The Drums | Activision Blizzard’s Head Of Business Marketing’s Top 5 Predictions For 2023

As marketers wake up to the fact gaming isn’t to be ignored, Jonathan Stringfield outlines how the space will evolve this year and where attention needs to be directed.

Whereas 2022 signaled a partial return to social normalcy given waning concerns around the pandemic, we enter 2023 with economic abnormality looming. Soaring inflation, crashes in the technology industry and the threat of a more durable recession have caused the broader consumer, marketing and technology landscape to adopt a less optimistic outlook.

And yet, as was the case during the depths of the pandemic, an otherwise negative set of circumstances allows us to look at sectors such as gaming in a new light. The immense levels of attention directed towards gaming in recent years was a much-needed wake-up call for marketers who realized that gaming could not be ignored, the subsequent evolution over the coming year will demonstrate that it is not going anywhere.

1. Return to growth

Technology research firm NPD has continuously forecasted a decline in consumer spending around gaming hardware and accessories, which has been construed as an end to a pandemic-gaming boom. While it is certainly true that consumers spent more on gaming during the height of the pandemic, reductions in spend may stem from a number of factors: broader macroeconomic pressure from a potential recession, mixed availability of the latest generation of consoles and premium computers GPUsand a number of high-profile game releases facing delays due to development issues related to the pandemic.

Regardless of the cause, this slowdown is largely being viewed as a temporary correction and the gaming audience on the whole continues to grow. A number of highly anticipated titles and more general availability of gaming devices in 2023 will mark a turning point for the industry, putting it back on a consistent growth trajectory even while consumer spending may be otherwise strained. While gaming is not recession-proof, the deep levels of fandom within gaming allow the industry to be extremely recession-resilient.

2. Gaming goes Hollywood

The quantity and quality of TV or film adaptations have been increasing in recent years, with some 25 feature-length films and almost 30 TV adaptations announced or in some form of production. We may be on the cusp of a break-out year for video game adaptations, with two of the most anticipated projects scheduled for release in 2023: The Last of Us TV series on HBO Max (based on the game series of the same name) and The Super Mario Bros Movie in theaters April 2023. While such adaptations are becoming increasingly common, what has changed in recent years is the extent to which these projects now stay true to the source material, given that past reinterpretations for TV and movie audiences have led to some infamous flops (including the last time Super Mario Bros was on the silver screen).

With traditional media providers increasingly leveraging gaming IP or shoring up capabilities to make games themselves, such as Netflix establishing new gaming studios, the potential for transmedia (where a story is told across multiple forms of media) across gaming and traditional video becomes that much greater. Marketers who are intimately familiar with advertising on TV or movies may find themselves becoming acquainted with gaming whether they like it or not.

3. VR unready

Every year we’re made to feel like we’re on the precipice of VR becoming mainstream, and every year it simply… doesn’t.

The 2021 Holiday season featured great deals on VR headsets, stocking expectations for a breakout year in 2022, and yet the 2022 holiday season only has the same hardware to offer… but this time with some games packaged in. In many respects, packaging games with headsets is a much better way to drive consumer adoption than a temporary sale.

More powerful hardware and attractive price points will help, but all the metaverse hype in the world will not propel VR to critical mass with consumers. The potential for VR and the metaverse face the same roadblock: Without compelling content, even the best technology in the world will fail to attract meaningful attention.

Moreover, in both the case of VR and metaverse, gaming represents the best and most viable experiences within these respective technologies. The most meaningful advancements in emerging technologies such as VR or metaverse won’t come from those specific technology sectors, so much as the games industry.

4. Decrypt esports

The crypto world had a very, very bad 2022: The year began with historic scams in the NFT/web3 space and will be ending with a broader crash in cryptocurrencies due to a number of crypto exchanges failing. While more direct efforts such as blockchain-powered games will continue to soldier on in search of a hit, propped up by a massive influx of VC dollars amid broader industry turmoil, the more tangible effects of the long crypto winter in gaming will be more subtle .

A number of esports stakeholders have relied on sponsorship money from the cryptocurrencies industry, who were interested in esports for the same reason as any other marketer: The audience is largely young, technologically savvy men who are difficult to reach through more traditional media. Lacking the same revenue levers as traditional sports, esports has become particularly reliable on sponsorship dollars and the pullback of a major industry will continue to challenge monetization.

This short-term pain may develop into long-term strength in 2023, as the esports the industry is challenged with pushing innovation towards more revenue models, lacking funding from potentially unstable partnerships.

5. A new era

If 2022 began as a year where attention towards the gaming industry reached new heights, 2023 begins as a year where the biggest trends in gaming represent inflection points: new trajectories for industry growth, a potential diversification of revenue models in competitive gaming, and increasing visibility for gaming across a wide variety of media.

While the trends identified above are those which are most likely to have a more immediate impact on the industry in 2023, they are far from exhaustive. Longer-term shifts in gaming will continue throughout the year: the inevitability of cloud-based gaming where gaming content can be accessed on any device, multi-platform and mobile-exclusive releases of formerly PC or console-based IP, and the increased utility of gaming engines for world-building beyond making games.

Although marketers are largely in the early stages of engaging with gaming in a serious way, drawn by the potential to connect brands with a broad and deeply engaged audience, the savviest marketers will realize that understanding gaming provides a unique perspective on technological and business innovation.

Jonathan Stringfield is the vice-president of global business research and marketing at Activision Blizzard.

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