Since they first appeared, video games have entertained all kinds of people. They have advanced greatly since the early days of video games and the original Nintendo and Atari releases. Video games have become more lifelike than ever, so the days of pixelated graphics and constrained audio are a thing of the past. Video games advance along with technology.
The expense of developing a video game to work on one of the major platforms has increased along with the complexity of video game creation. Games can now cost tens or even hundreds of millions of dollars, yet it was once inconceivable to spend millions on development. In terms of production and marketing costs, this has brought video game creation into the realm of Hollywood motion pictures.
The market for video games is enormous. In actuality, it has surpassed both the music and film industries in size, and it is still expanding. There are more than two billion gamers in the world, despite the fact that it doesn’t receive the same media exposure as the film and music industries. That is 26% of all people on the planet.
It is not surprising that businesses desire a piece of the action. The gaming sector produced $155 billion in revenue in 2020. Analysts forecast that the sector would earn more than $260 billion in sales by 2025.
As a result, tech firms are attempting to tap into this source of income. Tech behemoths including Google (GOOGL), Apple (AAPL), and Meta (META), formerly Facebook, have all announced plans to enter the video game market.
KEY LESSONS
Although video games have been around for a while, their appeal has grown recently.
More money is spent on video games than on movies and music combined.
Apple, Google, and other tech behemoths Meta have all announced plans to enter the gaming market.
Video game firms will profit from the future of subscription streaming services.
The new scale of the video game industry is a result of a number of factors, including technological advancements, changing consumer demographics, and the growth of items associated with video games.
The Role of Tech Companies in Streaming
Companies that aren’t often associated with gaming, including Meta, Apple, and Google, are entering it. The tech sector is exploring methods to make streaming video games as natural as streaming music from Spotify or a movie from Netflix.
Through its well-known Xbox platform, Microsoft (MSFT) has already been involved in the video game sector. Project xCloud, a program that enables players to broadcast Xbox games to PCs and other devices, was launched by the firm in 2019. The service is available to Xbox Game Pass Ultimate customers and became live in September 2020.
With Unity Technologies, a company that creates a game development framework for individuals to create video games, Meta started building a gaming platform in 2016. Google announced Stadia, a tool that enables users to broadcast video games in the highest possible quality. Stadia is Google’s cloud gaming service. It is accessible on Google’s browser, mobile devices, tablet computers, and desktop PCs.
Allowing gamers to stream video games without a computer or gaming device is the main objective of all of these businesses. Physical video game purchases in the form of cartridges or discs are getting harder to find as this trend continues.
Since production, shipping, and storage expenses will all be eliminated, subscription streaming services are the way of the future and will be advantageous to video game developers like Ubisoft and Electronic Arts. Traditionally, games were only purchased around holidays and other significant events, but subscription services have made it possible to generate cash all year round.
Technical Advancements
There is virtual reality now. The quality of the virtual reality headsets that Oculus VR, a division of Meta, has already delivered, is being actively improved. Meta acquired Oculus VR in 2014 for $2 billion.
Virtual reality will bring another level of immersion to video games, which have already eclipsed many other types of entertainment. When consoles add peripherals to accept those inputs, there will be further experimentation with controls, including the addition of speech, touchscreens, and gestures to game dynamics.
Apple also plans to develop a virtual reality headgear.
Expanding Market Demographics
The expansion of the market in terms of demographics is another development in the video game industry. People are playing games at younger and older ages, and the gender split is almost equal. In order to enter the United States, professional athlete visas are now available to the top gamers competing in eSports leagues. There is a huge market for gaming, and it is expanding.
Video games have gained such widespread popularity that some gamers now earn hundreds of thousands of dollars just streaming footage of themselves playing them at home. The video game market now includes this as a source of revenue.
Old-school video games
The same is happening with video games as people around the world experience a wave of nostalgia and remakes and reboots of beloved movies and television shows from decades past. Older gamers who played the games when they originally came out, as well as a new generation of players, are in great demand for and very fond of these classic video games from the early years of the business.
A lot of businesses have updated versions of their consoles in order to capitalize on this nostalgia. More than any other corporation, Nintendo (NTDOF) has capitalized on the enthusiasm in classic video games by introducing the Nintendo Classic Mini and Nintendo Switch, two gaming devices that support classic Nintendo titles. For businesses that were present at the start of the industry, this has developed into a reliable source of income.
The conclusion
Innovation has always been important to the video game industry. It is reasonable to anticipate new experiences, controls, and technology. Streaming services and playing mobile phone games will become significant revenue generators as more and more people spend time on their phones, and major IT companies will try to participate by utilizing their current infrastructure. Just as understanding slot machine pay tables is important when playing in a casino, so is understanding the video game market when deciding where and how to invest your resources.
The shifting demographics of gamers are arguably the most intriguing change in the video gaming industry. The future of the video game industry is bright since more people are playing games, increasing demand for more immersive entertainment, and seeking out simpler ways to access games.