A Bright Future Beyond Covid: The Online Gaming Industry is set to create Waves
While the pandemic has adversely affected most industries, the online gaming sector is set to march ahead into a brighter future in the coming days
The online gaming sector falls among the very few sectors that have done well during the pandemic. At an unprecedented time, when industries across the world are either facing heavy losses or succumbing to the pressure of massive revenue loss, the online gaming industry has become quite robust, and is looking at a healthy roadway to success in the future.
When the pandemic hit the globe, lockdowns came in one after the other. In most places, people were asked to confine themselves to their homes for a stretch of three months and more in some countries. Unprecedented as the situation was, what hit people most was the sudden drying up of outdoor entertainment sources. The couch and study table were now places that people were spending most of their time on, and the phone became a recourse to the outside world — for news, work and of course entertainment.
Among the industries that saw a massive spurt during the pandemic were the OTT platforms and the gaming industry. The video gaming market leapt in an upward trajectory, with the global market becoming worth $159 billion in 2020. This was unheard of, and the numbers had surpassed the box office and music industry in terms of numbers (the box office recorded $42.2 billion and the music industry raked in $20.2 billion in 2019). There were several factors that have cemented the future of the gaming industry, especially in the aftermath of the pandemic.
The interface has played a bigger role than many would like to believe. The first thing that most gaming companies have focused on is improving the interface and user experience as they traverse the terrains in a game. Making them more real time and interactive, with the use of superior graphic functions, have helped in retaining their existing user base and also contribute to adding new users on a daily basis. The biggest example was PuBG, which later was banned in India. The number of players who flooded the platform globally, did so because the game had a high-definition graphic system with a real-time feel, that made the users feel like they were a part of the universe. The game reached new heights with a soaring number of global players contributing to its success.
Online gaming also opens up a user to an interactive world. The multi-user function in most games allows people to connect with gamers from any corner of the world. One engages with real gamers at varying levels of dexterity. There are multiple avenues to play in as well. There are online gaming events and leagues, which opens the door to attractive rewards, and most gaming apps offer a social media button that helps a user post their achievements on their feed, bringing in a feeling of achievement. The psychological feeling of an accomplishment helps build a user base and most online casino gaming companies are doing this quite well.
Take India for instance. The online gaming sector in the country was estimated to be worth $91 million in 2019. The expected growth rate is at a 43% CAGR year on year.
The pandemic has seen a sea change in the behaviour of consumers, but this does not leave any room for complaint in the online gaming industry. In 2020, the period between March and April, when the lockdowns were at their peak, globally, people spent $10.5 billion on online games, a jump of 17%. In India, the growth was higher, at a CAGR of 21%. The customer base steadily went up and surpassed 300 million. New entrees in e-gaming came in fast because of lack of other entertainment options, and people took to normalising expenditure on gaming, especially the share that would otherwise go to movie theatres and pubs. A big Indian gaming company reported a 200% rise in its users only during the lockdown. About a lakh people joined them daily.
It also helps in the Indian scenario that about 85% of online gaming takes place on mobile phones. When it comes to people who are casual gamers, or just want to pass the time with their fingers and brain engaged elsewhere, the quickest recourse is the smartphone. This user base has seen a growth since 2019 itself, and the time spent by an average person playing games on their phone rose by 21% during the shutdown. A very valid reason for this is accessibility of the internet and a larger chunk of the population being forced to become more tech-savvy during the lockdown. Affordable smartphones again, took the game to another level.
The online gaming industry has slowly transitioned from a volume-dependant to a revenue dependent one. Now, people don’t hesitate to buy a game that gives them an immersive and wholesome experience. New in-game reward systems, digital payment methods and a superior gaming experience helps users make a choice on expenditure that is directed at the gaming industry.
The time spent at home also saw a lot of people taking recourse to real-money gaming, which was not a trend before. The gaming companies have done a lot to secure the customer’s faith in their platform — from secure payment gateways to initial rewards and a seamless transfer of winnings to the bank accounts, all the while not compromising on a user’s privacy. The urge to make more money with games like Teen Patti, Rummy and sports fantasy leagues like Dream 11 has also pulled in more money into the gaming company’s kitty, thereby giving them the resources to better the experience.
The future of the online gaming industry post pandemic is extremely bright because investors across the globe have now seen the potential of the sector as a multi-billion industry. Investments are coming into gaming companies to bring out and ideate on new products to capture the fancy of the younger generation who are more at ease with the online way of doing things. With virtual coin packs to the freemium version of games, subscription models are also doing well for companies like PlayStation, EA Access, Google Play Pass and Xbox.
