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How Can Music Harness the Power of Gaming?
Gaming and Music Market Analysis and Commentary
16 Mar 2020 - As the gaming and music landscapes continue to evolve, reshaping themselves in ways that are mutually beneficial, Futuresource Consulting has collaborated with the BPI on a new industry report. The recently-released BPI report explores the initiatives and models used by the gaming industry and explores how music can harness the opportunity.
Gaming and music have been transformed in the 15 years since Guitar Hero was released for the PS2 and sparked multiple collaboration opportunities. Not only was music placed at the centre of the game, but a raft of additional hardware opportunities was created, including sales of guitars, mics and drum kits. Fast forward to 2018 and the games market was worth $144 billion across games hardware and software, with everything to play for. Now, in 2020, Futuresource believes the games industry has reached a watershed year, with companies taking cues from video and music industries in a bid to bring gaming to a wider audience. In a reciprocal move, music has a lot to learn from how the games industry has redefined itself.
“Both gaming and music are riding a fresh wave of growth,” says Carl Hibbert, Associate Director at Futuresource Consulting, “and there’s plenty of potential for players on each side of the fence to join forces. On many levels it’s happening already, with examples like Marshmello, the dance music producer and DJ leveraging Fortnite’s fan base through a Fortnite-based music video. He has also released a player skin available to purchase in-game. Other artists such as Lil Yachty and Tekashi 6ix9ine have streamed Fortnite gameplay or leveraged the game to build a social media profile. Team-ups like this are just the beginning of a movement that promises huge potential.”
Music and video have benefitted from the ongoing consumer love affair with subscription models and streamed content, and gaming is beginning to follow their lead. Gaming as a Service (GaaS) offers a regular source of consumer monetisation, and MMO’s such as World of Warcraft have been hugely successful with the business model. However, services are now beginning to offer up sizeable libraries and give access to a wide range of diverse gaming content, further opening up the market.
Beyond streaming the game itself, live streaming of video game play is also becoming an increasingly popular pastime; this provides additional exposure to gaming accessories due to hardware partnerships with gaming influencers.
“Game streaming is becoming big business, with major personalities comfortably earning annual seven-figure salaries,” says Morris Garrard, Analyst at Futuresource Consulting. “As with all online personalities, monetary success comes from scale, with each ad view or subscription typically only netting a small amount. Tip jars have become an important part of leveraging audience numbers, with fans supporting streamers with a few dollars at a time, which quickly adds up to a substantial living.”
James Manning Smith, Market Analyst at Futuresource Consulting adds, “Mobile game developers have become experts in monetising our deeply-entrenched desire to win and our hunger for instant satisfaction. Virtual currency and game mechanics have expanded from simply offering additional lives or bypassing wait times, allowing users to fully customise their in-game wardrobes or purchase upgraded weapons. Parallel opportunities could certainly be explored further within the music industry. While the cost of these purchases is often relatively low, it can soon build into significant sums and since the cost of creating the merchandise is also relatively low, the profit is extremely lucrative.”
Both the gaming and music industries are expecting a positive year in 2020, with both markets continuing to exploit positive revenue trends. While gaming software dwarfs the music industry, valued at $143 billion versus music’s projected $26 billion revenue in 2020, both industries continue to evolve content delivery and marketing opportunities to drive the next wave of growth.
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Here at Futuresource Consulting we deliver specialist research and consulting services, providing market forecasts and intelligence reports. Since the 1980s we have supported a range of industry sectors, which has grown to include: CE, Broadcast, Entertainment Content, EdTech and many more.