The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
Euromonitor International attended the largest annual video gaming conference in the world, E3, held in Los Angeles, California, over 10-12 June. It highlighted some of the major macro drivers affecting the video games industry globally, such as technological innovations, new game releases and features as well as the strategic focus of key players in the industry. Major console companies such as Sony, Nintendo and Microsoft all had large exhibition areas to promote their latest and most powerful consoles as well as allow consumers to gain an insight into what is in store for the future from these three gaming giants. However, whether it is the power of these consoles that may change everything, other dynamics such as free-to-play games or the growing trend of mobile gaming remains to be seen.
The battle of the consoles continues to rage, with Microsoft dropping the price of its Xbox One by excluding the sale of its once central innovation, the kinetic censor. The aim of this is to try and compete with the more successful launch of the PlayStation 4 from Sony, which is now developing its much anticipated virtual reality headset, Project Morpheus. Although not much was given away regarding release dates for this technology, it is expected to be an important driver of the video games industry, along with its main competitor, Oculus Rift. Nintendo, however, focused mainly on its most important IP, with the cross-platform new release of Super Smash Brothers for the Nintendo 3DS and Wii U. Nintendo also revealed its Amiibo figures which use NFC (near field communication) to interact with its consoles, much like Skylanders and Disney Infinity. With such popular video games character IPs such as Mario and Donkey Kong in Nintendo’s portfolio, Amiibo could start to change the tide for Nintendo and its recent lack of success in the gaming industry.
Free-to-play gaming is an issue which concerns both hardware and software manufacturers alike. The model has experienced rapid growth in many markets and is seen by many to be the future payment system for video games. However, there is a risk involved in making a free-to-play game. From a software manufacturer’s point of view, sales from free-to-play games are only captured if the game is successful and the consumer continues to play and pay for it, as opposed to the reduced risk approach of a game’s entire sales achieved upon initial purchase. In addition, some have suggested that major console manufacturers could be reluctant to fully endorse free-to-play games as profits for console manufacturers do not come from the consoles themselves but from the games which are bought and played on them. Free-to-play games have historically been more successful with mobile and tablet devices and so an increase in these could damage sales for console manufacturers.
Probably the most interesting observation about mobile gaming at E3 was its distinct lack of presence at the conference. Mobile gaming is forecast to grow by more than US$3 billion over 2013-2018 in absolute terms, making it one of the fastest growing categories in video games over the forecast period. Gaming on smartphones and tablets has been increasing and arguably taking share from gaming on consoles and PCs whilst capturing revenue from casual gamers. Many more independent game developers are being priced out of designing games for the major consoles as the barriers to entry are too high. This means that a flood of innovative games have been released for mobile gaming use. With controllers now being made to “clip-on” to smartphones and tablets as well as more sophisticated games being created for theses devices, for example Hitman: Sniper from Square Enix, mobile gaming is only set to grow. Smartphones and tablets are only going to become more powerful, enhancing the gaming experience on these devices. Couple this with comments made from Oculus Rift about being interested in mobile-powered virtual reality and the outlook for mobile gaming is surely set to be positive.