The irresistible ascent of gaming in 2021

For many of us, whether new, veteran, casual or enthusiast, the gaming world has become an extension of our world. From building your own island to competing in online tournaments, the gaming space is now a destination to express through virtual selves, socialize within communities, and chase our passions.

Gaming is now Gen Z’s favored media, followed by social, online browsing, streaming music and then, what most people might assume, watching TV and movies. [1]  As Gen Z continue to be a driving force behind rapid media adoption, more brands investigate the needs of the gaming space.

If 2019 was the year of esports and 2020 was a broader discussion on gaming, 2021 is the recognition of the metaverse catapulting gaming onto the media main stage.

The metaverse creates tremendous opportunities for advertisers to reimagine their branded experiences and is set to be the next disruptive force across industries. Tech platforms are already betting big on this opportunity, with Facebook bringing together its apps and technologies under one new brand, Meta, [2] after announcing an ambitious plan to recruit for 10,000 high-skilled jobs over the next five years to help develop the metaverse. [3]

Luxury brands are particularly active in that space. For instance, Burberry have managed to natively integrate their IP into the metaverse with their partnership with Blankos Block Party, where they created a NFT skin and accessories for the playable Blankos character. [4] Leaning into the Blankos community on Discord, Burberry and Mythical announced the drop on the platform and the skin sold out in a few minutes.

With the global surge in consumption of digital entertainment, fandom has become the new unspoken key performance indicator where entertainment conglomerates are actively venturing into the gaming space, bringing an interactive component to their franchises. The NFL collaboration alone reportedly created $50 million in revenue for Fortnite, [5] which also has partnerships with franchises such as Marvel and Star Wars. In turn, gaming properties have also ventured into the entertainment space, from merchandising to brand collaborations to animated series. Game publishers are gunning for long-term success and profitability by building their fan culture and turning their intellectual properties into multi touch experiences.

Gaming will no longer be just about one-off activation. Creating a long-term presence in the gaming space, where people spend upwards of $61 billion a year on in-game purchases (with that number expected to increase by 21% by 2025 [6]), to showcase brands and products in a diverse, fantastical way is the way forward.

Esports is fast becoming its own industry segment. Based on popularity and audience growth, esports has been gaining recognition in recent years as a legitimate sport, appearing increasingly in larger leagues, tournaments, prize pools and in mainstream broadcasting. Audiences are now calling for better content, more diverse representation, and richer experiences. The opportunity for brands is too big to ignore. Non-endemic (or non-gaming) brands need to collaborate with game publishers and league organizers to design more integrated, relevant, and meaningful offerings for the sport and the audience.

As the gaming opportunity grows, brands will flock to this space, for better or for worse. We will inevitably see more bad examples of in-game ads as it will be the easiest thing to do. Brands already use TV ads for pre-rolls or standard display for intrinsic in-game and it doesn’t do the space justice. Brands will have to adapt the type of creative and the way they approach gaming in the same way they had to adapt to new formats and behaviors when they stopped using TV ads in social. In many cases, in-app purchases and expansion packs - not advertising - will be the primary revenue driver for game publishers. Therefore, to even be allowed into the gaming spaces, brands will need to focus on the value they can bring to the experience.

There are many ways brands can create value. They can help create virtual events (e.g., fashion shows, music events) for people to connect with online, create skins to liven up people’s experiences, create add-on packs to deliver unique attributes in games, support loved streamers, and give access to a streamer’s exclusive content for people who might not be able to afford subscriptions. Even simply adding an extra life to a gamer can be beneficial. Brands must think beyond the current ways to advertise on other channels and approach gaming with fresh eyes and an open mind.

The gaming space comes in so many flavors that it is normal for CMOs to feel overwhelmed when thinking about their 2022 strategy. Don’t psych yourself out. You can start with pivoting some of your preexisting spends with trusted partners into their own gaming verticals, such as Facebook Gaming and YouTube Gaming, or into podcasts and TV shows that talk about gaming. Understand what you’re hoping to achieve and adapt your measuring framework accordingly.

Here are 5 key recommendations to guide your gaming efforts.