5 Trends That Revolutionized the Gaming Industry

The gaming industry has evolved dramatically since the birth of the first home video game console, the Magnavox Odyssey, in 1972. The Magnavox Odyssey only lasted three years before the console was discontinued because it was too new and average Americans weren’t buying. However, it ultimately set the foundation for what was to come.

Fast forward 50 years and the gaming industry is on its ninth generation of consoles, including the Playstation 5 and Xbox Series X with a ridiculous 2.7 billion combined players worldwide according to Gaming: The Next Super Platform, a report published by Accenture. That means that more than 35% of the planet currently plays video games in one form or another.

Accenture’s report also revealed the global gaming industry to be worth more than $300 billion. With an industry as large as the gaming sector, developers, publishers, console manufacturers, etc., try to establish new trends to push the industry forward. Similar to any other industry, some trends fade out quickly while others disrupt the market to a point where it’s now commonplace. 

In the past 50 years, various gaming industry trends have fallen flat on their face, but more than a handful have changed the landscape. Here are the five trends that revolutionized the gaming industry forever:

1 - Streaming

There is no doubt that one of the biggest influences on the gaming industry was the rise of video and streaming services like YouTube, Twitch, and Discord. Some could even argue that the popularity of watching others play video games online is currently at its peak. A recent study on Twitch Revenue and Usage found that Twitch hit peak concurrent viewership numbers in June 2020, with 6.5 million viewers.

Here are some of the ways the trend of streaming affected the gaming industry:

• Word of mouth marketing: AAA publishers are used to spending millions on a marketing budget to advertise their games. Now, with streaming, the budgets can be smaller, and indie developers can have the opportunity to advertise the same way AAA publishers can. For example, games like Rocket League and Among Us didn’t have a big marketing budget but were able to take the industry by storm because a couple of well-known streamers played those games live for millions of viewers to watch.
• Shifted industry development: The rise of streaming changed how developers created their games. They would analyze their game and determine if it was good for streaming. Some developers would even go as far as integrating Twitch mechanics into their game. That means viewers of any stream can affect what happens in the game.
• Stream marketing: Early on, the industry was hesitant to engage with marketing through new media. However, the industry quickly realized it could use this to its advantage. Publishers would partner with popular streamers to get them to play their games on stream. This was, in essence, the industry's version of influencer marketing. This tactic was quickly embraced because of the return on investment advantages of the traditional forms of marketing.

The rise of streaming affected everyone in the industry, from developers down to content creators. Video game streaming isn’t leaving us anytime soon either as it’s one of the most popular aspects of YouTube and Twitch with a combined 405 million subscribers on YouTube’s top-ten gaming channels, according to an Accenture study.

2 - Esports 

Competitive gaming has been around since the early 1970s. Although, the competitive gaming scene as we know it today can be pinpointed back to the late 1990s and early 2000s with the rise of LAN parties. Private LAN parties were at their peak during that time because broadband internet access was unavailable or too damn expensive for most people.

As technology advanced and consoles became the dominant gaming platform, the idea of LAN parties and competitive gaming evolved. As connecting one system to another via ethernet cables became a thing of the past, LAN parties became more of something you did when you wanted to get some buddies together to play in one place rather than something you had to do.

The growth of modern competitive gaming was greatly influenced by the Asian market, particularly South Korea, in the late 1990s. While ESPN’s reality television show Madden Nation brought the idea of competitive gaming to the American audience in the early 2000s. 

At this point, competitive gaming was still seen as a niche market and not something that disrupted the industry. However, all that would change in a few years with the rise of Major League Gaming (MLG) Gamebattles.   

MLG started in 2002 as a competitive gaming platform for various games, mainly in the shooter genre. MLG was slow to gain popularity until their service, Gamebattles, took off in popularity in 2007 with “Call of Duty 4: Modern Warfare.” Gamebattles allowed gamers worldwide to compete with others, putting their skills to the test for money.    

Fast forward a few years into the early 2010s, the esports scene was taking the industry by storm. The industry was in an “adapt or die” situation. For example, in collaboration with the developer Treyarch, Activision released “Call of Duty: Black Ops 2” in 2012 with a major focus on the esports community. They introduced a competitive game mode and a built-in broadcasting feature called “CODcasting.”   

At this point, it was nearly impossible to be involved in the gaming industry and ignore this trend. More money was introduced to the prize pools, and viewership numbers were exploding. According to one study, the total United States revenue for esports is projected to surpass $515 million by 2023.

3 - Microtransactions

During the sixth and seventh generations of consoles, major video game developers treated their games like big-budget studio movies. Games took years of development with QA testing and debugging before the final product was released. The industry was revolutionized when downloadable content (DLC) became another way to get gamers to pay for products after release. DLC only kicked off the new monetization approach, now known across the industry as microtransactions.

The now standard practice of microtransactions is a business model where gamers can purchase virtual items for a small amount of money. Microtransactions started to appear in free-to-play games but have recently become popular in paid games as well. 

The first microtransaction appeared in 2006 when Bethesda sold horse armor in “The Elder Scrolls IV: Oblivion” for $2.50. It was used to test the market on this business model and, overall, the player reaction was negative, but it was the ninth best-selling DLC in the game. The horse armor was even still being purchased more than two years after the initial release.

With the industry seeing unbelievable amounts of money coming in from free-to-play games, microtransactions are a trend that is here to stay.      

4 - Cross-Platform Play 

Until recently, gamers who played on Xbox, Playstation, PC, Nintendo Switch, etc., were siloed into playing online games with others who had the same game system. Gamers worldwide were waiting for the day when they could play any game with their friends who had a different system. 

Multiple games had a barebones system of cross-platform play. For instance, “Final Fantasy XI,” released in 2002, allowed PS2 and PC players to interact. However, true cross-platform play wasn’t available until “Fortnite” supported online play across Xbox One, PS4, PC, and Switch. 

True crossplay was considered a pipe dream for developers and gamers alike for a long time due to a lack of sufficient technology. The dream became a reality when x86 architecture, AMD microchips, and the Unreal Engine became readily available to console manufacturers and developers. 

Since the launch of full crossplay a little over three years ago, more than 50 games have implemented true crossplay. Gamers now expect every game to be released with true crossplay, which is why this trend has forever changed the gaming industry.  

5 - Fortnite

Throughout the history of video games, a case can be made for a handful of games revolutionizing the industry. For example, “Pong” started it all off, “Mario 64” changed how developers create games, and “Call of Duty” altered the modern-day first-person shooter (FPS) genre. 

While “Fortnite” has its critics, it’s hard to deny its influence on the entire gaming industry. The free-to-play battle royale game developed by Epic games launched in 2017 on Xbox One, PlayStation 4, and PC. It was later available to play on the Nintendo Switch, PS5, Xbox Series X/S, and mobile devices. 

Shortly after the initial launch, “Fortnite” took the gaming industry by storm. According to the June 2020 quarterly business review between Apple and Epic Games, Fortnite was described as the largest game in the world, with 80.4 million monthly active users and 350 million player accounts created up until that point. 

Here are some additional statistics that display the dominance of “Fortnite” in the gaming world:

• 15.3 million concurrent players joined an online event, while more than 3.4 million watched live on Twitch and YouTube. (Fortnite’s Twitter)
• Fortnite generated $9.1 billion in revenue between 2018 and 2019 (June 2020 QBR)
• Fortnite earned $1.1 billion in mobile revenue before it was banned on mobile. (Fortnite Usage and Revenue Statistics study)
• The Median weekly time spent playing Fortnite for the average player is between six and ten hours. (LendEDU)

The thing with “Fortnite” is that it didn’t offer many new features that the industry hadn’t seen before. However, the application of those features and how they were presented on a mass scale revolutionized the gaming industry. Let’s delve into those aspects and explore how Fortnite forever changed the gaming landscape. 

Free-to-Play Business Model

As the name suggests, free-to-play (F2P) is a business model for online games where developers and publishers do not charge players to join a game. Instead, they use other revenue streams such as in-game transactions, advertisements, and much more to earn a profit.    

Fortnite did not invent the free-to-play business model. In fact, this business model has been around since 1997 with the release of Achaea, Dreams of Divine Lands. F2P has been used in various forms since it was introduced to the market, but Epic Games put its own spin on it with the launch of Fortnite.

But what did Fortnite do differently from its predecessors that ultimately changed the gaming industry from a business perspective? Due to the popularity of Fortnite, Epic Games leveraged its position in the market and monetized almost every aspect of the game (these are the microtransactions we touched on earlier). For example, players can buy cosmetic items such as outfits and accessories, weapons, dance moves, and much more.

According to a report published by the analytics firm Sensor Tower, Fortnite earned an average of $1 million per day due to players buying in-game items. After seeing great success using the F2P business model, others in the industry tried to mimic Epic Games’ approach, like when Activision released “Call of Duty: Warzone” for free to download.

Popularized the Battle Pass Monetization Approach

Free-to-play games for console and PC communities have all employed generally the same microtransactions approach until the microtransactions strategy was changed forever when Fortnite introduced the battle pass monetization approach. Epic games based the battle pass on a similar idea first seen in Valve's “Dota 2.” 

“Fortnite’s” battle pass provides players with additional in-game content, generally through a tiered system. Specific items within the battle pass may be free for all players, but to earn every item, players must purchase the entire pass through microtransactions. Some items contained within the battle pass include cosmetics, such as weapon and character customization, emotes, and other non-gameplay-affecting elements. 

Battle passes are typically available for a limited time until a new season begins. Once the season has ended, it’s generally impossible for players to obtain those items. The battle pass and seasonal approach feeds into the psychological phenomenon of fear of missing out (FOMO). 

If a player knows a specific in-game item is only available for a limited time, they are more incentivized to buy the battle pass to complete the tiers or shell out extra money to purchase those tiers. From a developer's and publisher's perspective, the battle pass and seasonal strategy helps generate millions of dollars in revenue.

Let’s delve into some of the numbers to see how much the battle pass approach generated for “Fortnite:”

• LendEDU surveyed 1,000 players who frequently played Fortnite and nearly 69% of respondents claimed to have spent money on the battle pass and in-game items.
• Five million battle passes were sold on the first day of season three, resulting in $50 million of revenue. (Game Industry Biz)  
• Fortnite spenders shelled out an average of nearly $85 on various in-game items (LendEDU) 
• 25% of Fortnite players pay for subscriptions on Twitch, and 43% pay $9.99 a month to watch their favorite streamer. (LendEDU)

Since Fortnite’s release, this monetization approach has been used in numerous games, including Call of Duty, Apex Legends, and Rocket League. 

Additionally, the battle pass approach changed how post-launch content is provided to gamers. The battle pass and seasonal tactic go hand-in-hand. The industry took notice of Fortnite’s success using those tactics, and moving forward, more and more games will use the battle pass and seasonal approach.               

Popularized the Battle Royale Genre

The battle royale genre mixes the last-man-standing gameplay approach with survival, exploration and scavenging elements of a survival game. The genre started gaining popularity in the early 2010s with mods on games like “Minecraft” and “ARMA 2.” When “H1Z1” was released in 2015 and “PUBG: Battlegrounds” launched in early 2017, the genre saw a new wave of fans. However, it wasn’t until the release of “Fortnite” in late 2017 that the genre exploded in popularity and became one of the most popular genres on the market.

Developers and publishers across the industry took notice when tens of millions of gamers hopped on the battle royale hype train. That’s when Activision dipped their toes into the battle royale genre with their mode Blackout, a game mode packaged within the paid game Call of Duty: Black Ops 4. While Activision saw quick success with Blackout, it was hard to compare results due to the mode only being available with the purchase of Black Ops 4. 

However, that would soon change with the launch of “Call of Duty: Modern Warfare” in 2019. In collaboration with the developer Infinity Ward, Activision re-evaluated its approach to the battle royale genre and released “Call of Duty: Warzone” in the first quarter of 2020. Warzone was the first time a COD game was free-to-play for all console players.

The move to pivot and refresh “Fortnite’s” business model was a great success for Warzone. During the first month of the game’s release, Activision regularly updated the public on Warzone’s growing player base. Warzone saw six million plays within the first 24 hours, 15 million in the first 15 days, and 30 million in the first ten days. After the first month, Call of Duty announced that more than 50 million players registered for Warzone.

The battle royale genre is here to stay, and the industry can thank the popularity of Fortnite for that. 

Takeaways

The gaming industry has come a long way since the release of the Magnavox Odyssey in the early 1970s. However, that is to be expected as technology advances. While there've been various trends in the gaming industry that tried to change the landscape, it’s hard to argue that streaming, esports, microtransactions and cross-platform play are some of the things that disrupted the industry to a point where there is no going back. We’re in the golden age for gaming, and it’s going to be exciting to see what other trends await that will take the industry to the next level.

Great ideas and everlasting trends, especially in the gaming industry, tend to be spawned from collaboration or inspiration to put your own spin on things. Just look at Activision’s partnership and collaboration with Infinity Ward to create “Warzone.” Why can’t you create the next partnership worth billions of dollars?

If you're interested in collaborating, partnering, or chatting with other leaders in the gaming industry, take a look at the benefits of becoming a Rolling Stone Culture Council or contact us directly. Your next idea that revolutionizes the gaming industry can come from the connections you make as a member of Rolling Stone Culture Council.