Today’s post is written by T.K. Brown.
An industry once associated with introverts and basement dwellers has finally ascended from the underground and into the light of mainstream media. For outsiders, this may have come as a surprise, but for those who are close to the industry, the transition was inevitable. Gone are the days of dimly lit arcades, low budget titles and disconnected consumers. Today’s video game market highlights global connectivity and budgets that rival the film industry’s most profitable franchises. The industry that gave the world a mushroom eating Italian plumber is now grossing more revenue than all other media outlets and extending it’s demographic with each passing year. It is truly the golden age of video games and like it or not we are all along for the ride.
A recent Q1 2011 report by the NPD Group (formally the National Purchase Diary) reveals U.S. consumers spent a total of $5.9 billion towards the video game industry during the first quarter. This figure includes all software and hardware purchases made under the video game industry umbrella. Although impressive, this is only one ripple in the entertainment revenue pond. The largest wave came back in 2005 when video game revenue surpassed the movie industry domestically. The progress continued in 2007 and 2008 when video games surpassed the music industry and global film sales numbers respectively. According to CNBC, the video game industry recorded sales of $18.58 billion in fiscal year 2010. The message is clear. Video games are big money and a reflection of incredible consumer interest.
The industry as a whole has the flexibility to reach a varied and constantly changing demographic. This has allowed companies to not only continually increase revenues, but also diversify the sales channels they are using to reach consumers. Mobile gaming has put a console in the hand of anyone with a smart phone or tablet. Meanwhile, social gaming through networking sites like Facebook have connected individuals around the world over a common interest such as digital farming. As a result, research firms like Ovum are predicting digital game revenue to reach $24 billion in 2011. Whether the individual is a child learning basic mathematics on the Nintendo Wii or a business executive looking to kill some time on the train ride home with some Angry Birds, it appears now that everyone is a gamer, even if they don’t play video games in the traditional sense.
So what is the result of all this? How can companies market to such a diverse and ever changing consumer base? Well, the answer is not yet clear, but the video game industry is taking steps to connect consumers to their brands and make those consumers even more engaged. While most digital and social game downloads are “word of mouth” sales, the AAA titles, which can be most closely compared to Hollywood’s blockbuster films, are now being advertised and marketed in a similar fashion. The recent Call of Duty: Modern Warfare 3 release saw a slew of marketing up to and beyond its release. This is nothing new for the current generation of consoles. However, games like COD: MW3 are making the transition from simply marketing the game itself to a more brand oriented approach. This commercial spot not only highlights the Call of Duty brand, but it also features Jonah Hill and Sam Worthington, two well-known ‘A-List’ Hollywood actors. By associating these two actors with the Call of Duty brand, Activision connects the consumer to actual human beings, something more recognizable and relatable.
The key to a successful game has been and always will be a well-made product. However, the ability to connect consumers to the product is something we are only seeing the early stages of. By hiring popular and recognizable actors to represent a video game, a sense of credibility is gained. Actors and actresses are already starting to lend their likeness and voice talents to in game characters and it appears the next step will be to have them promote the games brand to consumers through advertising campaigns like the one for Call of Duty. It won’t be long until A-list actors and actresses are working on video games like they would the latest Pixar movie. The industry is demanding that it be taken seriously and with the kind of avenues they have to support that demand, people have no choice but to listen.
The push to make the video game industry and the brands that comprise it visible to the general public has never been stronger. Online, television and magazine marketing are just a few of the avenues companies are taking to make people aware that video games are, in fact, out of the basement and are here to stay. So, the next time you sling shot an angry bird, explore renaissance Italy with a world famous assassin or lead your military squad to victory on the streets of Manhattan, take a second and realize you are not alone in your parents basement. You are with the rest of the world: A world at play.
T.K. Brown is a video game industry professional. His research focuses on the integration between video games and popular culture.