Conventional video gaming is undergoing a transformation driven by advancements in AI, mobile gaming, live operations (LiveOps), and data analytics, giving rise to innovative, player-focused revenue strategies. Fueled by these headwinds, the global video gaming industry is projected to soar from $206.6 billion in 2022 to $280.65 billion by 2029, growing at a CAGR of 4.5% for the same period. Consequently, AI-powered recommendation systems and personalized content are paving the way for dynamic pricing and microtransactions, allowing prices for in-game items to vary based on player behavior. Further, predictive analytics combined with customizable features like avatars and storylines are opening up exciting opportunities for in-game promotions and targeted engagement.
GROWTH OPPORTUNITIES IN THE SPOTLIGHT
- Advanced Personalization Algorithms: Creating highly customized in-game experiences based on player behaviour/ preferences.
- Enhanced LiveOps Integration: Utilizing AI for real-time data analysis and automated event management.
- Predictive Analytics: Using AI to forecast player churn and implement targeted interventions, like personalized incentives and tailored content.
For detailed growth strategies and expert perspectives, click here.
Amid this transformation, Frost & Sullivan’s recent Digital Content Services Think Tank delved into the fascinating realm of Emerging Growth Opportunities in AI-Powered Gaming Monetization.
Here, the following growth experts collaborated to share their views on transformation drivers, challenges, disruptive technologies, and emerging opportunities in the global video gaming industry: Elias Sandler, Co-founder and CEO at Kinoa and Dr. Tiran Rothman, Vice President and Growth Expert, Business & Financial Services at Frost & Sullivan.
Gain valuable perspectives from these experts by clicking here to access the recorded session of this Think Tank.
- Understanding the Evolving Video Gaming Ecosystem: The global gaming industry surpassed the $200 billion mark in 2022, overtaking the entire entertainment sector (including big companies like Netflix, Spotify, Comcast, and Sony). Going forward, mobile gaming is poised to account for about 50% of gaming revenues due to its accessibility, while console and PC gaming split the remainder (70% and 30%, respectively). Genres range widely, from hyper-casual, short-session games, downloaded/boxed games, browser games, to hardcore games and AAA games – What are the key segments within the video gaming industry and which of these present the most lucrative growth opportunities?
- Capitalizing on Growth Drivers: Target audiences for the gaming industry include high-value players aged 25+ with disposable incomes and easy access to digital payments on platforms like Google and Apple. Additionally, gaming is expanding as Gen Z and millennials embrace digital experiences and social gaming, with emerging technologies like the metaverse, AI, cloud gaming, and extended reality (XR) promising new virtual gaming possibilities.
- Harnessing the Potential of AI: AI is revolutionizing the gaming industry by enabling hyper-personalized, real-time gameplay experiences tailored to individual user behaviors. Advanced AI models, deep learning technologies, and generative AI (GenAI) have the potential to analyze playing habits to better predict player actions, optimize engagement, improve segmentation, and enhance player satisfaction through targeted, adaptive content. This fosters deeper immersion and loyalty, ensuring that gaming companies can keep their target audiences coming back – Which partnership strategies will help your teams supplement revenue pipelines with AI-driven gaming monetization?
- Strategies to Monetize Gaming Experiences: The gaming industry employs four primary monetization strategies to generate revenue. The traditional pay-to-play model involves players purchasing individual games upfront. Next come subscription-based models, where players pay a monthly/recurring fee for ongoing content access and exclusive features. Thirdly, in-app monetization and microtransactions are fast gaining prominence, increasing lifetime user value for gaming companies. Lastly, in-game advertisements present players rewards/bonuses in exchange for watching ads or allows companies to feature banners within games.
- Thwarting Growth Challenges with LiveOps: LiveOps (or live operations) involves managing games in real-time to boost engagement and conversions among non-paying players. By using psychology and personalized offers, gaming companies can create urgency and provide incentives, like exclusive deals, to encourage spending. Additionally, LiveOps helps providers tailor game difficulty, making strategic promotions to ease progression and prevent player frustration – How will you identify the right growth strategies and technologies to maximize gaming revenues in your organization?
In conclusion, as the gaming industry embraces cutting-edge technologies and innovative monetization methods, the potential for growth and player engagement has never been greater. For businesses, the next big opportunity lies in harnessing these advancements to build immersive, profitable gaming experiences that keep players coming back.
Click here to view the recorded session of this Webinar and unlock new growth opportunities today!
“Advancements in AI, LiveOps, and data analytics are transforming the gaming sector by driving player-centric monetization through dynamic pricing and microtransactions based on user behavior.” – Dr. Tiran Rothman, Vice President and Growth Expert, Business & Financial Services at Frost & Sullivan.
