Trends change the face of industries, but hardly any other has been as digital and responsive to shifting consumer needs than that of the gaming industry. The effort has certainly paid off, as interest in games isn’t ‘just for kids’ anymore. In fact, while physical game distribution has been on the decline for years, the industry has expanded its reach and made itself closer to the 2.7 billion gamers worldwide.

Digital business models have not only changed who buys or the way people buy, but also the content of the game itself. As a result, it has created opportunities to optimise marketing and build stronger customer loyalty for brands.

We look at the most important trends in the industry and give tips to marketers.

It’s not just the launch that counts

In the past, big budget games were rushed to meet their release dates and make a return on investment. Marketing was carefully timed for the point of launch to make the most impact, as the majority of a game’s revenues were generated in its first few weeks. Today, however, many publishers and developers incorporate Games as a Service (GaaS) to continuously supply new content, as game revenue in the first few weeks after launch now account for only a small percentage of its total. In fact, the majority comes from in-game content; Grand Theft Auto (GTA) V, originally released for the Playstation 3, is the classic example with its spin-off version GTA Online. Seven years after the original GTA V release, it has become the most popular entertainment property of all time, thanks to its add-on content that makes up 78% of its $1.4 billion total revenue. Still capable of topping the charts, the game is set to be re-released for Playstation 5.

What this means for marketing:

Ideally, marketers not only promote the game through advertising, but are also involved in product development from the outset. The challenge is to find the right balance between long-term monetisation and an engaging gaming experience, because players will turn away if monetisation is the core of the game — NBA 2k20 being the most recent example. Visiting in-game shops should be an option to incentivise players to unlock special skills or benefits, not be the only way to advance in a game.

Earn money with a free-to-play model

$1.8 billion in revenue, from a game that’s free? Fortnite did just that last year as the highest earning game. Through this model, revenue comes primarily from in-game purchases, where players buy additional content for real money. Fortnite might now be a well-known game, but there’s a reason for that and it isn’t an isolated case. In fact, the four best-selling free-to-play games had a turnover of $6.5 billion last year. Popular game apps are in no way inferior, as the sales of Candy Crush Saga and Pokémon GO have now generated over $2 billion and $3 billion in lifetime revenue. A mobile market where new app games are produced daily makes it all the more impressive that these publishers (and marketers) know how to get players to spend.

What this means for marketing:

Surprisingly only a small percentage of users make in-game purchases, with estimates ranging from 5% to 18% depending on the region. This makes it crucial for marketers to identify higher lifetime value customers, because it’s not just the download that matters, but the revenue that a customer generates over time. Doing so depends on targeting ‘high-spenders’ over those who may download but move on to the next app that intrigues them. Marketers should test several channels, including social networks and advertising on the open web, in addition to App Store platforms. Secondly, invest in the gaming community to feed enthusiasm for your game over a longer period of time. Lastly, there’s the type of purchase; while some apps favour a subscription model, others rely on a one-off payment, for example to unlock additional levels. This can be of benefit, as players are introduced to in-game purchases without having to subscribe right away.

Time in the game is crucial

In a game’s development phase, care is taken to ensure that customers play as much as possible to increase the probability of in-game purchases. This is done by implementing frequent daily rewards or time-limited events, under the notion that the longer players spend time on a particular game, the greater the probability that they will spend money.

What this means for marketing:

Marketers should learn from subscription apps, where the strategy includes a long-term plan that combines in-game content with ongoing marketing efforts, not just a plan for launch. The most successful game apps launch different “seasons” of a series following a release, thereby offering new content. This is communicated to gamers over a longer period of time, which can be done via earned and owned media. In-game events, or cross-promotions, can provide additional attention.

Digital distribution is becoming increasingly important

While there are still holdouts who prefer to buy physical games for reasons such as technical superiority or the personal desire to create a physical collection, the number of digital sales continue to rise. In the U.S., 83% of all video and computer games were sold digitally. Did you know the current Xbox One S even has a cheaper, all-digital version? Yes, without a drive. Sony also has something similar in the works for its upcoming Playstation 5.

What this means for marketing:

As games move swiftly to digital, so must its marketing and communication, and why not when it only takes a few clicks from seeing an ad on the web to downloading and testing a game? Moreover, there are ad formats that perfectly replicate, and even enhance, the in-store feel for customers to get a sense of what a game is all about. Some game publishers also rely on digital launch events with additional incentives, or use crowdfunding simply to generate more attention, even when financing is already secured.

Stream or play?

Tyler Blevins, the gaming streaming star also known as “Ninja”, earned up to $30 million per year just to exclusively play games on Microsoft’s Mixer over rival streaming platforms, such as YouTube, Facebook, and Amazon’s Twitch. That alone should say enough about how important the streaming market has become to the gaming industry.

What this means for marketing:

Streamers are important because of their impact as influencers, but they are only affordable for a few gaming publishers. Focusing on certain niches and streamers with a smaller but loyal fanbase can be just as worthwhile. Ubisoft’s Hyper Scape video game took the combination of streaming and gaming to the next level in increasing viewership before the big reveal, as players could earn early access to the beta by watching Twitch streamers play with hopes of being the next randomly selected to join the game. Such collaborations can then be expanded via other media channels, which in turn attracts even more attention and brings other streamers onboard.

Marketing within the gaming industry has become increasingly challenging because most games want to occupy the limited time customers have, for as long as possible. It means marketing should already be factored in during a game’s development, and be continued at product-level after its launch. Leveraging a long-term plan and relying on a mix of channels and collaborations are as important as ever for marketers to lead their brand to success.