The COVID-19 pandemic and the resultant stay-at-home orders have led us toward games as a channel to connect with friends and keep ourselves engaged. Consequentially, analysts have revised their estimates of the Gaming market in 2020 upward to $174.9 billion.

COVID-19 has undoubtedly changed our lives in many ways, creating new requirements and ways of doing things. Here are the five mega trends that are emerging due to the effects of the pandemic:

These key trends have made a deep impact on the gaming industry.

1.     Clusters of population across economic time zones

Worldwide, cities and large towns have grown as people flocked for employment. We will now have the emergence of “economic time zones”. Instead of cities and towns, people will now cluster around convenient locations, which fall within a time zone that is conducive to business.

The current major cities will determine what the economic time zones will look like. This implies dispersed talent and players. According to Pew Research, about 22% have already relocated due to COVID-19.

The adverse impact of lockdown has been cancellation of major gaming or eSports events worldwide. Gaming companies will need to consider the following:

• Talent - Meet employees and talent where they want to be. But ensure there are solid onboarding and collaboration mechanisms in play for employees to feel engaged.
• Mobility & player engagement - Players can be anywhere, meaning companies must invest in infrastructure to ensure zero latency and fast loading, without compromising on graphics or gameplay. 5G is expected to be a game changer here. According to a NewZoo report, by 2023, 43% of active smartphones will be ready for 5G, as opposed to 5% in 2020. Mobile gaming has been the fastest growing segment.
• eSports and streaming - eSports audience will continue growing at 10.4% CAGR, with about 45% being enthusiasts. While merchandising and tickets sales have dropped drastically by about 50%, digital and streaming see about 50% growth YoY.  

2.     Ownership and accountability

Several studies point to increased productivity in remote workers. Essentially, remote work requires people to have more context behind their work, which leads to ownership of their work and accountability for everything that is assigned to them. Those not living upto expectations will perish. Gaming companies will have to be more accountable towards communities in which their employees operate.

Gaming companies will need to redefine their organization structures to allow for new ways of working (work from studios, to work from anywhere).

• New ways of working will lead to leaner teams with less management control, as employees assume ownership.
• Gaming companies have proven to be resilient during the pandemic and many have reported growing revenue numbers. Given many are sitting on cash, expectations will be high on them to increase spending on corporate social initiatives for their local communities.

3.     Velocity of innovation

The pandemic has caused havoc with world economies with most countries reporting shrinking GDP and industrial output. Humans are known for their basic instinct for survival. This should trigger massive innovation in new games, new engagement models, business models, collaboration, supply chains and economies. Players have more choice (new hardware, new games continue being released). For employees, the velocity of innovation will increase the pressure to deliver.

Gaming companies will have to focus on the following to meet expectations from players and employees:

• To capture market share, gaming companies will have to invest in player engagement, stickiness, and influencers to improve new player acquisitions and help with new gaming features (game play and safety)
• Invest in AR/VR and immersive technologies to host large scale remote events. 73% of US gamers have used VR to play games. However, barriers to grow still exist with limited VR content and expensive handsets, and inability to play socially. This is the right time for “as a service” type business models
• Provide virtual studio for end-to-end game ideation, development, test and launch

4.     Independence and self-reliance for countries

Global supply chains have been tested in the past several months.

Countries/economies have been severely jolted by the adverse impact of global supply chain for foundational needs. Countries will start driving towards more economic independence and self-reliance for basic needs. Also, we will see the emergence of bubble economies, where the aligned countries trade and collaborate extensively.  

Gaming companies will need to reinvent across two aspects:

• Gaming companies dependent on hardware will have to readjust supply chains to account for new trade restrictions. Also, the need for data privacy, gambling rules, and “origin” of game creators is likely to go up (e.g. PUBG in India)
• Gaming companies will need to do more to include local flavors of games (e.g. RPG based on local heroes or icons) or esports (e.g. cricket in India), which will trigger new games, especially as emerging markets see more growth than North American and European markets. NewZoo reports that 54% of global players are in APAC and growing at 4.8% YoY. Latin America and Middle East/Africa also see >5% YoY growth.

5.     Deepened human connection

The pandemic forced a hard stop on people’s lives. And continues to do so. People will now be able to re-set and think of human-to-human relationships in a positive way. At larger level, people will become more inclusive within their communities and this will lead to true diversity. 

The ability to understand fellow humans at a more fundamental level, develop intimate (digital) connections will widen our belief system – foundational for inclusion and diversity. And gaming companies have a deep responsibility to foster diversity, inclusion safety in gaming.

Gaming companies need to consider the following:

• About 12% of gamers are less than 15 years. Gaming companies need to enforce strong rules to prevent child abuse, porn and profanity. Besides, players continue to demand more choices of characters that appeal to their belief system (color, sexual orientation, etc.). Gaming companies must hire people and source from suppliers to reflect true diversity
• About 19% have experienced fraud online. Building trust across the process and preventing fraud is important. Gaming companies should build a system that focuses on fraud prevention to deepen trust and improve conversion 

The future of gaming

Gaming companies are touching more lives now than pre-COVID-19 times and it is important to stay responsible, and build resilience and trust among players and communities. These trends have multiple implications for the gaming industry, which cannot be ignored in order to continue building new games, improve player engagement, and adapt and scale technology infrastructure.   

Wipro can help you build a resilient future and prepare for the new dynamic world of gaming. Looking for more information? Reach out to us at info.hitech@wipro.com .

About the author:

Arun Trivedi, based in our Mountain View office, is a partner and leader in Wipro’s Technology and Platform Products Group, where he focuses on software and gaming clients. He is responsible for guiding our experienced team serve our clients in software, ISVs and gaming sectors. Prior to this role, Arun has been Digital Transformation partner in our Technology business unit where he has helped clients design new business models, customer and business partner experience, solution offerings and GTM, employee experience, new-age delivery models leveraging the crowd and change management.