Boom der Gaming-Branche: Wem gehört die Zukunft?

Boom in the gaming sector: To whom will the future belong?

When talking about attractive and fast-growing sectors, most people think of areas like fashion, beauty or living. For sure, anyone can identify with that. The topic of “gaming” or the hobby of “computer games”, on the other hand, is often only smiled upon. Especially in times of digitisation, virtual reality and mobile, however, it is worth taking a closer look at the business of video games and gaming in general. Whether on smartphones, computers or consoles – the gaming industry is now booming. To mark Video Games Day on 8th July, today’s article provides you with some facts about everyday virtual culture.

Germany’s gaming market – the largest in Europe

With sales of around 3.3 billion euros in 2017, the German gaming market is the largest in Europe. Its growth is also considerable, since the Consumer Research Association (GfK) has found that this amounted to 15 per cent last year. The survey was commissioned by an association called game, which represents the interests of the gaming industry.

In particular, the purchase of various games and gaming apps contributes its share to that market volume, with consumers spending around 1.2 billion euros on these. The hardware segment has grown particularly strongly in 2017, rising by 26 percent to 938 million euros. Sales of microtransactions for virtual goods and additional content grew even more strongly, increasing by 28 percent to reach 844 million euros in 2017. Subscription sales, on the other hand, fell by 4 percent to 166 million euros. Germans spent significantly more in 2017 on fees for online networks such as EA Access, PlayStation Plus and Xbox Live Gold. This sub-market grew by 57 percent to 179 million euros and thus experienced the strongest of upswings. Sales of hybrid toys, on the other hand, fell back to 20 million euros in 2017.

“The games market has been developing more dynamically than any other media and cultural sector for many years – both worldwide and in Germany”, says Felix Falk, the Managing Director of game.

Four out of ten games are purchased as downloads

In 2017, four out of ten games for PC, game consoles and handhelds (42 percent) were purchased as downloads in Germany. This represents a slight increase of three percentage points compared to 2016, thus accounting for 29 percent of total market share. Looking back to 2012, the boom becomes clearer, since at that time downloads amounted to only 16 percent and the share in total sales amounted to nine percent.
There are also major differences between gaming platforms, with PC players being the leaders. Almost 8 out of 10 PC games were purchased for download in 2017, which is ten percentage points more than in 2016.

“While most games for PC, gaming consoles and handhelds are purchased on data carriers, download portals are becoming an increasingly important alternative. Buying via download has created new possibilities, such as the so-called ‘early access games’. Smaller developer teams in particular take the opportunity to offer for sale an early, but not yet final, version of their game at an especially low price. The early inclusion of player feedback thus becomes just as possible as the interim financing of development up to the final version of that title”, says Felix Falk.

The business models: As diverse as the product range

Few sectors are changing as fast as the gaming market. This shift is also accompanied by the development of various business models and monetisation methods. At latest with the breakthrough of mobile games, the number of regular players begins to increase. Companies are therefore naturally concerned about how they can optimally market their product.

Micropayments

The so-called Free2Play games like Angry Birds or Clash of Clans have experienced a genuine boom. But since no revenue can be earned from these free games, they are financed by advertising or so-called micropayments. For example, if you want to play faster, reach higher levels or have better equipment, it will then cost you ten Talers – the equivalent of 1.99 euros. According to the Federal Association of Interactive Entertainment Software, providers earned around 200 million euros in the first half of 2016 alone with in-app purchases of free game apps. It is not mandatory for game providers to specify in advance how much money can be spent while playing their game. In addition, providers are often confronted with so-called Pay2Win accusations, since additional purchases are intended to give players unfair advantage that support victory.

Buy2Play and Pay2Play

Previously the norm, but today much rarer, Buy2Play purchases a full-price game, following which you don’t have to worry about further costs. However, this model has lost considerable popularity in recent years, as in-game shops and updates flush even more money into the tills. The Pay2Play model amounts to regular subscription fees. The costs incurred are intended to guarantee players new content, fast customer service and regular troubleshooting.

Social gaming

The approach of social gaming is by no means new. Since the very beginning of social networks, users have enjoyed investing a few minutes into small games. The Chinese network WeChat is considered a pioneer in these mini-games, which are directly connected to their platform. Optimisation of the WeChat mini-games is completely towards total mobile use. But also as a monetisation method, these games have proven worthwhile. In March 2018 alone, just two of the more than 500 WeChat mini-games achieved a turnover of over 1.58 million US dollars. Revenue is generated by in-app purchases (60 percent goes to the developer) and advertising (30 percent goes to advertisers).

The online battlefields of the future

Besides online shops specialised in gaming, major eCommerce players are also becoming increasingly involved in the scene. In 2014, Amazon’s video platform Twitch was worth around one billion US dollars. Behind this was a provider allowing gamers to broadcast their own games live over the net with little effort and then allowing others to take part. Amazon Prime Customers also regularly receive games and in-game content free of charge via Twitch Prime. In mid-2017, the Aldi Nord and Aldi Süd group of companies also entered into the gaming business. Since then, more than 4,000 PC and console games for all platforms have been offered on the Aldi Life platform. Most recently, the games publisher Electronic Arts (EA) announced in early June 2018 its intention to introduce a streaming model. The subscription, which entitles play on all EA titles, will cost $15 per month or $100 per year. The XBox manufacturer Microsoft also now claims to be working on a streaming service.

As far as developments in the gaming sector are concerned, parallels to other markets are clearly discernible. New business models and changes in gaming behaviour, such as increased mobile use and technological innovations, are bringing changes. The fact is that the gaming sector has long since departed its status as a niche industry and ever more providers are pushing onto that market.
This, however, also increases competitive pressure for retailers of video and computer games. These can only profit from the massive market growth if they always have an eye on competitors, their prices and their product ranges. Many online retailers use automated software solutions for this very purpose.
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