TV’s big play on gaming

TV’s big play on gaming

Bambos Eracleous, Partner for Sports, Media & Gaming, on how tie-ups with media owners and the move to more of a subscriptions model will see Gaming have a massive impact on TV.

It’s far from plain sailing in the games industry right now, and I mean that commercially speaking rather than in relation to piratical adventure of the kind to be found in popular games like “Sea of Thieves”. The FT recently ran a piece with the provocative headline “Game Over? Industry suffers slowdown after-decades long winning streak” and Sony PlayStation has announced plans to axe 900 jobs worldwide and close its 22-year-old London studio, which enjoyed success with the development of karaoke and football games.

Gloomy though this news is, gaming still offers enormous untapped potential. Perhaps we are even standing on the threshold of a new era. Last month, media giant the Walt Disney Company announced it was paying $1.5 billion to acquire an equity stake in Epic Games, the company behind the wildly successful Fortnite and owner of Unreal Engine, a powerful suite of graphics development tools which Disney has already used to make TV shows such as “The Mandalorian”. The investment signals a deepening of the relationship between the two companies who are collaborating on what Disney CEO Bob Iger describes as “a transformational new games and entertainment universe” that will bring together Disney’s beloved brands and franchises with Fortnite.

All of this plays into the ongoing blurring of lines between the worlds of Media, Gaming and Sports. Given its significance, this is a trend on which I am often known to opine – as in my piece last month on how sports-adjacent content can be a win-win for Sports and Media owners alike.

Some setbacks were to be expected following the huge surge in Gaming during pandemic lockdowns and a spate of investment fuelled by cheap borrowing when interest rates were lower. But while some are paying the price of changing times, overall the growth picture is positive. By one forecast, the value of the global Gaming market will rocket from US $281.77 billion in 2023 to $665.77 billion in 2030.  

And Gaming will have a big influence on the future of TV. Last year, white label B2B cloud Gaming solutions provider Gamestream and video technology and B2B2C service provider outfit Netgem forged a partnership to integrate gaming with TV streaming entertainment in the service packages of telecom operators. The aim is to transform TV and mobile into an interactive entertainment hub for families, allowing for a multi-player approach that also enables fan communities. Young audiences, or digital natives if you prefer, are particularly hungry for new TV experiences. Enormous leaps in technology, connectivity and low-latency streaming are opening new doors every day.

Also, as the strengthened Disney/Epic relationship indicates, there will be a greater leveraging of Gaming intellectual property in TV formats. Yes, movies too of course. But considering that some big screen video game spin-offs have been rather lame, it is TV that has Gaming and Media folk most excited.  

TV series such as Netflix's “The Witcher” and HBO's “The Last of Us” have led the way in showing games can spawn brilliant TV content, assuming there is sufficient investment in writing and production quality. An Omdia report last year pointed to a 50% increase in games adaptation in 2022, as more video game franchises entered the “transmedia space”. Omdia also noted that consumer perception of this kind of content has significantly improved in recent years – and there is an appetite for more of it.

Netflix is well aware of that appetite and is making a big push to cater to it, for example by hiring talent from the Games sector and working with Ubisoft on the development of several games, including an Assassin’s Creed title. Last year, Netflix launched the first public tests of its cloud-streamed games to select consumers in Canada and the UK. These allow consumers to play its titles on a TV, which could help Netflix more easily compete with other non-mobile gaming platforms.

From a Gaming sector standpoint, collaboration with TV/Media businesses may prove a winning strategy in terms of boosting the gaming subscriptions model, which is on course to overhaul the old 'unit-sales-based' business model. Many gamers are already in the streaming world, and more will follow. An October 2023 report from MiDIA Research showed there were more than 180 million global game subscriptions active in 2023, up from about 171 million the year before. The number is projected to reach 318.5 million by 2030. This represents a shift towards what some term an engagement-based model, monetised by the amount of time consumers spend playing games and any in-game purchases they make.

Game over? Certainly not. But rules are changing and lines blurring – just as the graphics get crisper and more jaw-dropping than ever.

  

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