 2000 should prosper.
The losers, unless they get a move on fast, will be the big movie studios such as Disney and Warner Bros where, according to Enders Analysis, the rush into OTT channels has tended to overshadow games.
Just as the studios helped create Netflix by licensing their back catalogues did they go for the easy way out in developing their characters and properties in games by happily taking in the licence fees?
At least Sony has the launch of The Last of Us 2 to look forward to – if it dares.
Can they get away with launching a game about a pandemic while a real pandemic is still a clear and present danger?
Now that gaming is mainstream and likely to show further explosive growth the big question remains – is it an advertising medium, effectively a new channel for brands to reach consumers?
A more detailed answer will come from Mediatel’s lockdown event on The Future of Gaming on 28 May, but for now the short answer is an emphatic “yes.”
If anything the surprising thing is that the sector has not been seen as a prime target for the advertising industry already.
The players are there. The money is there.
According to the Entertainment Retailers Association the video gaming sector accounts for just over half the entire UK entertainment industry and worth around £3.86 billion.
One aspect of gaming fanatics, who are, contrary to commonplace expectations, evenly split by gender, is at the same time an advantage and a potential pitfall.
They are passionate, they are determined and above all else they are fans. They will therefore have to be spoken to in the right tone of voice and you can no more easily interrupt the flow of the game with advertising than you could interrupt a James Bond with ads in the cinema.
This would suggest, at least initially, that sponsorship by relevant brands should be the first initial step.
If there were to be a games channel then the provision of free access to games in return for watching an initial ad might work.
Apart from the passion of players another strength of gaming as an advertising medium would likely be strong audience data.
You would know whom you were getting – if the industry finds an appropriate way to reach them.
The targeting would not be as hit and miss, and potentially dangerous, as a programmatic dip into social media.
You would also in general know the nature of the game you were associating your brand with – and act accordingly.
Around the world there are bodies such as the self-regulatory Entertainment Software Rating Board in the US, which provides classification on age and content and in the UK the statutory Video Standards Council Rating Board.
There are standards and regulations in the way that the tech giants of California have until now managed to resist for social media.
The creation of a new channel for advertising would of course mean more competition at a difficult time but the sheer scale of the industry and its fans can no longer be ignored and there will be wins for those who get it right.
Meanwhile, this survivor from the Pong generation will concentrate on playing online three-dimensional chess with his eldest grandson – a snip at a one-off payment to Apple of £1.99.
Join Mediatel on 28 May for The Future of Gaming, a free lockdown event where we speak to the brands, tech platforms and agencies investing in gaming and esports to discover the potential of this new media channel.