The Under Appreciated Rise in Gaming

I’ve been writing about the rise of gaming as a global trend for a few years now. A whirlwind of things came together at the same time which helped lay the groundwork to fuel a rapid rise in gaming globally. What started with dedicated video game consoles and PC hardware, moved into the mobile and cloud landscape and, in some way or form, billions of people play video games on a regular basis.

Expanding Gaming’s TAM
Central to understanding, and appreciating, gamings rise and what it means for the future is grasping how smartphones and other new technology are playing a role in bringing rich and immersive gaming experiences to more people. The increasing graphical capabilities of smartphones and tablets to a degree have been central in bringing rich gaming hardware to billions of people who never would have purchased a gaming PC or console. Even if a small market comparatively, Microsoft’s efforts (as shown in their super bowl ad) to make XBOX and PC/Windows gaming more accessible to those who can’t use traditional hardware are all important steps forward. I particularly thought this statement in the conclusion of their ad was particularly powerful.

While the ad had a deeper meaning for Microsoft and the philosophical values that underline their approach to innovation, it made me think more deeply about why gaming is, to a certain degree, empowering in more ways than one. Specifically, this point also speaks to why something like E-Sports has the potential to be so much bigger than any professional sport in the future when this Gen-Z digital native demographic (and their descendants) becomes the biggest population segment in the world. The meta-point is gaming levels the playing field. In a digital environment, everyone has a fair shot at being the best. This is the exact opposite of the physical world where only a small percentage of humans who won the DNA lottery have a shot at being the best at a sport or game.

This, to me, is the fundamental thing that makes gaming empowering, which is an element driving its global success. The potential for, as Microsoft’s slogans says, everyone to play is quite compelling. Given the high-status given to elite professional athletes, it is no wonder that such a thing as E-sports and gaming’s leveling of playing field becomes compelling. With e-sports and gaming, everyone has an equal chance at being the best.

Walls Come Down
Another element of gaming that is new is evidenced by Fortnite. A trend I think is so unstoppable that it changes expectations of digital interactions going forward. Fortnite is the first truly global gaming phenomenon that is cross-platform and still multiplayer. A frustration for decades of gamers has been the walled garden that is online multiplayer. XBOX gamers can’t play or compete with Playstation Gamers, or Nintendo Gamers, or PC gamers. Fortnite changed that, and I believe the tolerance for such walls will be no longer.

Kids and even many adults will no longer gravitate in mass to games that have walls not allowing everyone to play together. This is significant because it creates a new normal and within that new normal an enormous opportunity. In the gaming walled garden world, the addressable market for a software platform, and even a gaming subscription service was limited to the hardware installed base of the gaming platform. If a game was XBOX only, then the only software opportunity was the size of the XBOX installed base. Similarly, if a game was PC just, the market was only PC gamers. Fortnite changed that and all a sudden the total addressable market for a game was everyone. From a developer standpoint, this is a much more attractive opportunity for monetization.

While it may take some time, I think the end of walled gardens is coming in the gaming arena. It is simply a better proposition for both consumer and game developers. What is interesting, is how the end of walled gardens in gaming may signal the end of walled gardens in personal computing but I’ll leave that topic for a future article.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

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