Video Games are the New Kings of the Entertainment World
The video game industry is simply huge. In 2020, its income stretched to $175 billion and the following year, $200 billion. Compare that to the film industry which just earned $21 billion at the box office last year. The video game industry could double over the next five years.
In the US, this industry has been able to collect more revenue from sales than sports and movies combined. The pandemic has dealt a blow to the film industry, crowning streaming and video games the new kings of entertainment. Both industries have been affected due to the lack of attendance at stadiums and cinemas.
Here are 3 ways that video games stole the entertainment crown:
- Micropayments: The strategy that puts video games at the top of entertainment is micropayments. By buying coins, players can purchase “skins” which are low cost characters, types of guns, tools, and costumes. 91% of the total income in this industry is because of micropayments. Last year a whopping $128.6 billion was paid through microtransactions.
- Product Placement: It’s easy for this industry to insert ads in gaming maps or even skins without being annoying to players. For example, they can feature a certain car brand or a character from an upcoming movie.
- Free-to-play model: So-called freemium games are free-to-play but to have a good experience, without intrusive ads, you need to pay for it. In fact, the top 10 video games are ‘free to play.’ Another type is known as pay-to-win, which offer an overall good experience but is almost impossible to beat without unlocking features.
This industry is so hot that software companies are clamoring for a slice of the pie. Last year Google claimed a net profit of $3.2 billion on commissions from purchases made through Google devices. Apple, meanwhile, made just over $12 billion through their Store.
Metaverse development and cryptocurrencies will propel this industry to become even more profitable in the next seven years. For example, Decentraland sold virtual land for $2.4 million last year.
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