Why Video Games Will Be the Next Dominant Tech Platform
One of the things I look forward to each year is the latest annual outlook from longtime media industry leader and management consultant Michael Wolf and his firm Activate. If you haven’t already done so, I highly recommend downloading the 148-slide Activate Media & Technology Outlook 2021. Even though the year’s half over, it’s still a must-read. I devoured it as soon as it was available and was not disappointed.
It is a very special view on how consumers are changing their media behaviors and preferences, looking at everything from TV to ecommerce to video games.
Emphasis on video games. Because what really struck me is one of the report's core theses: Games are emerging as not just the fastest growing media behavior among Americans, but as the next dominant tech platform, akin to what we saw in search starting 20 years ago and social over the past decade.
The opening bullet captured it perfectly: “Gaming is the new technology paradigm as most digital activities (e.g., search, social, shopping, live events) will increasingly take place inside of gaming.”
I believe that Wolf and his colleagues at Activate are spot-on. Games will become the dominant platform for digital activities over the next decade. As a result, games will become one of the most important platforms for advertising and marketing during that time frame as well. It will become the place where people don’t just play games but watch their TV and their movies (and their ads, too).
Just look at Fortnite: The free-to-play game now has more than 300 million registered users around the world and is streaming private concerts and full movies to gamers logging on, while collecting more than $5 billion this year in micro-transactions from a small subset of users who buy virtual goods and capabilities to use in the game.
Do I think publishers of games like Fortnite should immediately flood their platforms with ads? Absolutely not. The introduction of advertising into these massive and fast-emerging media platforms will require managing a delicate balance centered on a single, simple and unbreakable precept: The gamer is in charge.
These games are so popular because gamers and their friends playing them are the center of this universe. Ad models that emerge on these platforms will have to operate the same way.
What might that advertising look like, then? It will start with permission. I expect gamers will have to consent to accept each and every ad. It will include skipping. Gamers will need to be able to skip any ad they don’t want to watch.
And ads in video games will certainly involve rewards. Gamers will need to receive value for ads that they watch. The majority of Fortnite players don’t spend on anything in the game, but I’m sure those same hundreds of millions of gamers would also like some of the same stuff their friends are getting. Watching ads to get these perks might be an attractive path.
Bringing ads to premium video games will absolutely require amazing ads, with really great, relevant creative. Sticking in ads from programmatic feeds or taking any old ad off TV or YouTube won’t cut it.
If advertisers want to be welcomed into video game environments, they will need to treat them like the Oscars and the Super Bowl: Create great ads that are highly relevant to the event while being fun and memorable to experience.
I suspect the emergence of video games as the next dominant tech platform may take some time to play out. But, given the acceleration and growth that video game playing has experienced through this terrible pandemic, it may happen much sooner than many people would expect. Ads may be part of this trend sooner, as well.
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An earlier version of this blog was originally published by MediaPost.