With a reported 2.6 billion players worldwide, online gaming has passed far beyond a simple pastime and is now considered to be a serious business both for investors and participants alike. Multi-player shooter game, Overwatch, as well as Fortnite and Battle Royale, are all top players in the competitions for highest engagement and earnings.
And it’s not just kids that are playing. According to a recent survey, 40% of online gamers are millennials between the ages of 25 – 34 years old. This is a demographic that not only has the money to play but also can carve out the time. Having grown up with video games, it’s a natural pastime for them.
Gamers are not just played for the entertainment value, though. Online gaming has taken on a social aspect with players developing relationships with other gamers and even meeting their significant others through venues like Fortnite and Overwatch.
Isn’t gaming a disruption?
Online gaming now goes far beyond teens sitting in a basement and has made its way from consoles and big screens to smartphones, allowing players to take their gaming ‘on the go.’ Behind the Virtual Lives of Online Gamers shares that 94 percent of millennials game on their phones compared to 88 percent of other age groups. While time spent on a smartphone used to be considered disruptive, many now find that they can manage time more effectively by using their phone during moments that they may spend waiting in line or doing something else that would otherwise require them to find a way to keep themselves occupied. Gaming can provide a great mental break and, in some cases, can be a stress reliever.
Online gaming driving other markets forward
Online gaming has become one of the biggest income drivers in our economy. An article by TFE Times highlights the increasing revenue created by video games. “Video games make more money than Hollywood when they release and there are often long, pre-order schedules and players waiting to get their hands on the newest game. This shows that video gaming is a huge industry.”
Much like movie premiers, video game launches are becoming big business in and of themselves with collaborations among toy companies and other manufacturers. Lego and Hasbro are teaming up to launch a set of Overwatch-themed toys this year. Mattel is also working with the industry to develop partnerships that will benefit both the gaming industry and the toy industry.
In February 2019, the creators of The Sims games, with over 80 million players, collaborated with fashion designer Moschimo to allow players to purchase the clothing that their gaming avatars wear. This type of collaboration is a first for the fashion industry and speaks to the influence that online gaming has on the real-life lives of its players, as well as the far reach into other industries that are not connected to the gaming world.
Who are the biggest players in the market?
While new games are cropping up every day, several companies are considered top in the industry right now.
Blizzard Entertainment is the parent company for the game Overwatch. They’re also the company behind other popular games, such as World of Warcraft and Diablo. Overwatch League was launched in 2018 giving Overwatch a stake in the world of eSports, allowing it to rub shoulders with the NBA and the NFL as top players in the eSports field.
Epic Games created Fortnite and Battle Royale (a Fortnite game). The game has close to 250 million players worldwide. Half of those players registered between June 2018 and March 2019. Part of the success of the game is the ability to play it for free. Players only need to spend money on in-game purchases, if they wish, which has proven to be a profitable model for Epic Games and numerous other video games and apps.
Mojang originally developed Minecraft but then sold it for $2.5 billion to Microsoft. Considered to be an older game, compared to Fortnite and Overwatch, it’s still played by approximately 74 million players around the world and it still seeing profits, five years after the sale to Microsoft. Many of the original developers of the game were contracted by Microsoft after the acquisition to continue developing the game and specifically to focus on an in-game marketplace to improve revenue opportunities.
What’s next in gaming
One of the biggest movements in increasing revenue for games is the addition of downloadable content. This enables players to purchase products for the game they’re playing after they’ve already purchased or downloaded the game. Even many free game apps have downloadable content that you can purchase. Some of these purchases include features such as having extra lives in the gameplay, getting hints to solve puzzles, picking out customized or themed skins for game characters. These extra virtual items are known in the gaming world as microtransactions.
The impact on the stock market
The 2017 reported earnings from the video game market were $36 billion, according to the Entertainment Software Association. While some of the companies saw a slight downturn in 2018, many video game investors saw returns on their investments. The rise of video game revenue gives young investors that never considered trading, an easy-to-understand way to enter the stock market.
Online gaming is disrupting industries across all spectrums and the world. However, this disruption is positive– not the formerly preconceived notion that all video games are disruptive and bad for your health. Quite the contrary – online gaming helps to develop relationships, reduce stress and as we’ve outlined above drive our economy.