Social Gaming – How It’s Changing The Gaming Industry

The gaming industry as we know it today has a couple of key innovations to thank, namely the television, the home PC, a string of key consoles and by extension game designers, and lastly, the smartphone. There are of course other candidates that deserve their due, but if examined from a cursory glance, the above-mentioned list of contributors is more than enough to suffice.

Television’s rise in the 1970s brought about gaming giants like Atari. Nintendo picked up the pieces of the 1983 video game crash and practically re-wrote the book on games publishing. Imagine anyone trying their hand at spread betting on gaming company stocks during that volatile period? For a while Sega had it’s time in the sun and since Sony entered, it’s never left. Microsoft left the comfort of the PC environment to enter the competitive world of the console and once Steve Jobs unveiled the first iPhone in 2007, things would never be the same again.

All these forces combined have led to social gaming and in turn, the impact it has had and continues to have on our lives. The gaming industry itself has also changed tremendously as a result of the rise of social gaming.

It’s not just for kids or hardcore fans anymore

For a very long time gaming was a niche market consisting of kids and enthusiasts, or hardcore gamers if you will. Conventional wisdom would dictate that the console was the domain of children and enthusiasts while the PC market was mainly for the latter.

Who could forget the adventure game concept birthed by gaming pioneers like Roberta Williams (King’s Quest), Al Lowe (Leisure Suite Larry) and the cats at Lucas Arts (Day of the Tentacle). While it would be hard to dispute a complete lack of adults in this world, it’s safe to say that their contribution was relegated to providing the purchasing power required for the attainment of these games. In other words, they bought the games for their kids.

Parents looked on in joy and dismay as their wallets were emptied out while their children benefited gleefully. If ever there was a device that would change the demographics, it was the iPhone. The origin of social gaming as we know it today has this device to thank. From it eventually came the smartphone, the Android operating system and a simply massive proliferation of usage. Apple’s iTunes and Google’s Play Store have birthed an entirely new industry and with it, and entirely new business model.

Looking at the numbers

Gaming revenue for 2020 paints quite a clear picture of how the landscape has been transformed. The smartphone dominates with browser-based PC gaming coming in unsurprisingly at last place. To be more specific, revenue share for 2020 placed smartphone games at 43%, console games at 29%, downloaded/boxed PC games at 20%, tablet games at 6% and browser PC games at 2%.

Not only have more adults become part of the picture thanks to the rate and manner in which smartphones have permeated most people’s lives, but the revenue model has also changed – a direct result of social gaming. Nowadays gaming profits are mainly derived from in-store or in-app purchases, also known as microtransations.

Microtransactions take the form of casino chips, vehicles, weapons, and essentially anything designed to help the player progress. Such purchasable amenities are used in both free download games as well as ones that players actually pay for, and thanks to the small costs that players incur, this revenue model is proving to be quite profitable. The addition of social attributes, reinforced by 2020’s global pandemic, and seen in features like player lounges and virtual concerts will only further solidify social gaming’s grasp on the larger segment of society.

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