When I launched my 10X Accelerate Opportunity agenda back in March, I called out the massive creative and commercial opportunity that we are missing right under our noses: gaming.
We only need to look at headlines today to see that gaming is now the heart of every successful brand’s strategy. The PlayStation 5 is still in short supply around the world and still carries a 20%+ markup on StockX. Microsoft, having recently zipped past Apple to become the most valuable company, reported a 16% growth in their gaming division with the help of services like GamePass and an incredibly powerful XBOX generation. Even luxury brands are trying to get a slice, Louis Vuitton launched Louis: The Game, a mobile game celebrating their 200th birthday.
The recent news of Facebook being renamed into Meta, just adds fuel to the fire of an already growing global interest in the metaverse. For the brands that are immediately in the vicinity, like Nvidia -- we’re already seeing their stock jumping 11% after a reported 50% sales increase. Clearly, this higher demand for gaming is crucial to the future of building the metaverse.
But, under the fanfare, bullish investments, and popular culture reference lies a solid reason why gaming is not going away. We look to human behaviour to see why gaming has such a hold on us. We were born with an innate desire to play.
In Dr. Stuart Brown’s book Play: How it Shapes the Brain, Opens the Imagination, and Invigorates the Soul, he discusses how our innate desire to play is crucial to bettering the human experience:
Life without play is a grinding, mechanical existence organized around doing the things necessary for survival. Play is the stick that stirs the drink. It is the basis of all art, games, books, sports, movies, fashion, fun, and wonder—in short, the basis of what we think of as civilization. Play is the vital essence of life. It is what makes life lively.
As we re-emerge from almost two years of disconnection, gaming has become inextricably linked to how we connect again.
One particular element of gaming, gamification, is one of the ways that keep gamers coming back. Brands have a lot to learn about this dynamic.
Essentially, gamification is where elements of gameplay are applied to the ‘real’ world. Think challenges, leveling, competition, problem solving, but done IRL. Thanks to our always-on devices, we are able to capture and play with the data of our everyday lives. Now that more than a third of the UK own a smartwatch/health-tracker computing device, we have the opportunity to constantly play to better our wellbeing.
Gamification can also help us climb up the ladder of Maslow's Hierarchy of Needs. For example, one of the most successful examples of gamification recently can be seen in apps like Nike Run Club.
Runners (or should we say gamers?) get recognition from their family and friends when they complete a challenge. Kudos from friends, allow us to feel a sense of belonging and connection with them.
Constant positive reinforcement like celebrating streaks or time-based challenges helps boost our self-esteem. We feel accomplished when we complete a 30k or that March weekly challenge. It’s no wonder Nike Run Club has become the number 1 running app worldwide and has driven retention by 21%.
Another element of gamification is creating limited time windows to obtain goods. The hype-beast category are masters at this, but gaming culture takes it to a whole new level. In 2020, consumers spent $178bn on video games. 75% of the industry’s revenue comes from games that allow the sale of virtual goods, for example, powerups or clothes for players’ avatars.
In APAC, BMW worked with Honor of Kings to release a gaming character skin as part of the car launch in 2017. The BMW branded skin amassed 150 million RMB (~$22 million USD) worth of sales on its first day of launch in March 2017! We daresay this might have exceeded the launch day sales of the car itself.
When we are able to tap into the power of play and elements of gamification, it can absolutely supercharge a brand’s growth. By using nudges and positive reinforcement, brands can defend against brand declines, especially amongst younger customers. By creating social networks and time-limited promotions and challenges, brands can drive immense retention and higher RPU amongst customers. By creating limited-edition collectibles with high-profile games, there are natural opportunities to cross-sell and upsell.
It’s an exciting time for brands and, as their guides in this new world, agencies must continue to find even more creative ways to deepen connections with consumers.
Julian Douglas is Vice Chairman of VCCP and IPA President. His 10x Accelerate Opportunity agenda seeks to turboboost the industry from the inside out, centred around three key themes: IPA 10x (for the industry); THINK 10x (for wider society); TECH 10x (for gaming, AR and international collaboration).