by Cliff Cheetham
Those who view the gaming market as a niche that is hard to sell into might need to have a rethink because things are changing.
The use of the word ‘niche’ might need some clarification. It implies gaming is a small market that is hard to access and has limited appeal, the usual vision of the gaming customer being the proverbial spotty teenager hiding in his bedroom tightly clutching his joystick in his sweaty palm.
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
You’ll notice something out of the usual with the use of a gender-specific term. I didn’t say ‘person’ or ‘user’, I said ‘him’ and that is because traditionally the gaming market was ten to 23-year-old males, but this is no longer the case.
In a recent survey by Forrester examining the demographics of the UK gaming market, it became obvious the original gamers are still playing but, crucially, introducing children of both sexes to the pastime. The Forrester report showed that 48 per cent of gamers are now aged between 18-44, 26 per cent of gamers are over 45 years of age and 39 per cent are female.
You only have to look at the revenues associated with gaming to realise it cannot still be dominated by teenage males because of the amount of money being spent. TNWA Group, which manages the UK’s largest PC gaming community, recently produced details of a user poll which identified that users spend at least £650 a year on hardware and £180 a year on software.
This also helps to explain how major vendors such as ATI and Nvidia between them can push revenues north of $5 billion a year, and a single publisher like EA can do $3 billion.
Gaming is now embedded across the whole range of society and has considerable level of revenue associated with it, but why should it be treated differently from any other market? Research firm DFC believes gaming is "one of the fastest-growing segments of the interactive entertainment market" and predicts it will grow more than 80 per cent over the next five years, with major increases in the number of PC gamers themselves, leading to more revenue from digital distribution and PC hardware sales.
There cannot be many markets of this size that could grow 80 per cent in the next five years, but you only have to look at the buying patterns to understand why this is possible: users who replace their hardware well before it is obsolete, or who will buy competing products and software and peripherals for both.
You can delve further into TNWA’s recent demographics survey to see users not only own multiple PCs but they also own at least one mobile gaming platform and one in three have purchased a third-generation console.
Entering the mainstream
From a sales perspective, gamers offer so many bites at the cherry it is hard to understand why people still consider it niche. But if you do not play computer games it is difficult to understand the allure of gaming. Of course, the reverse is true: if you are a gamer you have the same problem understanding why people do not see how great it is.
Perhaps what we need is more opportunities for people to see gaming on a big scale as part of a mainstream activity. The recent Play.com live event at Wembley Stadium did just that. The usual worries for a first time event of organisational issues and low turnout seemed to dissipate with the early morning mists that hung around the huge arc of the national football stadium.
Thousands of keen gamers streamed past the statue of Bobby Moore, eager to see the latest software and hardware the PC and console gaming market has to offer. It was clear the gamble had paid off when, from the moment it opened on Saturday morning, the event was teeming with a huge range of visitors, from teens to families with small children, and mature gamers, thrown in with film and music fans in a very comfortable mix.
Play.com has been keen to pitch itself further into the gaming market and has invested a significant sum (no doubt supported by vendor partners) in the event. It seems it has its eye on the PC and console gaming market and the huge revenues this market generates.
Gian Luzio, head of software at Play.com, says: "At the moment there isn’t much of a gaming event in the UK that brings together all the different games publishers and their offerings for the consumer." With visitor numbers expected to top 20,000, Play.com seems to have this type of event all to itself at the moment.
But it is only at events like this that you see the market as it is — a tremendous variety of people using gaming to create a shared experience.
Dell has invested significant time and money in gaming and is reaping the benefit. At a recent briefing in London, Abizar Vakharia, senior manager of the gaming group at the direct-selling giant, said: "Gaming is a fast-growing industry and touches a wide variety of people worldwide, who are drawn by the sense of community and the entertainment value."
The shared media experience we used to get from TV has gone with the break-up of the channels and diversification of the formats, but in playing a game the users share the experience, regardless of where or when they play.
Contrary to what a lot of mainstream press says about computer games ruining our society and teaching negative behaviour, gaming is becoming the shared experience that allows us to connect with one another. Most games now require team play and environmentally based learning in order to progress.
Lack of investment
Any other multibillion dollar industry would expend huge sums of money to support the community and build the infrastructure. After all, these are the people you want to buy your next product, so you would look after them, wouldn’t you?
But this does not happen. A small number of the gaming-orientated manufacturers do a lot of work at community level, building and working with the community at large, but the majority of manufacturers want to sell products to gamers but don’t want to put anything back into the community.
This is not necessarily a deliberate lack of support; many simply don’t know where to start or what they can do. There is an advantageous element to this. Working with the gaming community is probably one of the most cost-effective marketing programmes you can undertake, because it is currently in the position of football in the 1970s, in that you can walk in and get an enormous amount of coverage for your money.
It is true that gamers are perceived as a hard target by many advertisers and that they often produce below-average results on click advertising and standard campaigns. But this could simply be an advance warning of what is to come for standard advertising, since gamers have been exposed to online media for far longer than the general public.
Gaming is more compartmentalised than you might expect, so depending on your requirements you can find something that suits your product’s demographics or branding requirements. There is a huge competitive scene surrounding gaming and this influences a large spread of the gaming community.
In the past few years there have been attempts to create franchise-based organisations to run large-scale leagues and events with TV coverage and massive budgets, but perhaps these miss the point. The Premiership may be the best league in the world, but you can trace its roots down to the blokes running around a muddy pitch on a Sunday morning all around the country.
Regardless of their ability, when every child starts playing football they believe they can one day be a Premiership footballer, and this is the spirit that needs to exist in the competitive gaming scene. Creating high-end leagues for TV coverage works well for a small number of sponsors, but sucks up huge amounts of cash and is detached from the mainstream community, seen as unattainable by most of the people it aims to present itself to.
Long-term stability and engagement will only be gained by supporting the community from the ground up and, for the accountants, this is also vastly more cost-effective.
There are challenges for anyone looking to support the gaming community to build brand and product awareness. The planning needs to be long term, and with any community of this size, the effort needs to be targeted. This requires a good understanding of the market. For most, this will involve engaging with some of the companies and organisations that support the community, which are almost always peopled by gamers with many years of experience.
The possibilities are almost unlimited. One could, for example, sponsor any number of single game leagues with up to 2,500 gamers per game, that run all year round and have matches played every week (www.enemydown.co.uk); or a community project working with the Metropolitan Police using games to engage with at-risk teenagers (www.projectgamerz.co.uk).
The UK gaming scene is a living, breathing community actively seeking partners. It appreciates those that support it and it is no coincidence that the companies already working within it are the ones doing well from the community.
So the next time you look at those budgets and wonder where that extra lift of sales is going to come from, remember the market that’s expected to grow 80 per cent in the next five years.
As a 30(cough)-something gamer, I’m probably the sort of target you would like to sell to. I have two notebooks, three PCs and three mobile gaming platforms plus a cupboard full of peripherals and software titles I really shouldn’t have bought. I’ll be spending the rest of the day building my new quad core gaming system.
And whom did I buy it from? Well, I changed from my normal supplier after I saw a reseller sponsoring events on my favourite gaming channel. I knew of it but had never bought from it before. So that’s one new customer and £400 of business from me so far, and I haven’t even picked the new graphics card yet.