How the advertising market is overexploited in the gaming sector
By Reggie Raghav Jerath
With the skyrocketing popularity of online games and esports over the past few years, Fortune 500 company Accenture claimed this year that the total value of the video game industry now exceeds $300 billion. of dollars. That’s bigger than the music and entertainment markets combined, with growth driven by greater engagement in digital products as a byproduct of the global COVID-19 limitations.
This continued expansion creates a major marketing opportunity and higher revenue opportunities for creators, marketers, content producers and game platforms in the industry; with a projected 2.8 billion gamers worldwide in 2021, more energy is pouring into online gaming than ever before.
Revenue generation through content streaming
The way people make money is changing, and while current revenue streams for players on game streaming websites are successful for some, the costs of using popular sites reduce potential revenue. CrypIndustry behemoths are making millions from streaming media (Twitch, in particular, is taking a 50% cut from Twitch affiliate membership payments), while gamers are caught in a monopolistic paradigm that favors big business due to a lack of choice.
Global gaming advertising activity is highly concentrated and vendors employ various techniques to compete, including significant engagement in joint ventures and mergers to capture substantial market share and increase their global footprint. Providers are forced to use various growth methods such as marketing campaigns and advertisements to increase the exposure of their services as the market becomes more competitive. Various other competitors in the industry are turning to mergers and acquisitions (M&A) and bilateral deals with advertising entities to expand their business reach and customer base.
Market Drivers and Barriers
One of the major drivers for the growth of the global in-game promotion market is the growing number of video game players and the increase in collaborations between video game companies and advertisers. With full digital access, games drive gaming business. Additionally, the business is expected to grow by more than $300 billion by 2025, while the worldwide gaming population will reach 2.4 billion. As a result, marketers are motivated to increase their investments in in-game advertising, which will allow them to reach a wider audience and accelerate product demand during the projection period.
Despite the fact that console and smartphone gaming are entirely separate beasts with their own selling populations and playstyles, smartphone gaming was seen as the next big thing because virtually everyone had a phone, which doesn’t wasn’t the case with consoles. However, there is a problem with games that harms the experience of people who play them – unwanted ads are the problem.
In-game ads use terrible marketing strategies that have the exact opposite effect when trying to target a buyer. Those ads that look good but aren’t part of the game can attract downloads, but far too many people will drop the game and never buy it. Other advertisements are designed to irritate potential customers. Supposed to pretend to be an interactive game but redirecting the player to a download page, is an example. Being too long, having little game-related content, or even displaying a single photo ad to watch, for 30 seconds.
A more efficient method of generating income
Although game monetization is still quite young, it has proven to be an effective way for gamers to make a profit doing what they love. However, the streaming business is not for the faint-hearted, and advertising video is difficult at best; it is extremely difficult for a client to earn money through referrals or goods unless they have a large fan base, which can take several hours of focused work to create.
Emerging monetization platforms now offer gamers a new revenue stream, allowing them to grow their following while monetizing independently. Gather is a layer 1 blockchain allowing visitors to donate computing power that would otherwise be idle, rewarding them with cryptocurrencies and distributing the power to corporate clients through a decentralized cloud platform.
These monetization platforms hope to strike stronger deals with real-time gaming platforms and publishers in the coming months, having already worked with popular esports organizations and game publishers. These platforms combine the power of blockchain technology with the relentless pace of the gaming industry to create new revenue streams for gamers and content creators.
Trying to strike the right balance between effective advertising on the gaming app and not inundating users with advertisements is always a tricky task for app publishers. User experience is essential to the survival of games. Therefore, harmful, interruptible or insulting advertising could completely derail the user experience. Ultimately, presenting safe, relevant, and on-brand advertisements to your consumers is the goal of in-app advertising. The point is that for app developers, as long as advertising provides value to the game, gamers will accept it. Ads can then complement rather than distract from the player experience.
Additionally, players are happy to watch advertisements in exchange for in-game items like infinite lives, bonuses, extra items and in-game currency. These advertisements help game developers to earn money with their games. However, they make the game more addictive, encouraging players to play longer and more frequently.
The author is CEO and Founder of Gather Network. The opinions expressed are personal.