Category: Video Game

Indie Games: Everything You Need to Know

This is Gameopedia’s Game Terminology and Taxonomy series, where we talk about the different kinds of game categories and aim to give our audience in-depth knowledge about them. This blog covers everything we know about Indie games.

Like we mentioned in our previous blog about AAA games, the classification of games is done based on their budget, scope, and other factors. While these classifications aren’t formalized, they are still useful for game developers and publishers for marketing and e-retailers for categorizing game pages. Customers also gain invaluable information about the potential of a particular game. An important subclass of games are indie games, which have gained huge popularity over the past few decades.

 

What is an Indie Game?

Indie game stands for independent video game. The phrase ‘indie game’ is based on similar ones like independent films or indie music. It is a video game that’s usually made by smaller development teams or even individuals on their own without financial or technical support from large game publishers. This is a direct contrast to AAA games. The indie term is also applicable to games which have creative freedom even if they’re funded by publishers.

Indie games are often very innovative, experimentative, and explore games as art. They can afford to take risks which aren’t taken by AAA games and are unique. They are usually sold through digital distribution channels as a result of lacking publisher support. Indie games have become even more popular over the last two years, going by the increased number of indie releases and the higher price they demand on Steam, arguably the biggest marketplace for indie titles.

Indie Releases in 2021

Here are the stats for indie games released per month for the year 2021.

Those being released over the course of 2020 saw a pretty significant increase of about 25 percent from the previous years, mostly as a result of the pandemic. In 2021, the increase continued, at a YoY rate of about 11 percent compared to 2020’s releases. 

The overall ratings for indie games were also higher this year. In a massive industry like gaming which generated about $180 billion in 2020, while indie games might not have the biggest slice of the pie, they’re still important to the industry.

A key reason for this is that indie game developers are often free of a lot of constraints and pressure for the game to follow popular trends or genres. Indie games tend to be innovative and explore video games as a work of art.

What Makes a Game Indie?

While there is no standard definition for games to be classified as indie, they usually share certain characteristics. These are:

Independence: Indie games are either financially or creatively independent. They are funded themselves or from sources like crowdfunding, and even if they have a publisher, their game has been made without too much influence from them.

Team size: Indie games are often developed by individuals, small teams, or small independent companies which are formed to develop the game. A great example of this is Undertale, which was made by one developer: Toby Fox, who wrote the story, programmed it, and even created music for it.

 

Undertale: A masterpiece programmed by just one person: Toby Fox.

Budgets: Indie games are made off of smaller budgets which are usually from the pockets of their makers or from crowdfunding. 

Creativity: Indie games are usually noted for their innovation, experimentation, and creativity. Limited graphics are often compensated for by gameplay innovation or unique narrative styles. 

Some notable examples of indie games are Transistor, Minecraft, Subnautica, and Celeste.

 

The History of Indie Games

The phrase Indie Game started being used commonly around the early 2000’s. Before that, they were termed as amateur, enthusiast, or hobbyist games. One of the first known examples of an indie game is Spacewar! which was released in 1963 but there is still some debate as to which is the first indie game. 


As personal computers became increasingly prevalent, their availability, as well as easily available BASIC source codes for games, encouraged several people to start making their own games. Around the 1980s, playing a new game could be as simple as coding it yourself using magazines. One of the most popular games during this period was Football Manager, where the designer,
Kevin Toms used his knowledge about football management and board games along with the new technology to make a game– right from his bedroom! However, with this onslaught of games being made, it was harder and harder for them to sell them. An indie developer would either have to publish their game by establishing their own publishing company which was expensive or find a distributor willing to publish it, both of which were difficult. They started giving away pieces of their game in magazines and the like, where if gamers enjoyed the game, they could pay for the full version.

Doom's shareware text was rather provocative, and certainly did the job of selling it.
Search and Destroy's more traditional shareware text entreating players to purchase the full version.

With shareware proving to be a good way to sell and distribute games, especially with Doom proving its massive success, it became a platform for mainstream devs as well. Eventually, with the internet becoming commonplace, digital distribution took off. Game engine developers started offering their software at low or even no cost for indie programmers, and open source libraries also helped them get started. Indie games also began being seen as artsy and innovative. Social and political movements started using indie games to send messages. With Steam taking off and their Greenlight program (which despite being a bit opaque and awkward, still helped indie games), as well as Xbox, PlayStation, and the iOS store making game development on them easier, indie developers had a place to sell their games as well to the rest of the world. With Steam Direct replacing the Greenlight program, Steam became a haven for indie games.

However, around 2015, the perception of indie games began to change. More and more people in the game industry began worrying about an oversaturation of lackluster indie games as a result of how easy it was to make and distribute them. Digital platforms were overcrowded and it was hard for games to gain visibility even if well made. This is still a worry for some but indie games are nevertheless adored by the gaming community for the unique games they bring to the table.

Finally, indie games constantly raise the bar when it comes to innovation. An important result of this is that a lot of the ideas of these games, if successful, are adopted by AAA and AA studios and eventually become mainstream. For example, Frictional Games made Amnesia: The Dark Descent, then Penumbra: Black Plague. Released in 2008, the latter was one of the first survival horror games that focused minimally on combat, ensuring the player felt a real sense of fright when they couldn’t fight their adversaries in game. This game, while revolutionary and successful, did not have the polish of a AAA game. Alien: Isolation, published in 2014 by Sega had a similar concept where a key focus was to get through the horror game without resorting to combat.

 

Penumbra: Black Plague's eerie gameplay contributed to a whole new generation of horror games.

Another game we can take as an example is Player Unknown’s: Battlegrounds (PUBG). Upon this indie release’s stupendous success, several AAA games with similar concepts started coming out like Fortnite, Apex Legends, and Call of Duty: Warzone. Indie games like Undertale which focused on the player’s choices and characters had a similar ripple effect on RPGs and how player choices can affect in-game relationships and even endings.

Factors Involved In Developing an Indie Game


When it comes to developing indie games, many areas of game development are similar to other types of games. The main difference is how a game being developed doesn’t require a publisher.

Size of teams: Indie development teams can range from a small team of developers of up to a few dozen to just a single person. Several famous indie games like Axiom Verge, Undertale, and Papers, Please were all made by a single person.  Indie games come from many directions. Student projects can turn into future commercial projects for students to work on, or experienced developers can feel creatively burned out and leave to pursue their ideas. Sometimes, indie developers can also be amateur with little experience in the gaming industry and they often have more new ideas and freedom. Usually, indie studios comprise of programmers and developers- game art and music are often outsourced.

Building an indie game: Indie games usually use existing game engines and development kits to build their games. Commonly used engines include Unity and Unreal Engine. Indie developers also tend to use open source software which is free to use but not as advanced technically as their commercial counterparts. When it comes to indie game development for consoles, before 2010, it was extremely difficult. This was a result of software development kits (SDKs) for the consoles costing several thousands of dollars and also having lots of restrictions. Indie developers were usually unable to acquire them. As indie games became more popular though, console manufacturers and mobile device OS providers started releasing special SDKs to build and test games. These were still expensive for larger developers but reduced rates were provided for those who self-published their games on the console or mobile device’s storefront, such as the iOS SDK.

Involvement of publishers: Most indie games lack a dedicated publisher. However, several publishers focusing on indie games have arisen, and they’re called boutique game publishers. Examples of these are Adult Swim Games, Annapurna Interactive, and Raw Fury. These publishers who are themselves experienced in developing indie titles usually provide the necessary monetary support and marketing but don’t interfere in the creative direction of the game.

Finances: When it comes to funding, indie developers don’t usually have a publisher to help them out. New developers especially need to bootstrap, take out loans, or use crowdfunding campaigns to get the funds they need. Another method used is the early access model where interested parties can purchase a beta version early, and get access to the full game later for free, as well as other perks. In recent times, there have been funds established like the Indie Fund where developers can submit grant applications and get seed investment funding. Finally, publishers like Epic Games sign exclusivity deals with developers for certain durations, and the game developers get funding to finish making the game as well as higher cuts of sales revenues. 

Distribution: Before digital distribution platforms gained traction, programmers gave copies of their game to local computer stores to sell. They also placed advertisements in magazines and fulfilled mail orders based on that. Later, the shareware model came out and became popular with releases like Wolfenstein 3D and ZZT. As the internet became the major means of distribution, the mail order method started dying out. Valve originally made Steam to help players update patches for their games and keep them in the loop about updates. It eventually evolved into a digital store for games. Steam began curating indie titles among others, eventually adding Steam Direct where any developer could add their game to the platform for a small charge. 

Recognition: Indie games have a fraction of the marketing budget of AAA games and thus, it is harder for them to be widely known. However, indie games targeted towards niche markets tend to do well. As for industry recognition, several events and awards have been established in the past two decades such as the Independent Games Festival. Indie games have also been nominated alongside AAA games frequently, with games like Hades and Outer Wilds walking away with major Game of the Year awards at BAFTA 2020 and GDC 2021 respectively. 

Hades won awards from almost every major game-related publication or organization, and even those not focused on gaming!

Indie game jams are also a thing, with annual competitions where game developers are asked to design a game prototype based on a concept and preset requirements.

Hades is also the first video game to win a Hugo award, an annual literary award for the best science fiction or fantasy works of the year.

Genre Trends of Indie Games: 2016-2020 Detailed Analysis

This graph showcases the major variations in genre trends across the last five years related to Indie games.

Indie games feature the most amount of releases for the Puzzle genre, where it consistently features in the top 3 or top 5. Puzzle games don’t need to be as graphics-intensive or have a complex setting. They’re more about gameplay and engaging their audience, and thus, easier for smaller studios to make. 

The Platform genre is one of the oldest genres in the industry. However, of late, the genre is fast disappearing from AA/AAA titles, and has found a new home among the indie scene. This genre always features in the top 5, with the total percent of releases falling between 9 – 12% each year. Some popular platform games released recently include Super Meat Boy Forever (Platform, Action), New Super Lucky’s Tale (Platform, Adventure, Action) and Celeste (Action, Platform). This is an interesting trend: if you look at these games, they’re intuitive, easy to understand while challenging to master, and have very unique art styles. While they aren’t always as technically groundbreaking as releases from bigger publishers tend to be, they nevertheless satisfy the most important rule of game-making: they’re fun!

The Future of Indie Games

There is an evolving trend where some AAA publishers have been acquiring indie studios around the world. Between 2016 and 2020, at least 76 indie studios were purchased and the number of them being bought per year is increasing, going from 7 in 2016 to 31 in 2018.  In 2019, THQ Nordic announced they raised $225 million to acquire more studios. Even Netflix has gotten on the bandwagon with their acquisition of Night School Studio in September 2021.

But why are they buying them? Acquiring pre-existing studios is cheaper than building one from nothing. You also get experienced employees along with their intellectual property. An example of this would be EA buying Respawn Entertainment and getting Titanfall. They also buy studios making games they think might be huge, such as Sega’s acquisition of Two Point Studios right after they released Two Point Hospital. Several AAA companies have indie initiatives like EA Originals and Take-Two’s Private Division which let them find nascent creators before they become popular and by extension, expensive. True, they also provide opportunities to indie developers but it isn’t purely out of the goodness of their hearts. AAA studios acquiring indie ones is a win-win: the former get a studio of experienced professionals and the latter get financial security and stability. However, this may come at the cost of what makes indie games indie: their independence.

AAA publishers have been proven to be highly averse to taking risks, and it’s likely that they might use these studios to push out content they think will make money, rather than what they originally wanted to make. Another restriction would be games made by these studios being exclusive to a particular platform. For instance, Microsoft allows The Outer Worlds on the PS4 right now as a result of prior commitments from the platform, but future games will likely be released only for the Xbox and PC. The culture of these companies also changes. The way AAA publishers might treat their new employees is an issue as well. A case of this is Disney closing down LucasArts after getting the Star Wars license because they didn’t want to make games, then farming the license for future games over to EA.

The issue is that when independent studios who’ve made famous games get acquired, they carry heavy expectations about their future games. While they have bigger budgets and access to better technology, they also have to sell massively and perform well. This reduces the likelihood of risk-taking and innovation. These studios are also put to work on projects of their acquirers and their own creative ideas are often put on hold, such as Firewatch’s creator  Campo Santo, who was acquired by Valve, having to put their next game, In The Valley of the Gods, on ice because they were working on Dota Underlords and Half-Life: Alyx.

In the Valley of the Gods has been delayed majorly with no release date in sight as a result of their creators being busy on other projects after being acquired.

It’s safe to say however that indie games aren’t going anywhere. The chief reason for the increase in the number of games released in 2020 despite several famous games like Deathloop and Kerbal Space Program 2 being delayed were the number of indie releases. The working from home situation which came about as a result of the pandemic has not only let developers spend more time on their projects but also let more people who are hobbyist game developers work on their pet projects.

This increase in releases hasn’t just come from low quality projects made by amateurs though. Looking at the prices of the games released in 2020, the average price has gone from $6.3 in 2018 to $7.7 by the second half of 2020. The average reviews for these games are also higher than those released in the previous year, with 78% positive ratings. January 2021 continued this trend, with 756 new games being released, a 17% YoY increase.

Indie games have always been important because of how they push the envelope. This spirit is only growing, and indie games will always have a key role to play in driving the industry forward.

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The Problem with Video Game Recommendations and How the E-Commerce Industry can Improve Them

Have you ever browsed through what seemed like Steam’s entire catalog trying to find a game you might like? Have you spent more time on Netflix trying to decide what you want to watch as opposed to watching something? These are problems most of us have faced or are facing, and are a result of several factors, especially lack of personalization.

Personalizing your products for your customers is critical in today’s world. One can see an average increase of 20% in sales when using personalized experiences. Companies want their customers to be aware of how they are catering specifically to user needs. For example, if you’ve played a shooter game, you might be recommended to play another just because other people who liked the first game you played also enjoyed this. Your reasons for playing the former might differ from the others and thus, the latter might not be a good fit for you. The lack of good video game recommendations reduces trust in these companies to provide a good service experience. 

From the companies’ end, good customer experiences help in generating income, as well as differentiating themselves from the competition. An e-commerce company needs to focus on three things to thrive:

  • Increase the acquisition rate of new users
  • Increasing conversion rates of your users
  • Ensure that users don’t leave (reduce churn)

The Importance of Recommendations

Personalization has become a major factor in the success of e-retail companies. Whether it is addressing customers by name in communications or providing them with special offers based on their interests, online stores are increasingly focused on improving this.

Recommendations are the deepest level of personalization and are a necessary feature to be added to their portal. They are integral for both customers and the companies which cater to them for a multitude of reasons we will look at. For a customer, they provide the following benefits:

  • A significantly better user experience
  • A sense of being understood and seen
  • More personalized benefits and deals

For companies, the benefits are just as tangible if not more so:

  • Improved customer engagement
  • Significantly increased customer retention
  • Larger levels of web traffic
  • Better sales and revenue

Below are some examples of companies that thrive based on their recommendation systems.

 

Case Studies

Let’s take a look at one of the world’s most successful companies, Netflix. While Netflix started as a movie rental service, today, they stream movies and have over 200 million paying customers across the globe. A key part of this evolution is their personalized recommendation system. 

Understanding Video Game Recommendations: Netflix's Recommendations
Netflix's recommendation system suggests a variety of content you might enjoy.

Netflix’s recommendation systems have been developed over years by hundreds of engineers after analyzing millions of users. When a new subscriber joins, Netflix asks them to pick shows/movies they like, and as they watch more over time, the suggestions are powered by these as well as some additional factors like:

  • Viewer history
  • Viewer ratings for prior shows
  • Information like title, genre, category, and more
  • Other viewers with similar preferences and taste
  • Time an episode/movie lasts vs time duration of a viewer watching a show
  • The time of the day you’re watching
  • The device on which you’re logged in

Closer to home, we have Steam, which is a digital game distribution system, with more than 120 million monthly active users and a catalog of over 50,000 games. It is also home to a powerful video game recommendation system that helps gamers find games they will love.

They recommend games based on your played games, purchase history, store browsing history, and games that other players with tastes similar to yours love.

 

Understanding Video Game Recommendations: Netflix's Recommendations:Steam's Recommendations
Steam's recommendations are based on a variety of factors like games you've previously played, browsing history, and the like.

However, neither of these do a perfect job. Let’s look at why.

The Problems with Recommendations Today

We’ve looked at the importance of personalization and the role recommendations play in this. However, despite online stores realizing how vital a good quality recommendation is, they still haven’t perfected the art of suggesting the right products. Here are some of the common problems faced by customers while trying to find what they need.

Wrong recommendations: Thanks to imperfect algorithms or lack of high quality data, sites can often suggest irrelevant or incorrect recommendations. These reduce customer trust, engagement, and overall, is a waste of a good opportunity.

Impersonal communication: We all buy products and services for a variety of reasons. However, distributors still use generic and non-engaging messages most of the time while communicating with users. Messages such as “You might like Item X” without mentioning why you might like it can turn your customers off.

Choice overload: Too much choice can be a detriment to your customers. A recent consumer report discovered that more than half (54%) of consumers have stopped purchasing products from a brand or e-retailer website because choosing was too difficult, with 42% admitting to abandoning a planned purchase altogether because there was too much choice. These problems are a result of sub-optimal recommendation systems on websites.

 

Behavior Vs Motivation

The reason for inadequate online recommendations is that these mechanisms are primarily driven by behavior as opposed to motivation.

If several people play the same game, they might do so for different reasons. Let us take one of the most popular games which came out in June 2020, Valorant, as an example. Valorant is a 5v5 tactical first person shooter (FPS) where the characters you play as (agents) all have unique abilities. It has a monthly player base of at least 12 million throughout 2021, making it one of the most popular current FPS titles. Let’s analyze the different possible motivations that drive people to play Valorant:

Satisfying the urge to compete, dominate, and win: A large number of people play video games to compete against other skilled players and dominate the leaderboards for a sense of achievement. Valorant has this in spades with its highly competitive online multiplayer nature and detailed rank progression.

 

Strategizing for the win: Gamers enjoy certain games because they involve a great deal of planning and strategizing to be victorious. With its deeply tactical nature, Valorant satisfies this motivation.

To play with friends or meet people: A significant portion of players like games for their socialisation aspect. Whether it is being able to play with your buddies, meeting new like-minded strangers you can have fun with, or working as a team, Valorant fills these socialization shoes very well.

Current state of product recommendations
Nothing hits the mark like playing games with your squad.

For an adrenaline rush: Gamers often get motivated by the rush of adrenaline or dopamine they get as they play games that excite their senses, and this is what keeps them coming back to the game as well. Valorant certainly fits this criterion.

Aggression: Some people like playing video games for the violence and ferocity that come as a part of the game, especially shooters and hack & slash games. Valorant satisfies this urge.

The behaviour here in common is people playing Valorant. However, as you can see, their motivations may be completely different. For instance, in terms of story and lore, Valorant is found lacking compared to Overwatch, another popular competitive multiplayer title. Thus, people who play Overwatch because they like its lore and narrative aspects might not be as interested in Valorant.

How can you Improve Video Game Recommendations?

Gamer motivations are a culmination of their emotional and psychological makeup while also covering traits like values, personality, and life situations. To revolutionize video game recommendations, you will need to start by understanding the games you’re recommending, and why people play them. Next, look at your user base and try to understand each individual at a fundamental level. Finally, once you have an understanding of the games as well as your user, see why people play what they do, and use that to provide a video game recommendation. As a result of this, you will:

  • Provide fewer recommendations: This will keep you from overloading your customers with choice.
  • Give better recommendations: When you understand your users’ motivations, you can suggest games that are aligned with their motivations every time.
  • Personalized recommendations: Each of your recommendations will effectively communicate why a particular game is right for your user, as well as address their needs.

Apart from the above, you can improve e-retail personalization in general by:

  • Refine your search pages. You can use metadata to improve product descriptions and make it easier for your algorithms to match products to customer preferences and needs.
  • You can use referral bonuses to improve signups and good email marketing that conveys personalized deals and offers to your customers to increase retention.
  • Ensure your home page, product pages, and promotional offers are tailored to your customers’ needs based on data you’ve collected and their preferences. 
  • Intelligent machine learning algorithms combined with high quality data are your best friends. The next section will go into detail about recommendation models you can use in conjunction with them.

Recommendation Models

Below are the models most commonly used by e-commerce companies:

Popularity-based: These are products that are best-selling currently. For example, Among Us blew up in 2020 and was a game that popped up on Steam’s bestseller list. These also include games that have been popular for a long time, such as Counter-Strike: Global Offensive. It is meant primarily for new users on the website.

Quality based: The games which have a high number of positive reviews and ratings show up here based on this model and are recommended to users. However, this might not be the best method as peoples’ tastes can drastically differ, and a game might have ‘boosted’ reviews. Also, newer games might not have enough reviews to show up, despite possibly being something your user might love.

Content-based: This model recommends products based on their similarities with other products. It leverages the description and content of items and an understanding of the user’s consumption history. For example, Valorant is recommended to players who love Overwatch and Counter-Strike: Global Offensive, since it has similar characteristics to both these games.

Collaborative Filtering: In the newer, focused sense, collaborative filtering is a method of making automatic predictions (filtering) about the interests of a user by collecting preferences or taste information from many users (collaborating).The system generates recommendations using only information about rating profiles for different users or items.

Of course, hybrid recommendation systems which use a mix of these models are your best bet to provide personalized recommendations to your customers. Going back to Netflix, they make recommendations by comparing the watching and searching habits of similar users (i.e., collaborative filtering) as well as by offering recommendations that share characteristics with content that a user has rated highly (content-based filtering). 

Metadata is crucial to fuel understanding of your products. This will help you organize your product database, as well as categorize it better. High quality and comprehensive metadata gives personalization algorithms more data to train on. If you want to know more about the importance of video game metadata and managing it, this blog might help you.

Conclusion

Personalizing recommendations is the best way for e-commerce companies to improve revenue as well as stand out among their competitors. When it comes to video games, understanding the motivations as to why people play the games they play is integral to making good suggestions. Gameopedia’s quality-checked and extensive metadata as well as our intelligent sentiment analysis tool can help with optimizing your content and website for better personalization and improving video game recommendations. Contact us to learn more about what we can do for you and your business.

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Digitisation: How it’s Changing the Landscape of Video Games

Until recently, the most common method to get a video game you wanted to play was to buy a physical copy of it. However, things have been changing- digital sales of games have overtaken retail games sales. Now, as well as in the future, the digitisation of video games is both the meta as well as the future of gaming. Analysts have estimated that video game revenue will come from almost entirely digital sources as early as 2022.

This can be mainly attributed to digital distribution platforms such as Steam for PC games, or online stores for consoles. Let’s take Steam for instance. It hosts thousands of games from publishers ranging from giants like Bethesda and BioWare, to small indie developers. Not only does it have a variety of digital games though, it also offers regular sales and special events where any game publisher can be sure of selling a large number of copies of a game. 

Digitisation of video games
Steam sales are an excellent time to grab those games you covet at insane prices. Source: Donklelephant

Any good e-retail stores do the below things excellently:
– It provides customers with a great deal of choice, and lets them buy and play these games almost instantly.

– It personalizes the product recommendations to its users based on their preferences and prior purchases.
– It incentivizes them with amazing discounts as well as in-platform rewards.
– It promotes engagement with features like game badges and achievements, friend lists, chat, and more.

 

Apart from benefits for customers, retailers also see the advantages of going digital. They save a significant amount on overhead costs, as well as worrying about unsold or damaged merchandise. Games reaching their target audience has improved significantly as a result of digitisation. The increased access people have to fast internet speeds has widened audiences across new demographics around the globe.

Finally, in the last year and half as a result of the pandemic, gaming as an industry has surged to unprecedented heights. For example, Sony’s fiscal quarter for 2020 began in April as the lockdowns were being implemented globally. Their customers, suddenly house-bound, caused digital sales to make up an astounding 74% of total sales for that quarter, a huge rise from the 59 percent of the previous year. 

Statistic: Digital download ratio of Sony PlayStation gaming software unit sales worldwide from fiscal 1st quarter 2019 to 1st quarter 2021 | Statista
Source: Statista

Advantages of Digitisation

Digitisation comes with a lot of advantages, which we go into below:

– Convenience and ease of access: If you wanted a game ten to fifteen years ago, you would have to visit a physical store, find a copy of the game, and buy it. There were several possible problems, ranging from damaged discs to the game simply being out of stock, as well as the time taken to track down and buy the game. It is also less convenient to store and transport these discs- this is an added cost to the retailer. In today’s digital era, digital games can be bought online by customers with just a few clicks. These platforms also hold a huge variety of games, far more than most physical stores can stock. Further, customers can download and install these games across multiple setups and devices, since they’re tied to an account.

– Personalization: Keeping track of what your customers are buying and playing from your online store is made considerably easier by digitisation. By understanding their preferences and interests, e-retailers can recommend games which are personalized to their customers’ interests.

– A continuously improving game experience: Developers and publishers can gain analytical data about how players engage and interact with their games and also use data tools like sentiment analysis. This helps them to continuously improve and fine-tune their products, ensuring their customers keep getting a better experience going forward.

– Lower costs for customers and retailers alike: E-retailers save a great deal of money by not having to invest in physical stores, cutting out the middlemen, and not having to worry about damaged merchandise, and these cost savings are transferred to the end user. As a result, customers often get great discounts and offers on platforms like Steam during holiday sales and promotions, and even free games on platforms like GoG and Epic Games.

Disadvantages of Digitisation:

It isn’t all positive however- like any industrial transition, digitisation has its costs. Let’s take a look at them:

– Games disappearing forever: If a game is very old, it might not have a digital version of it available. Once taken down from stores, it might disappear forever. An example of this is SimsRefinery- it was lost for decades until someone ran across a floppy disk of the game and made a digital copy of it. Only the existence of a physical copy made its rediscovery possible. This risk also applies to indie games- most of them exist only digitally and if these are removed from e-retail stores, it can lead to them disappearing.

– Data security and protection: As a result of digitisation, a customers’ personal and financial details are often if not always linked with their store accounts, which leaves them vulnerable to data breaches. Whether it is a company accidentally publishing customer details or malicious attacks by hackers, one’s details stored online are always vulnerable to theft or exposure. Companies need to continuously update and upgrade their data security measures to ensure their customer data is safe.

– Closed Platform monopolies: Something to be wary about is the rise of e-shop monopolies on closed platforms. Less competition results in increased prices and stagnant online shopping experiences. Digitisation increases the likelihood of consumers shopping at a platform’s exclusive online store, resulting in higher costs for consumers and publishers alike.

– Licensing concerns, accessibility, and ownership: Traditionally, when an individual buys a physical game, they assume they own that copy and have access to it forever. This works well if you go and purchase a physical disc for example, and gives you a sense of control and ownership. However, when you grab a digital version, you’re really only buying the licence to play it, and this could lead to you losing access to it if the game is removed from the store for some reason. In fact, several major publishers state in their terms of service that if a game isn’t available on their digital platform anymore, you won’t be able to download it again, even if you’d already paid for it.

– The demise of the preowned games market: Games can be expensive, whether they are physical or digital. Buying new copies of them can be hard for quite a few gamers. A way they circumvent this entry barrier to gaming is by buying used physical copies. Several industries such as cars, furniture, electronics, and the like have a thriving pre-owned market and video games are no different. Stores like GameStop have made an industry of reselling used games. However, as a result of digitisation, the preowned games market is heading for its demise as most digital distribution platforms prevent reselling. GameStop closed more than a thousand stores by the end of their fiscal year of 2020, thanks to reduced business and debt. Video games are harder to buy now for a large demographic, which creates a barrier to accessibility.

Trends that Push the Digitisation of Games:

Despite the disadvantages, the gaming industry has been steadily moving towards digitisation for several years now, across multiple gaming platforms. This is a result of certain factors of which we go into detail below:

Shifting game revenue business models: While in the past, the key focus for game retailers and publishers was the number of copies sold, revenue models are evolving across gaming platforms. The free-to-play model lets players play games for no initial charge, introducing monetization at later stages in a variety of ways. These include paying for an ad-free version, buying in-game upgrades and cosmetics, unlocking new areas and characters, and several more. Another model gaining popularity is gaming as a service (GaaS). Similar to how companies provide software as a service (SaaS), GaaS is a subscription-based on-demand service which enables gamers to play titles on hosting servers of video game publishers. Combined with monetizing options like the aforementioned ones, GaaS can help extend the longevity of a video game’s popularity. GaaS also pushes digitisation greatly because the games using it as a revenue model are predominantly digital.

Digital-only console variants: Sony has two variants of their flagship console line, the PlayStation 5. One of these comes with an Ultra HD Blu-ray disc drive and the second runs purely digital games. Their major competitor, the Xbox consoles from Microsoft, also released an All-Digital Edition for the Xbox One S and is expected to launch a similar model for their new Xbox Series X. These variants are a way to ease their customers into a digital future and also improve sales for their game subscription services (PlayStation Now and Xbox Game Pass.)

PS5 digital version
Are digital-only consoles the future of console gaming? Source: Sony Interactive Entertainment

Cloud gaming: Gamers can now directly stream games from the cloud, saving them from having to invest in high end hardware or download huge files. People who don’t have a console or a decent gaming PC can find it difficult to game for entertainment. However, with a rise in access to fast internet, streaming games from the cloud can become a reality in the next few years and already is a major area of focus for several tech giants like Facebook’s Facebook Gaming, Google’s Stadia, and Microsoft’s Xbox Cloud Gaming.

The rise of esports: Esports is estimated to have an annual growth rate of about 10.4% by 2023. Several hundreds of millions of people watch it both casually and hardcore. It had a YoY growth rate of 11.7 percent by February 2020. As a result of the Covid 19 lockdowns, 889 billion minutes of gaming tournaments have been viewed on Twitch, a massive 35% increase from 2019’s 660 billion minutes. Similar popularity which sports leagues and franchises like the NBA and EPL enjoy is seen amidst esports enthusiasts now. Good examples of this are fans buying their favorite team’s merchandise, as well as huge companies sponsoring and collaborating with esport teams and game studios during tournaments. On older platforms like television, as a result of the pandemic, the time slots reserved for cancelled sports events were filled with esports tournaments instead. The games these tournaments are hosted for are predominantly digital releases and have led to the e-sports industry being valued as a multi-billion dollar industry, further promoting digitisation.

Communities plus streaming and creation tools: On YouTube, after music, game videos account for the most videos as well as views on the platform. 

Playing digital games
Being a streamer is an increasingly lucrative proposition. Source: Shutterstock

The time spent by people watching game video content has increased exponentially, especially with streaming services like YouTube Gaming and Twitch. A lot of these games are primarily digital releases. The popularity of this content causes digitisation to shoot up. Reaching people is also easier as a result of tools enabling single-click live streaming, social platforms integrating live video content, and features like Instagram reels which let creators interact with their audiences anytime, anywhere. 

Conclusion

There is no doubt that the future of video games is entering a digital era. The convenience, cost savings, and reach of digital games far outweighs the cons for game makers and consumers alike, plus there are several things publishers can do to improve digital game ownership such as timed refunds, trading, and publishing retro releases on their e-stores, to name a few. With the two major consoles- Xbox and Playstation- both releasing digital-only variants of their consoles which are cheaper, console gamers will be able to push digitisation even further. Developers and publishers are looking to cut down on middlemen and overheads to increase their profits by not depending on retailers to sell their products. For example, Capcom reported how digital sales significantly improved their company’s profits by removing retailers from the sales journey.

It appears to be only a matter of time until CDs and cartridges join the obsolescence of floppy disks and the like. As the gaming industry enters a new age, game companies must face questions regarding preserving past games, digital exclusives, and more, as well as come up with a long-term plan to deal with the shift to digital sales. Promoting cross-platform play and saves will also be essential as it enables users to jump between different devices. CD Projekt Red’s The Witcher 3: Wild Hunt is a great example of this. They offered the game for free on PC if it was owned on a console and made cloud save transfers possible between platforms. 

At this juncture, it isn’t a question of whether digitisation of video games is happening, it’s how it impacts the gaming industry as a whole. To be able to stand out amidst the rising competition, e-retailers must ensure their product pages are accurate and well-optimised, both of which require high quality game metadata. They need to be able to boost their discoverability and keep their customers loyal. Reach out to us for data covering over 180,000 games, spanning 200 platforms across four continents.

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