No one can deny gaming is a pillar portal for brands to connect with Millennial and Gen Z consumers, and the high street is going ever more virtual as a result.
If you ask the person next to you if they ever play video games, most likely they will say they indulge in some gaming ever so often. I am “guilty” of such, too.
I remember when I lived in London and used to go to this gaming place around Shoreditch with my friends. The place was always packed, and you could tell the staff had learnt how to deal with customers in and out.
From Sonic to the League of legends, there were areas for everyone – individual or group. On top, food and drinks were served. What more could you have asked for?
My point is: gaming is a standard thing, a common presence in our lives, especially for those under 50, most of which grew during the explosion of the console, digital and graphic intensive games, and now immersive and super-realistic virtual worlds.
In fact, almost 90% of Gen Z are gamers, compared to 59% of the total population, according to Kantar research. Interestingly, researchers estimate the Gen Z purchase power to be around $44 billion, a still quite sizeable figure when taking into account that Gen Z-ers are only just about to make it into the job market.
With such a growing practice in our lives that is gaming, it is only normal that brands outside the gaming world start popping out of their world to embrace the gaming culture, especially the bricks and mortar businesses.
We have seen in-gaming advertising taking off, but in-gamming shopping is possibly one of the very first large-scale makeovers the gaming sector is embracing, because this goes beyond the gaming world, it massively changes our habits in the real world too.
From high end brands like Gucci or Louis Vuitton, the last two years saw a surge in beta launches of several in-gaming retailing experiences that are driving the digital fashion industry into a new world.
That world was in 2019 – notice this is even before the COVID-19 pandemic – worth $96 billion. That is right, the outfits of game characters – known as skins – amounted to 80% of the $120 billion spent on digital games that year, according to WGSN. Gaming is also predicted to surpass $200 billion by the end of 2023, so you can see what direction these trends are set to take.
“As the fashion industry increasingly collides with gaming and more of our lives are spent online, brands are beginning to design apparel with the digital world in mind,” says Matthew Poile, insights expert at WGSN.
“As well as being a form of in-game advertising that can encourage people to buy from your brand in real life, skins and virtual outfits have their own intrinsic value as digital goods.
Skins are a crucial part of the business model of the free-to-play (F2P) titles that dominate the gaming industry.”
Top 5 Asia Market Entry tips for Gaming companies
With the pandemic speeding up the growth of digital industries, gaming included, and with more than 2.7 billion players worldwide at the end of 2020, no one can ignore gaming platforms as one of the most effective avenues to reach large audiences in the 21st century, especially Millennials and Gen Z.
For luxury brands, gaming is proving to be the next chapter – after brick-and-mortar and online shops.
Annachiara Biondi, global markets editor at Vogue Business, writes that during the pandemic, enthusiasm is spilling over to luxury brands.
She says: “Gamers and esports fans are increasingly revealing themselves to be beauty and fashion consumers eager to spend on both in-game and real-life products, catching brands’ attention. Female gamers are on the rise, and gamers’ overall spending capabilities have increased, creating opportunities for brands to see this cohort as a marketable audience of potential customers.
“While data on the amount of actual spending on luxury and beauty within esports and gaming is scarce, the success of recent fashion and beauty collaborations signals the audience is ready to spend on these new offerings.”
Today, the billboards you would see in Milan during the Milan Fashion Week, can almost be replicated in the gaming world as more brands – even beyond fashion and in the beauty department - invest in these virtual worlds.
Moschino, Valentino, Marc Jacobs, Anna Sui, Net-a-Porter, Parfums Givenchy, Gillette Venus, Louis Vuitton, are just some of the household names that have released “gaming collections” that allow players to buy skins and beauty products. For example, Gucci has launched a $1,600 limited-edition watch in partnership with esports entertainment brand Fnatic.
Sports brands are also rapidly joining in. For example, Puma has signed four fashion deals with gaming companies in just two years, including Gen.G Esports, best known for the League of Legends. Such deals include for example, dressing characters with Puma merchandising bought in the gaming environment. Fast growing sneaker maker, Aglet, is also re-transforming the in-gaming shopping experience, through the creation of a new reality, the metaverse.
Gaming is becoming to fashion brands what social media was in the mid-2000s, and we will see the same market makeover and growth if not more. As social media platforms become more crowed and it becomes harder to stand out from the noise, fashion houses all around the world are looking for new ways of generating revenues, and gaming is proving to be one of the strongest bets.
Achim Berg, senior partner at McKinsey & Company, explains in his latest report that gaming platforms such as Fortnite or Tencent’s mobile game Honour of Kings, have fast become integral to youth culture.
“Fortnite has more than 200 million users and is free to play, but made a sizeable chunk of its $2.4 billion in revenue last year by selling avatar skins,” he explains.
It is no secret to anyone that Asia is home to the largest gaming market – both in user and revenue terms – as well as one of the fastest growing regions for gaming adoption as internet services reach the masses all across the continent.
The continent has historically been a fast adopter of new technologies such as online shopping and gaming, so it comes as no surprise that Asia is also at the forefront of in-gaming retail.
For example, in China, brands such as Mac Cosmetics, L’Oréal and Hong Kong jeweller Chow Sang Sang have all partnered with Honour of Kings, which has more than 200 million registered players of whom more than half are female - and women mobile gamers are 79% more likely to make an in-app purchase, says McKinsey & Company.
Astonishingly, the Mac and Honour of Kings partnership, which saw the launch of a limited-edition lipstick collection, sold out in less than an hour on Tmall in 2019.
“There’s a huge crossover [between genders and ages], especially given the continued growth of the female gaming community, as well as gamers integrating fashion, style and beauty into their streams,” Mark Jiang, Mac’s vice president of global commercial has told Vogue Business.
At HGC we see this world as not a trend, but as a fact and we want to help you build on it. We have created a robust portfolio that includes port to port connectivity, bandwidth and capacity to cope with any gaming requirements.
Whether starting or expanding in Asia or any where in the world, our global footprint is future proofed to cope with surges in demand whilst delivering the lowest latency rates, key to the gamer experience.
HGC acts as a network aggregator and single contact point for OTTs to reach end users very quickly as the infrastructure is well established with interconnection to local carriers, ISPs and MNOs.
This results in OTTs being able to reach a large number of users – or as we like to call them, eyeballs – in a multitude of geographies at the switch of a button. Check out for example our latest addition, Eyeball-as-a-Service (EaaS).
If you wish to learn more about how HGC can support your gaming business, feel free to contact us at email@example.com and we can chat through it all.
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