The games industry is changing, perhaps more rapidly now that ever before. With the appetites of consumers evolving, new major players emerging plus existing companies adapting to where and how people want to play, 2019 will go down as a significant time when looking back at the direction of gaming and its technology overall.
Because of this, I’ve identified three major trends in gaming that dominated headlines and mind-share during 2019. Each of these is significant on their own of course, though taken together provide a broader illustration of the industry’s future.
This year is the last one before a new traditional console generation, as Microsoft’s Xbox One and Sony’s PlayStation 4 entered their sixth year on market. Both companies have announced new consoles for this time next year. Yet 2019 marks a more transitory period for these platform holders in terms of services and ecosystem, plus similar efforts from competitors like Nintendo and now Google to appeal to shifting audience dynamics.
Similarly, digital ownership is on the rise. Which means more varied ways to access a gaming library, plus newcomers in the space of virtual storefronts. In terms of actually playing games and their increasing popularity, video creators and streamers are more important than ever.
So. What’s driving the direction of gaming? Scroll it out to see.
Subscription Services & Cloud Streaming
2019 served up many trends. None more important than this.
The growing movement toward subscriptions, services and streaming is the first on my list because it’s the most impactful of all. Namely due to its potential for major long term ramifications on how people collect and access their library of games.
Pushing beyond the traditional model of buying a game at retail or even digitally then owning it in perpetuity, companies are ramping up the subscription side of the business model to enhance offerings as part of a broader ecosystem. One in which gamers stick around to try a variety of experiences, and pay for that privilege. Picture it like Netflix or Disney+ as opposed to buying individual films or TV seasons.
All of the “big three” now sell subscription services in which players pay a monthly fee to access a catalog of curated games, some of which are exclusive to the respective platform. Microsoft’s Xbox Game Pass with its broad selection of hundreds of games, Sony’s PlayStation Now boasting downloads as part of its service plus Nintendo’s Switch Online housing a catalog of retro games for its Nintendo Entertainment System (NES) and Super NES legacy systems.
Beyond the major platform holders, individual publishers are even trying to slice a piece of the pie. This includes Ubisoft’s Uplay+, Electronic Arts’ EA Access plus a variation of Microsoft”s Xbox Game Pass strictly for PC all with their own list of titles.
These represent the effort by each company to not just attract but also keep people active within an ecosystem while simultaneously benefiting from an ongoing revenue stream rather than the usual one-time purchase. I ultimately believe it’s a win-win for individuals and console makers. There’s really no better way to access that many games at once for the price. The tricky part is determining which is most appealing to one’s taste, because the cost starts to add up quickly.
Then there’s cloud streaming, technology by which players can stream games by leveraging a company’s remote servers instead of playing titles locally on a console or PC. Compared to the aforementioned subscription services, which offer digital downloads and feel more like “ownership,” streaming is an even more exotic way to interact with games.
There are older cloud services like PlayStation Now and NVIDIA’s GeForce Now that launched in some form prior to 2019, albeit with limited buzz and varying degrees of quality. The two major streaming platforms from this year are Microsoft’s Project xCloud, beginning as a beta in October, then Google Stadia stumbling its way to market in November.
Much has been made of the differing approaches, where Microsoft clearly labelled xCloud as pre-launch tech while Google rushed to formally release Stadia lacking a number of promised features and, frankly, enticing games. Still, the fact that streaming is becoming a more viable option as a counterpart proves it will remain part of the conversation. Especially as the technology improves, developers spend more time with it and more games are present.
The services trend will influence the future of gaming, even if the streaming option is unproven, which makes it the most important topic of 2019.
Digital Transition & Storefront Competition
It’s no secret that players are moving towards digital ownership. According to SuperData, worldwide sales from digital PC games totaled $35.7 billion in 2018 as compared to $33 billion in 2017, while the console segment hit nearly $13 billion versus $8 billion the prior year.
Earlier this year, Sony reported digital full game software ratio on PlayStation 4 hit 53%, meaning this was the first quarter ever where digital sales outpaced physical. It’s an even more significant milestone because it’s full game software as opposed to digital goods or in-game items boosting the metric.
Broader digital figures skyrocket when including mobile of course. The point above is that even segmented into console and PC, the share is growing. Intriguingly, this doesn’t mean physical is diminishing. NPD Group noted that digital sales should not cannibalize retail sales in the domestic market in its predictions for 2019, since it’s more the overall amount is growing while diversifying across segments.
Alongside this digital transformation is a trend that intensified specifically in 2019, and that’s competition among virtual storefronts. Just like brick-and-mortar stores compete with one another, virtual marketplaces battle for consumer dollars.
For years, the main player in digital PC games has been Valve Corporation’s Steam platform with 90 million active users and one billion accounts in 2018. Smaller challengers like CD Projekt’s GOG.com and others offer an alternative, especially for indie publishing, though only recently has a new storefront generated buzz and disdain quite like when Fortnite creator Epic Games launched the Epic Games Store in late 2018.
What started then carried over to this year, as more and more games announced partnerships with Epic Games Store in order to capitalize on its more favorable revenue sharing rates. Ubisoft’s Tom Clancy’s The Division 2, Metro: Exodus from Deep Silver and Take-Two’s Borderlands 3 are prime examples of those with some sort of deal with Epic Games.
The latest true challenger to Steam’s dominance reveals a parallel to console competition in that major companies and smaller self-publishers alike see upside in moving away from the platform with an effective monopoly. 2019 will be remembered as the year of the continued rise of digital distribution, even for console gaming, plus the rise of Epic Games Store and the consumer sentiment surrounding its ascension.
Content Creation & Community Support
The third biggest gaming trend of 2019 is video content creation and the fostering of communities that support the creators, plus those companies that pay in hopes to boost popularity of games through this more modern avenue for advertising. Content is key for streamers and video creators trying to make a living off playing games, and it’s certainly working.
Amazon’s Twitch is the main platform for gamers to stream directly to an audience, while Google’s YouTube remains the place for video uploading. Earlier this year, Twitch reported 15 million daily active users. YouTube is ubiquitous when it comes to online video, Google said in May that more than 200 million people watch gaming content on the platform every day.
Talk about major opportunities for building and supporting a community. The biggest Twitch streamers not only have staggering following numbers, like Tfue (7.3 million) and Myth (5.6 million), they earn hundreds of thousands of dollars via a combination of subscriptions and advertising deals. Like the model for professional athletes.
Recently, Microsoft has made serious moves in this space by doling out cash to some of the most popular video creators to move to its Mixer streaming platform. The most noteworthy is of course Tyler “Ninja” Blevins, who racked up a million followers within days of moving to Mixer in August. Ninja used to make $500K per month playing mainly Fortnite, and was paid by Microsoft for the move though the amount was not disclosed. Another marquee example is Shroud, real name Michael Grzesiek and a former Counter-Strike pro, shifting to Mixer in October after a long run on Twitch.
It’s not just about the individual streamers now. It’s also how their massive audiences can benefit the likes of platform holders like Microsoft and Sony plus publishing firms. I hate using the word, but can’t deny it’s a reality: “Influencers” are super important these days trying to boost the popularity of a new release. Pay-for-play is a term used for when a popular streamer is paid to promote a game near launch, a tactic used more now than ever by businesses to establish mind-share off the bat.
When Electronic Arts stealth launched Apex Legends in February, big streamers were there day one. The aforementioned Blevins was reportedly paid $1 million to do so. This reveals the position that major content creators have in the industry. It’s big business, whether more casual names or eSports pros, for both the gamers themselves and the companies that benefit from their gigantic audience reach.
And there we have it. While these most certainly aren’t the only trends, my three biggest trends in 2019 revolve around services and streaming, the movement towards digital ownership and the storefronts that offer virtual games then content creation, the audiences that follow and the companies that pay in hopes of benefiting from them.
Honorable mentions include virtual reality, live multiplayer games, cross-play popularity, China’s regulations, Japan’s consistency, mobile explosion, developer labor conditions and the further legitimizing of eSports. All of which are worthy of discussion.
What do you think of the final list? What about the honorable mentions? Are there other trends that stand out to you? Comments here or on Twitter are more than welcome!
Next up in the Working Casual 2019 Year-in-Review will be the Top 5 Most Impressive Gaming Companies. Catch you then.
Sources: Epic Games, Google, Influencer Markekting Hub, Microsoft, NPD Group, Sony, SuperData, Tubefilter, TwitchMetrics.
-Dom
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