The gaming industry may be seen as creating products solely for fun, but the amount of money pumped into the industry is nothing to laugh at. In 2020, investment in the industry rose by 77% compared to 2019, resulting in a total of $13.2 billion invested. Mergers and acquisitions also grew by 33%, suggesting that business leaders understand the importance of gaming and the profitability of operators within the industry. The final quarter of 2020 saw 75 mergers and acquisitions – a huge number. But why is gaming so profitable – and does it have anything to do with the growing trend for immersive entertainment across the board?
Gaming’s Gold Standard
There are many reasons suggested for the cash flowing into gaming. The most obvious is that gaming represents a blend of entertainment that can fully provide its customers with what they want. Steam provides a perfect example of how game players and game developers can interact to build a gaming community. The growth of indie developers and the fanbases developed around studio favourites show the industry’s potential.
Moreover, as mobile use has grown, gaming has been able to absorb potential players this way. As streaming is becoming the preferred option for consuming entertainment, owning the content to be streamed in the first place is crucial.
So, with such a rosy future, it’s no surprise that gaming has been attracting investment. As other industries are marred by potentially unavoidable events outside of the business’s control (like a ship getting stuck in the Suez Canal) gaming seems a lower risk investment. It also reflects wider trends across digital entertainment.
Digital Entertainment Offering Customers Latest Tech
Digital entertainment options are meeting customers with products and services that reflect how they want to engage with the digital environment. The online casino industry shows this through the growing prevalence of live versions of classic table games. As the wide range of live casino games shows – from poker to blackjack, roulette to craps, baccarat and even rarer games such as Pai Gow – there are many ways for players to immerse themselves in live experiences.
By interacting with a live dealer in real-time, players can engage with the key benefits of the casino experience existing in the digital world. These live options are focused on by many casino providers as their star products, showing that the live variety in online casino is a key factor in customers deciding which site to choose.
Elsewhere, the rise of Twitch and the ability to combine gaming prowess with building a social community and even achieving elusive social media fame has created the perfect cocktail. Games are no longer just for the person playing, but for the people watching them play. The spectators. This adds value to the gaming experience itself. Games become the source of content creation themselves.
As Twitch is growing in popularity and more people are streaming, eSports is also growing. When these games are played competitively and professionally, they help to show how the industry can further make money on itself. This helps add another layer to the gaming industry which will benefit it in the eyes of investors.
The Downside for Gaming
However, there are some negatives in the mix for gaming’s future. Some suggest that streaming services are becoming too large an expense. Players/customers could be forced to have multiple accounts with many providers just to play what they want; especially as exclusive content drives the success of streaming services. What works for TV, where subscriptions can be relatively cheap, wouldn’t work for gaming, where prices need to be scaled up.
Some are already complaining about how expensive games are and each new console only drives the prices up. Streaming games also means that if support is removed for a title, it may be unplayable. Owning hard copies of content meant that, as long as the console still worked, all older games could be played.
As gaming is receiving such a windfall and so many gaming companies are changing hands, it does seem like we’re on the cusp of a new era of gaming. This comes down to the right place and the right time. The industry knows who to target and where and it also knows what elements of modern technology can be combined to give a more immersive gaming experience.