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14 OctoberGame AdvertisingVideo Game IndustryVideo Games

Advertising in Video Games

The global market for video games has grown exponentially over the past decade and 2022’s revenue is projected to reach $219.90 billion. This comes from a variety of segments within gaming, which we’ve covered in detail in our game monetisation article. Long gone are the days when game revenue came from physical or even digital sales of copies. These days, subscription services, in-app purchases (IAPs), and advertising all contribute just as much, if not more, to revenue.

The biggest chunk of video game market revenue, a whopping $91.4 billion in 2021, comes from smart-phone games and is more than the PC and console markets combined. In 2019, a survey conducted by deltaDNA found that 94% of free-to-play video game developers incorporate some form of in-game advertising. Knowing these facts, we’re going to zoom in on one particular sector here, which is advertising in games.

It makes sense to look at how advertising in games works and how it came about, considering that the global video games advertising market is expected to reach $4.8 billion by 2024.

The History of Advertisements in Gaming

From the above data, the question arises, how did game makers realise the potential of generating revenue through advertising? The first ever ad in-game was actually not a commercial one, but that of a game developer trying to generate interest for his next game. Scott Adams, the creator of Adventureland left a message promoting his next game, Pirate Adventure.

After this (relatively) wholesome ad though, game devs and brands alike took a note from movies and TV shows. They saw how the latter did product placement and wanted to replicate it in games but they faced some hurdles. In movies and shows, you can see the world in great detail so including a product or two doesn’t look odd. A character casually drinking Coca Cola or lacing up their Nike shoes doesn’t affect the quality of the production. In games however, the graphics then weren’t great enough to include most products organically. Thus, the gaming industry came up with another way to partner with brands and those were advergames.

Advergames are games made exclusively for advertising purposes. The first released advergame was Tapper in 1983. The game had been originally sponsored by brewer Anheuser-Busch, and featured the brand’s logo with gameplay based on serving beer. The game proved so popular that a non-branded version of the game, Root Beer Tapper, was released for general arcades, with the beer replaced by root beer to cater to younger audiences. In the 80s and 90s, numerous advergames were released (though the term only came into existence in 1999) and with graphics improving significantly, new advergaming opportunities appeared. For instance, car manufacturers couldn’t really show off their cars in games until graphics improved enough by the 90s and games like Driver and Need for Speed really took off (though they didn’t show these vehicles being damaged even if you were an awful driver because bad for business, but we digress.)

While ads these days in games are mostly annoying, back then, a lot of the released advergames were actually quite popular and… fun. Chex Quest, a cereal-themed child-friendly remake of Doom, was a huge hit and is till date, considered one of the best advergames made. Advertisers also experimented with different kinds of product placements. They had ads integrated into splash screens (McVities Penguin Chocolates in James Pond Robocod, 1991), they made their mascots characters in-game to avoid directly mentioning their products (Ronald McDonald starring in McDonald’s Treasure Land Adventures, 1993), and they even weren’t below taking potshots at their competition. The latter in particular was interesting: Coca Cola worked with Atari to redesign their mega-hit Space Invaders for one of Coca Cola’s sales conventions. The aliens you had to shoot would spell out ‘Pepsi’ on the screen. A rather on the nose shot.

In 1999 though, Crazy Taxi rewrote the classic advergame template, where the brand was no longer the center of the game but instead, just a facet. In the game, you’re a taxi driver picking up a passenger and taking them to where they want to go, which are places like Levi’s store or Pizza Hut. You could also see other brands and stores enroute, and the placement of all of these were organic enough for gamers to appreciate the realism. A case of where art imitates life (a tad ironically) arose in games like Madden, NFL, and FIFA. They all had to pay licensing fees to incorporate details from the real-life leagues and to offset these, they started getting into sponsorship deals with brands to show them prominently in-game.

In 2005, a game called Splinter Cell: Chaos Theory used what we call now as ‘dynamic advertising’ where the ads shown were relevant to players. This audience segmentation, as it is known, was first done by Splinter Cell’s developers Ubisoft, though the industry followed suit soon.

Of course, if you’re going to be overly heavy handed with in-game product placement, especially if it doesn’t make sense in the game universe, your audience isn’t going to be very happy about it. EA found this out to their chagrin when their billboards for Pepsi and Intel in Battlefield 2142, a game supposedly set a century in the future, were disliked strongly by players. To give them their due, they did eventually remove the ads from the game but it was one of the first games where the negative side of putting ads in your game really showed up.

When mobile gaming started to take off, it led to a change in game design and how games were monetized. Games were now often F2P with their main revenue coming in from ads. We’ve covered how exactly mobile games are monetized in our article about them if you want the details, but a lot of different kinds of ads began being made and incorporated into games. We’ll head into the different types of ads in a later section but suffice to say, ads in games were here to stay. However, not all game developers took care that these ads were ok with their customers. Often, mobile games have the issue of showing too many ads. You clear a level? Ad. Lose a life? Ad. Open the app? Ad. This sort of nagging by a game would be bad enough but since a lot these games derive most if not all of their revenue from ads, they feel the need to make levels shorter and squeeze in as many adverts as possible to maximise revenue, to an extent sometimes where games become almost unplayable.

Finally, both AR and VR have also started seeing the potential of ads to generate revenue. In Pokemon Go, Niantic added advertising which showed up depending on which location you were at, bringing the real and virtual world together. While there are no conventional banner ads in Pokemon Go, they still have sponsored Poke Stops, free items in-game from companies that support the game which you can claim by looking at an ad, and even some sponsored cosmetics but so far, all of these have not messed with the game’s immersion. On the VR side of things, Volvo made an app that uses VR glasses to test drive their XC90 SUV. In fact, by 2022, the number of annual installs of AR and VR apps will grow by 45% compared to 2017, and the market for in-app purchases will increase by 92%.

The Types of In-Game Advertising

We can see from our history of game advertising that there are several ways of placing products in-game. Different methods of advertising work for various products, game devices, or even game genres, and especially with mobile game ads, a lot of variety has popped up. Let’s look at the major types.

Static Advertising/Product Placement:
Static in-game advertising is when ads are coded right into the game and can’t be changed (unless the game is completely online.) These advertisements are planned and integrated into a video game during the design/development stage, and as such, can be integrated in a customised manner. For example, Splinter Cell used in-game Sony Ericsson phones to catch terrorists. Unlike conventional static advertising in real life, static ads in game allow players to interact with the product being advertised. Ads are also incorporated on billboards, especially in sports games, analogous to how it happens in reality.

Advergames:
These are custom-made games which are built for promoting a particular product or brand through its story, environment, or gameplay. Advergames can also offer players benefits in real life through coupons, discounts, and the like. These games are a fun and entertaining way for brands to connect with their customers if done right.
Examples of great advergames include Cool Spot from 7up, Sneak King by Burger King – this led to a 40% increase in sales revenue for Burger King, McDonald’s Treasure Land, and Pepsiman by, well, Pepsi.
Dynamic In-Game Advertising
Dynamic advertisements are those which consider various factors such as location, age, personal interests, and more before displaying ads. These are personalised ads at scale and using dynamic ads, any brand can segment people who use their app or website and show them products and services they have a keen interest in. They allow game developers/publishers or the ad delivery service to track their ads in real-time and get data such as angle from which the ad is viewed, screen-time spent, and more to correct issues and improve existing and future ads.
There are various kinds of dynamic ads, some of which include:

Diegetic dynamic ads: These are dynamic ads which are seamlessly placed in the video game world. This allows media buyers to purchase real-time and geo-targeting capable advertising inside of video games. The adverts appear inside the game environment, on virtual objects such as billboards, posters, and bus stops – all of which are objects that you’d expect to see in a realistic sports or urban environment video game. Tony Hawk: Ride is an example.
Interstitial ads: According to Google, interstitial ads are full-screen ads that cover the interface of their host app. They’re typically displayed at natural transition points in the flow of an app, such as between activities or during the pause between levels in a game. When an app shows an interstitial ad, the user has the choice to either tap on the ad and continue to its destination or close it and return to the app, though often, games force users to sit through several seconds of the ad which can be quite frustrating. Video ads are a popular kind of interstitial ad in games.
Banner Ads: These are advertisements present in the form of banners in the game. They may be displayed at different positions like the top, bottom, or side of the screen. They may occur at different instances in the game such as in the main menu, during gameplay, between levels, and more.
Reward ads: These are ads which are basically an in-game exchange offer: users view ads for in-game rewards like extra lives, boosters, and the like. Candy Crush is a good example of a game with good reward ads. Since these ads are optional and users can choose to avoid them, they aren’t as negatively looked at and they even increase in-app purchases. However, unlike interstitial video ads, some of these are not skippable.
Playable ads: These are mini games users can try out and if they like it, they can install the complete app. They make for a great user experience and have some of the best conversion rates. Tennis Clash and Royal Match both are popular playable ads.
Offerwall ads: These tend to list out tasks that users can complete in exchange for in-game rewards. They act almost like a mini online store and since they’re optional, they aren’t frowned upon as much as ad barrages. They also increase time spent on apps significantly by extending the session length.
Through-the-Line Advertising
This is a kind of advertising that involves the use of URL hyperlinks within the game to get players to visit web-pages with advertisements. The technique used to tempt the player into visiting the intended URL varies from game to game.
In games such as Enter the Matrix, Year Zero, I Love Bees, and Lost Experience, URLs make up a part of the background of the game such that certain plot details can only be learned by following the link.

Why Ads are a Necessary Evil

Advertisements have their benefits (at least for game development companies and the companies placing the ads) but they have more than their fair share of issues. While ads are great in a way that they keep games F2P, especially when it comes to mobile games, they can often prove to be extremely annoying, tasteless, or even downright misleading. Let’s look at the good, bad, and ugly when it comes to in-game advertising.

Pros:

The biggest point in the favour of advertisements in-game is that they can create new revenue streams. By adding ads to games, companies can reduce the price they’re sold at, and even make them free, as seen by the F2P model pioneered in mobile devices. When Angry Birds was ported to Android devices, it was released as a free game with ads and even if users opted not to pay to remove ads, they could still enjoy the game. King’s release of Candy Crush Saga as a F2P game right off the bat propelled it to the top of the charts. In just more than a year, King had seen over 400 million new players of the game and their revenues had jumped from $62 million in 2011 to $1.88 billion from advertising revenue and in-app purchases.
In-game ads which promote a popular artist or concept can also boost your own game. For example, in 2021, Fortnite announced the continuation of its cooperation with the Jordan brand. Players can compete for the Air Jordan XI Cool Gray, the iconic sneaker model, and discover rooms dedicated to the best basketball players. The MVP gets access to a virtual museum, a basketball court to test your abilities and an immersive video that advertises the Jordan brand.

A 2009 study by an advertising company found that 80% of consumers correctly recalled an advertiser and 56% had a more favorable impression of the advertiser because it allowed them to play a free game. This is especially relevant when it comes to advergames and mobile gaming, though in the past decade, it’s more of the latter. FIFA and other popular licensed sports franchises made extensive use of in-game product placement and advertising, on billboards, jerseys, and more. Since these franchises already have a great deal of sponsorships and ads in real life, in game, it didn’t cause eyebrows to be raised.
In-game advertising is an important source of income for browser-based and other Internet games that do not feature micro-transactions or pay-to-play. Websites like miniclip, pogo, and kongregate all feature free games one can play online and they offset their expenses with ad revenue.

Cons:

Integrating IGA into games without alienating or frustrating players can be hard, especially if done overtly. A lot of mobile games tend to slam ads between every level, if you fail a level, and as soon as you open or close the game. They also tend to shorten levels to increase the number of ads opened and this can make playing them really frustrating.
Some games market themselves as something they aren’t: titles like Homescapes which is basically a match-3 puzzle game is peddled as, well, a fixer-upper game in ads. This kind of misrepresentation leads to a lot of downloads but it also causes games to look at mobile titles with increasing resentment and scepticism. This is more of a marketing issue than being specific to ads.
Game companies and developers worry that they may be forced to change the game as requested by advertisers if in-game adverts become a common revenue source, and face a possible backlash from consumers. However, certain kinds of ads, such as reward ads are actually looked at favourably by users and removal of them can lead to customer dissatisfaction.
Like in any other industry, false advertising is an issue in games as well. In one rather notable instance, the Gatorade company had published a free mobile game Bolt! which featured Usain Bolt and challenged the player to “keep your performance high by avoiding water”. The state of California asserted this claim was false, as Gatorade had been shown to be more harmful to the human body than water. Since the game was targeted towards kids and teenagers, this gave the state cause to sue Gatorade. The case was ultimately settled with Gatorade paying a $300,000 fine to the state. This case might have had a happy ending (except for Gatorade). However, misleading claims and even F2P games that promote toxicity are still around. For example, ads on Facebook for a F2P mobile game called ‘Game of Sultans’ literally imply that abuse can make women listen to you. The lack of regulation when it comes to both game making and ads like this can prove deeply harmful.

In-game advertising can also lead to negative reviews for a video game because the ad doesn’t make sense or just seems very insulting to players. A great example of ads being despised by games was Maxis’ promotion of a heavily branded Nissan Leaf charging station as downloadable content in SimCity. This being the first DLC for the game was just insult to injury.
Companies have found that gamers do not want distracting advertisements when they have already paid the retail price and/or a monthly subscription fee. Games which are paid, full-on AAA releases already make plenty of money from game sales and having ads which break immersion or are unskippable is not something which customers, for obvious reasons, are gonna be happy about. In NBA 2K20, there were ads during loading screens which are not only unskippable, but also longer than the game load timing. The game already has microtransactions, loot boxes, and cost $60 to get, but this was the last straw for a lot of customers. 2K Games got a lot of backlash for it, but they did the same with NBA 2K21. (Yikes.)

The Future of Ads in Games

We’re in a place where like it or not, ads are here to stay. We’ve looked at both the pros and cons, and at the end of the day, especially when it comes to mobile games, F2P is the monetisation method of choice. Game developers, publishers, and advertisers alike have to find the balance between making enough money and annoying their customers. Innovative ads which provide tangible value to customers is the solution to this. The good news is that players are receptive to ads in-games – in fact, 95% of players say that ads increase in-game realism.

Ad platforms are already connecting publishers and advertisers within the metaverse to deliver in-game ads. Game developers can offer advertisers the possibility to show their ads within metaverse worlds on various fronts such as billboards in stadiums to posters in virtual worlds like Fortnite and Roblox.

Reward-based ads are some of the most successful ones: they have been shown to directly increase in-app purchases, increase screen-time, and improve engagement. In May 2017, after adding rewarded video ads that enabled users to gain an additional life, CookApps saw a 16% increase in session length in one of its apps. A/B testing found that session length shot up by 211% if reward ads were placed as soon as users exhausted their last life. In fact, when Rovio decided to remove reward ads for users who had spent money in their game Angry Birds Transformers, these players were extremely annoyed as they’d come to rely on these ads as a supplement as opposed to an annoyance.

Another reason why advertising in games can be so difficult for game developers and publishers is because they don’t have data often as to what kind of ads their users prefer. This data is often kept secret by the advertiser they tie up with and they’re forced to put in what the advertiser says, sometimes at the cost of user satisfaction. However, if ads which are appealing to their audience based on their preferences are shown dynamically at a frequency that customers can handle based on player data, the irritation these ads cause can be reduced.

Innovative ads are also often appreciated, especially if users get something exclusive. Fortnite is known for their concerts with prominent music artists like Travis Scott and Marshmello but recently, pop star Ariana Grande held a concert in the game across multiple days. While in previous concerts, you could dance in-game with your friends, fly around a giant character model of the artist, and enjoy cool visuals, this time around, you could play minigames where you raced and collected power ups, or fought in-game villains. Experiences like this which are utterly unique are sure to make users happy. With the metaverse booming and online experiences evolving, in-game ads are a great way to make money while also setting a standard and entertaining your users. Finally, sponsorships when done tastefully can be a great way to boost revenues while also advertising a company or product. For example, VALORANT’s international tournaments call rounds where you win by eliminating your opponents without losing your teammates a ‘Prime Gaming Flawless’ as they have a tie-up with Amazon. They also offer free-in game loot for those who have a Prime subscription.

In-game advertising doesn’t have to be something done just for revenue at the cost of annoying your users, it can be done in a way that proves beneficial to all parties involved and that is what both game companies and advertisers should aim for. Data-backed dynamic advertising which either gives users in-game rewards or something else unique is the way to go.

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26 SeptemberCloud GamingConsolesDigital DistributionPhysical Video Games

The Decline of Physical Games and The Rise of Digital Distribution

by Karthik Balasubramanian0 Comments

When Valve made the much-anticipated Half-Life 2 available on Steam in 2004, a deluge of users rushed to download the game or authenticate their physical copy, and Steam simply keeled over and crashed.

Valve had made Steam authentication mandatory for even physical copies of the game, so everyone who had bought the title, either through Steam or at a retailer, had to go through Valve’s client, and the company’s servers simply could not handle the load. Gamers who had expected the further adventures of Gordon Freeman ended up with pop-ups from the Steam client apologising for the lengthy delays.

Steam has come a long way since then and is a fixture of millions of PCs now, and many major publishers, including Sony, currently release games on the platform. Steam is also home to thousands of indie games and is arguably the most prominent digital delivery service for PCs.

The digital distribution of games – whether on PC, console or mobile – has grown prevalent thanks to growing internet speeds, higher broadband penetration, and many other factors. Consoles have long featured digital storefronts from which gamers can buy and download games, smartphone games are available via Google Play or the iOS App Store, and for the PC, digital games have practically become the norm as modern computers tend to lack optical drives. In turn, sales of physical game copies, or ‘retail’ editions, are on the decline, though they are yet to be fully supplanted by digital delivery.

In this blog, we will delve into the history of game storage media, from cartridges to Blu-ray discs and chart the rise to prominence of digital distribution services for games. Game storage formats have played a significant role in the history of gaming, and even today’s major consoles provide support for physical copies. However, the industry is transitioning towards digital delivery as the principal mode for selling games – we will look into why this is the case.

What is a Digital Game?

A digital game refers to any title downloaded from a digital delivery service such as Steam, a console manufacturer’s online store, or smartphone app stores. Digital game data can be installed on devices like internal hard disks, solid-state drives and even removable storage. Note that such games do not have to be paid for a la carte – subscription services such as the Xbox Game Pass or PlayStation Plus allow users to download many games and play them so long as they remain subscribed.

What is a Physical Game?

A physical game copy refers to any game whose data is stored in physical media like cartridges, floppy discs, CDs, DVDs or Blu-ray discs. Today, such physical copies may not contain all the files required to play the game and you may still have to download either a significant portion of game data or the latest patch from a digital delivery service.

In the past (especially during the time of cartridges), buying a game was a one-and-done deal, and you inserted the game cartridge into a slot to play and even save progress – cartridges featured a chip specially designed for game saves. Effectively, this meant that all game data – whether it was the game itself, or your progress, was saved in the cartridge, and not on a storage device in the console.

Physical game copies (especially of console games) can be shared among friends, sold second-hand to others or traded in at a retailer. They can even allow access to a full game without necessitating an internet connection, though most contemporary games need downloadable patches and updates to work properly. People still buy physical games because of discounts at local retailers or e-commerce sites, and the advantages that physical copies offer.

In the next section, we will outline the evolution of physical game storage formats, from the cartridge to the Blu-ray disc. Like any form of media, gaming depended on physical storage before high-quality internet speeds made digital downloads a viable alternative. The capacity and efficiency of physical formats steadily increased and the transition from one storage format to another often marked a major inflection point for the gaming industry, as we will see below.

A History of Physical Game Media

Physical copies of games have played an integral role in making gaming a popular and affordable past-time, especially since they were geared from the first to make home gaming viable.

The following sections will discuss the role of cartridges and floppy disks in gaming from the 70’s to the 90’s, followed by CDs and DVDs (both of which Sony used to great effect in PlayStation consoles), and then to Blu-Ray, which was first used by Sony for the PlayStation 3, and then integrated with Xbox consoles as well from the eighth console generation onwards.

Cartridges and Floppy Disks

The advent of cartridges marked a major shift for home gaming – no longer did consumers have to buy dedicated consoles for their favourite games, but could buy a single console and play multiple games on it simply by slotting a compatible game cartridge into the system.

Fairchild Semiconductor pioneered the design of the first console with interchangeable game cartridges – the Fairchild Channel F (1976). Although overshadowed by the Atari 2600 (1977), Fairchild was the first to create a console with a microprocessor that loaded games from programmable cartridges.

Designers at Fairchild knew that their sensitive cartridge circuit boards had to be capable of withstanding considerable abuse, like being left out in the sun, or being stepped upon. They encased their technology in hard, durable plastic, but also created an easy-to-use slotting mechanism, which would enable both the cartridges and the console to withstand multiple insertions and ejections.

Cartridge design evolved considerably after Fairchild’s pioneering efforts. They loaded graphics and other game data faster and faster, and new iterations were made to use less system memory. By the time Nintendo released the N64 (1996), cartridges could store upto 64 MB of data – the first cartridges made by Atari and Fairchild could store just 32 KB at best. From the late 70s to the early 90s, the cartridge was the default storage medium for console games, especially because they were hard to reverse engineer.

During roughly the same period, floppy disks – especially the 3.5 inch versions introduced by Sony in 1980 – were used to store and exchange games and other programs for the PC. The 3.5 inch disk was designed to be durable and resilient, with a hard plastic casing and a sliding metal shutter that protected the magnetic storage tape inside. They were an ‘almost viral’ way for transmitting shareware – especially portions of games like Doom (1993) and the Commander Keen games.

Doom was also one of the most prominent games to be released on floppy disks, as were many other games of that period, such as Prince of Persia (1989). Such games could be shared even with friends who didn’t have the same type of PC, since the floppy disk drive had become an industry standard by the late 70s.

Both the floppy disk and the game cartridge would eventually be supplanted by the CD-ROM (Compact Disc Read Only Memory). We discuss the advent and rise of optical media in the following sections.

Optical Media

The use of optical media greatly expanded the possibilities of gaming by allowing games to be much larger in size. In a cartridge, game data is stored on a single chip on a circuit board, limiting storage capacity, and save games are stored on another chip. But almost all the surface area of an optical disc can be crammed with data in the form of microscopic indents etched by a laser – such discs are known as ‘optical’ because light is used to both read and write onto them. A Blu-ray disc’s capacity is more than 50 times that of a CD because of its much smaller, densely-packed indents.

Games such as Final Fantasy VII (1997), Halo 2 (2004), the Last of Us (2013), and many others made full use of the storage space available to them to deliver quality content at the highest-fidelity graphics that were possible at the time they were released. Support for optical media also helped consoles double as home entertainment systems, and the success of many consoles, across generations, was partly because they could play movies and music as well.

The CD-ROM Supersedes the Game Cartridge

The PlayStation (1994) is the first home gaming console to sell more than 100 million units, and this is at least partly due to its use of compact disks (CDs) as the storage format for its games. In 1985, Sony and Philips had together developed a technical standard by which CDs could hold any form of data, which led to the creation of CD-ROMs. With about 700 MB of storage space, they dwarfed the capacity of cartridges (which could store up to 64 MB) and allowed games to offer much more content than was possible earlier. CDs also featured various other advantages – they were cheaper to manufacture and also reduced production times for games, leading to lower retail prices.

According to a PC World article, Sony won the first console war it ever participated in largely because it used CDs. Due to the inherent advantages of this storage format, Sony was able to bring many third-party publishers into the fold, including Square Enix, whose hugely successful Final Fantasy games had traditionally been Nintendo exclusives and had served as system sellers for Nintendo consoles.

Square decided that Nintendo’s cartridge-based N64 would not suffice for Final Fantasy VII. It turned to Sony, and the end result was a gorgeous game with high-quality cinematics and pre-rendered backgrounds, all made possible because of the CD’s higher storage capacity and the PlayStation’s support for 3D graphics. Final Fantasy VII was hailed as the ‘game that sold the PlayStation’ – FF VII did for Sony what previous instalments of the franchise had done for Nintendo.

The PlayStation could also play audio and video CDs, making it one of the most versatile home entertainment systems of the time. The resounding success of the PlayStation led to the marginalisation of the cartridge, and home gaming consoles would use optical storage as the primary medium by selling games.

DVDs Turn Consoles into Home Entertainment Systems

Much like the CD-ROM, the DVD (Digital Versatile Disc) would allow games to be much larger in size and feature more content. Halo: Combat Evolved (2001) spawned a huge franchise that became a major system seller for Xbox consoles, and required the higher storage capacity of a DVD. Halo 2, considered one of the greatest games of all time, is nearly seven times as large as the first Halo game.

The larger-sized 3D games made for the PS 2 and the Xbox are recognisably modern – Gran Turismo 3 (2001) for the PS 2 features stunning graphics, as do the Halo games released for the Xbox, which used Microsoft’s DirectX technology and a graphics card made in collaboration with Nvidia for hardware acceleration. Higher graphical fidelity depends on high-resolution textures and game assets, which in turn require greater storage space – the shift to DVD enabled more content, and contributed to higher-quality graphics as well.

The PlayStation 2 (2000) and the first Xbox (2001) supported game DVDs and CDs and both could interface with home theatre systems, essentially serving as DVD players. The PS 2 could play movies and music out of the box, with the gamepad allowing you to control playback. You could also buy a remote for image adjustments and more playback features. Unlike the PS 2, the Xbox did not come with built-in DVD playback support: it needed a DVD kit containing a remote control and infrared sensor.

Costing a mere $299 at launch, the PS 2 was actually cheaper than some of the standalone DVD players of that time. The console’s support for DVD video was welcomed at a time when the DVD was one of the best ways to experience movies at home, as it came with bonus features and extra materials like deleted scenes and interviews with cast and crew. Films like the lengthy Lord of the Rings trilogy made it to the DVD as extended editions. The PS 2 not only boasted a great library of game exclusives but also served as an affordable home entertainment system, allowing users to enjoy high-quality DVD editions of their favourite movies.

The PS 2 is the best-selling home-gaming console of all time, and one of the factors that is said to have contributed to this was its capacity to double as a DVD player – it even allowed you to play burned CDs and DVDs, i.e, pirated movies, music and games.

Blu-ray Powers Massive Games

The Blu-ray disc format allowed even larger game sizes thanks to its storage capacity of upto 50 GB. The PS 3 edition of Last of Us (2013) – one of the finest games ever made – was around 26 GB in size, Uncharted 3: Drake’s Deception (2011) takes up 43.5 GB of storage space, and the PS 4 box-set for the Last of Us Part II contained two Blu-ray discs, to accommodate more than 70 GB of game data.

Game sizes actually increased from one console generation to another – Call of Duty: Ghosts (2013) for the PS 3 was 10.9 GB in size – this mushroomed to more than 30 GB for the PS 4, mainly because the next-gen versions came with higher-resolutions texture sets, higher-polygon game assets, and higher-definition cutscenes and cinematics.

In fact, the Blu-ray disc format’s prevalence is at least partly due to gaming and the PlayStation 3. Sony created the prototype of the Blu-ray disc in 2000, but when it was officially released in 2006, a format war ensued between Blu-ray and the HD-DVD format. By 2008, however, both the software and entertainment industries had settled on the Blu-ray format – a BBC article published the same year argues that the format won because it was integrated with the PlayStation 3, which had sold more than 10 million units by early 2008 and could play Blu-ray video at a time when the first standalone Blu-ray players were nearly double the PS3’s price. Microsoft had gone with the HD-DVD format for the Xbox 360 (2005), and though rumours sometimes surfaced about a Blu-ray add-on for the console, the Xbox 360 does not support Blu-ray playback.

Eventually, Microsoft also chose the Blu-ray, which is supported by the PS 4 (2013), the PS 5 disc edition (2020), the Xbox One (2013) and its variants, and the Xbox Series X (2020). These consoles support DVD and Blu-ray video playback as well.

It must be noted that a built-in Blu-ray player did not propel the PS 3 to the success that PS 2 enjoyed with its DVD playback capability. Nintendo’s Wii (2006), which used a proprietary DVD-based disc format for physical copies and lacked any movie or music playback, won the console war of this generation, mainly due to its far wider appeal.

In fact, by the late 2000s, observers were predicting that physical formats would decline thanks to a new ‘download era’ ushered in by high-speed, high-bandwidth internet connections and increased broadband penetration – in effect, supporting a physical format would not confer a significant advantage. In the next sections, we will discuss the rise to prominence of digital distribution for games, and the factors that have driven this transition.

The Prominence of Digital Delivery in Gaming

Digital delivery for games has grown more and more popular over the course of the last decade and the pandemic-period lockdowns accelerated this trend – in 2020, digital game sales surpassed physical sales for the first time, and 91% of the game industry’s revenue was digital (this includes full game downloads along with in-app purchases, downloadable content and mobile game sales). By 2021, the number of unique console titles sold on digital platforms in the US had far surpassed games sold as physical copies. According to an NPD report, nearly 2200 unique console titles were released on digital storefronts in the US, as compared to 226 titles sold as physical copies. A year later, Sony reported that digital purchases constituted 80% of game sales in 2022’s first quarter.

All this data suggests that digital delivery has become the primary, if not the sole, method for distributing games, and analysts believe that digital games will totally dominate the industry in less than a decade. Digital delivery is already the default for smartphones, which have never offered support for physical games, and we have covered mobile gaming and its main platforms in detail elsewhere. However, digital games did not rise to primacy overnight for other platforms such as PC and consoles, which had to transition from selling large-sized titles on high-capacity optical media to digital delivery. We will discuss the emergence and growth of digital distribution in such platforms below.

The Rise of Steam

Steam is by far the most successful digital distribution platform for PC games, though it was not the first – the now-defunct Stardock Central (2001) was the first such service for PC games. Steam was released in 2003 as a client that could easily update certain Valve games, especially the popular multiplayer shooter, Counter-Strike (2004).

A 2002 survey conducted by Valve revealed that 75% of its users had broadband connections, and convinced the company that digital delivery of games was a viable proposition. Their first attempt to deliver a game digitally (Half-Life 2) was not a resounding success, as is recounted above, but Valve continued to improve the Steam client and its support infrastructure, and within a few years, major publishers such as id Software, Take Two Interactive, Eidos, EA and many others decided to make their PC games available on Steam.

As the service grew more and more popular, some developers baulked at its restrictive terms of service, with EA deciding to launch Mass Effect 3 on its own Origin platform in 2012. Nevertheless, Steam remains the pre-eminent digital distribution platform for PC games – by 2021, it had 132 million monthly active users who could browse a library of over 50000 unique titles. Revenue from games sold on Steam reached $6.6 bn in the same year.

Other digital delivery sites include GOG.com (2008) – which enforces a strict non-digital rights management policy – and the Epic Games Store (2018), which is attempting to challenge Steam’s primacy. To incentivise publishers, Epic takes a 12% cut from game sales, whereas Steam takes 30% initially, though its share decreases to 20% if game revenue exceeds $50 million. Epic also does not enforce a digital rights management (DRM) policy for all games, allowing each publisher to decide DRM policy.

In 2020, Epic Games spent more than $400 million to secure games that would be exclusive to Epic, and unavailable on Steam, for at least a year. Subsequently, in December 2021, monthly active users peaked at 62 million, which is less than half of Steam’s 132 million monthly active users, and as of 2021, Epic has a total of 917 games, a fraction of Steam’s game catalogue. However, Steam took more than a decade to build its library and following, and the Epic Store has been around for less than five years. Epic is also known for freely giving away an estimated $17.5 billion worth of games, and even though its store went down for eight hours when it made Grand Theft Auto V free for a week in May 2020, Epic got seven million new users as a result of the giveaway. Steam might have a huge head-start, but Epic arguably has the momentum.

The prominence of Steam, the rise of Epic and the death of the computer optical drive, have made digital distribution the principal method for selling games for PCs.

Digital Stores for Consoles Evolve

Console makers, especially Microsoft, were quick to realise the potential of digital delivery – the original Xbox shipped with the Xbox Live (2002) service, whose principal function was to enable multiplayer gaming and the digital delivery of game content. In its early years, the platform offered premium downloadable content and add-ons for games, but could not offer full game downloads. In 2004, Microsoft created the Xbox Live Arcade platform, which offered small, quickly downloadable games from a range of developers – most of these games were either console classics or arcade-style titles. The platform served as an easy entry point for independent developers who could develop games and quickly release them as download-only titles.

Sony launched the PlayStation Store in 2006, and as with the Xbox, it initially offered downloadable content rather than full game downloads. The Store platform was first launched with the PlayStation 3 and six years later, it started to offer a variety of full game downloads.

The Wii Shop Channel (2006 – 2019), a digital distribution platform for the Nintendo Wii, supported the download of various applications, content, and even a web browser. Wii Ware (2008), one of the services in the Wii Shop Channel, was Nintendo’s first foray into digital delivery of full (small-sized) games, and as Microsoft did with the Xbox Live Arcade, Nintendo promoted Wii Ware as an avenue for small developers to publish innovative content that would be delivered digitally, thereby avoiding the risks and commitments of retail distribution. The Wii Ware service shut down when the Wii Shop Channel was discontinued, and players can no longer purchase titles anymore, though they can continue to download owned games to compatible devices.

By 2009, both Microsoft and Sony started offering full game downloads – after its E3 press conference, Microsoft announced that games such as Bioshock (2007), Assassin’s Creed (2007), and The Elder Scrolls IV: Oblivion (2006) would be offered as full game downloads on its Store platform for the Xbox 360. Meanwhile, Sony announced that full games could be downloaded over WiFi to its handheld gaming device, the PSP Go (2009), which had 16 GB of storage and lacked a slot for physical games. By 2011, the PS 3 had also enabled full game downloads – at a time when game sizes were ballooning, and broadband speeds were not quite capable of downloading large-sized games. In 2013, Ars Technica reported that a major Steam game took about 4 hours to download, while a PS 3 game took more than 5 hours to download – and this was in the US, where broadband speeds have generally been high. Download times have however tended to decrease as internet speeds and broadband access have steadily improved.

The Nintendo eShop launched in 2011 for the 3DS and was made available on the Wii U at the console’s launch (2012), and keeping up with Sony and Microsoft, Nintendo’s eShop featured full game downloads, along with DLC, video content, updates and more. The first game to be released both on the eShop and as a retail copy was New Super Mario Bros. 2 (2012).

The majority of Nintendo’s retail releases are now available as digital downloads, and developers can also choose to publish digital-only titles on the eShop. This platform is the primary digital storefront for the Nintendo Switch, the hybrid hand-held and home-gaming console that has sold more than 100 million units.

By 2013, digital game sales had started to edge past physical sales in the US, and by 2018, physical sales accounted for only 17% of all game sales in the country. In the next section, we will discuss the factors that have contributed to the rise of digital distribution.

Why Have Physical Game Sales Declined?

There are many interconnected factors that have led to the decline of physical game sales. Higher internet speeds and broadband penetration have made video streaming services possible – they have also contributed to making large game downloads viable. The COVID pandemic also made digital downloads popular during the shutdowns, and revenue from digital downloads have surpassed physical sales in part because mobile games, which are delivered digitally, have become the biggest segment of the gaming market. We discuss these and other factors below.

Increasing penetration of high-bandwidth, high-speed, low-cost internet: Based on Ookla reports, nearly 50 countries have median download speeds greater than 100 megabits/second (Mbps). As of September 2021, the global average download speed on broadband was 113.2 Mbps, up nearly 30 megabits from 2020 speeds. 83% of US households have access to broadband connections, and a majority of those homes have connection speeds of 15 Mbps or higher. With the advent of 4k texture packs, 4k video, high-quality audio and more, the size of some contemporary games exceeds 100 GB, with Call of Duty: Modern Warfare (2019) at a staggering 183 GB. The game would take at least four Blu-ray discs for the retail edition, and a high-speed internet connection is a more viable option for delivering such games than cumbersome disc editions.
Digital storefronts control game prices and cut out the resale market: Game sales are significant sources of revenue for console makers and publishers. Cutting out the middleman – retailers who stock physical copies of games and trade-ins – and drawing people to digital storefronts would result in higher overall profits for console manufacturers and publishers. This has led console makers to offer more incentives for digital purchases – the Xbox Play Anywhere program, launched in 2016, allowed users to buy a digital Xbox game and play it on both the console and the PC. Both Sony and Microsoft now offer cheaper all-digital editions of consoles: the Xbox Series S and the PlayStation 5 Digital Edition. Microsoft is even working on a patent that will allow Series S owners to authenticate a physical game copy using an external disc drive and download it via the digital storefront. The PS 5 uses an advanced compression technique to decrease the size of game data and reduce the wait time to access a digitally downloaded game.
The Pandemic made digital downloads more popular: Many observers have pointed out that lockdown restrictions spurred the purchase of digital copies, especially as gaming itself became of vital importance as a means of connecting with people, and physical stores could not be visited due to widespread shutdowns. In fact, the pandemic is considered a tipping point for digital game sales. By 2020, when the current generation of consoles were released, digital purchases accounted for nearly half of console game sales.
Cloud gaming and gaming subscriptions: Currently, both Microsoft and Sony feature a robust digital delivery platform, and both offer game subscription services with libraries that boast multiple exclusives, which can be downloaded and played for free so long as you pay a monthly subscription fee. Such services also offer discounted prices at the digital storefront for many games, including those that are not part of the subscription. The highest tiers of these services also feature cloud gaming. With 25 million users, the Xbox Game Pass accounts for a significant portion of Microsoft’s gaming revenue. In fact, the rise of subscription services, made possible by higher internet speeds, could even lead to a new war based on the ‘subscription exclusives’ between console makers.
Live-service games depend on downloads: The industry has seen a major shift towards live-service games, which seek to keep their audiences engaged for years by regularly adding new game content, updates, game-balancing patches and in-app purchases – and all such content is delivered digitally. In a world where many of the industry’s most prominent titles follow the games-as-a-service model, physical copies may simply not be a viable mode of distribution. Live-service games are also quite large in size – the free-to-play game Destiny 2, including all expansions and updates, currently requires 97 GB of storage space on a PS 5, and more than 100 GB of space on an Xbox Series X|S, and though a physical copy exists, a significant portion of the game content needs to be downloaded. Some of the most prominent games today depend on digital delivery.
The biggest sector in gaming uses digital delivery: Mobile games are delivered as apps through stores such as Google Play and the iOS App Store, and they are some of the most lucrative titles on the market. As of 2022, more than 60 mobile games have made more than $1 billion in lifetime sales, and mobile titles constitute the largest share (45%) of global games revenue. The mobile gaming market is expected to be worth nearly $140 billion by 2026, and as mobile games grow ever more popular and lucrative, revenue from digital sales (including full-game downloads, DLC, in-app purchases and more) will continue to surpass physical sales revenue.
Considering that so many factors are contributing toward the transition to digital delivery, one might believe that physical games are on the way to extinction. This is, however, not quite the case. In 2018, gamesindustry.biz argued that the sale of physical games might be declining, but it still remained an industry worth billions of dollars worldwide, with 75% of AAA games being sold as physical copies. A year later, it reported that physical console games accounted for 60% of sales value during the last quarter of 2019. These reports may reflect a pre-COVID reality, but even during the pandemic, in April 2020, more than a million physical games were sold in the UK, the highest figure since 2015. Physical games, while on the decline, are not yet finished.

Conclusion

The inherent advantages of physical games – shareability, resale value and access to game data without the need for a connection – still hold value to gamers. The outrage over Microsoft’s attempt to implement an always-online DRM policy for even physical Xbox One games shows that full ownership – another perk of physical games – is valued by users.

However, the Nintendo Switch’s cartridges underscore the problems with physical copies. While Sony and Microsoft support Blu-ray disc editions for their consoles, the Switch uses a proprietary cartridge based on the SD card format for retail games – such cards can currently hold upto 32 GB of data, though 64-GB cartridges have been in the works for at least three years. The small storage capacity of such cartridges requires users to download a significant part of the game, and they are also costlier to manufacture than Blu-ray discs, resulting in some games costing more on the Switch than on PC or console. These disadvantages may lead the portable Switch’s successors to eschew support for physical copies.

In fact, both retail distribution and digital delivery may be superseded by cloud gaming, which is expected to become a $20.9-billion industry by 2030. Amazon’s Luna and the cloud gaming solutions of Microsoft and Sony require only a fast connection to play a game, and if game streaming becomes prevalent, it can make retail copies, digital downloads and even game installation a thing of the past. Cloud gaming is considered the ‘killer use-case’ for burgeoning 5G networks, and the growth of 5G infrastructure can make game streaming a highly popular and easy way to play games.

Some sources on the web continue to argue that physical games are still relevant, and others that they should remain relevant, given that access to a digital copy of a game can potentially end when the provider goes bust – this is one of many arguments used to justify breaking DRM on media. Some have even argued that the death of the Blu-ray format (as a medium for movies and games) does not bode well for gamers, especially those on a budget, who need to resell their games to afford new ones.

Opinions aside, the industry itself is moving away from physical copies in a quite decisive manner, propelled by steadily increasing internet speeds and a changing industry landscape in which highly-lucrative live-service titles and mobile games dominate. Physical copies may not completely die out, but they will likely be relegated to a (very) niche market in the years to come.

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09 SeptemberMulti Player Video GamesVideo Games

Contemporary Trends in Online Multiplayer

by Karthik Balasubramanian0 Comments

In early 2012, a Kiwi soldier named Dean Hall released a mod for Bohemia Interactive’s tactical military sim Arma 2, creating an online multiplayer open world where players had to survive a zombie apocalypse. Named DayZ, the mod featured an unprecedented degree of realism – players had to eat, sleep and maintain a steady temperature, and the basic need to survive both the zombies, and the humans in the game world, became the sole focus of players. In DayZ you could either team up with others to stand a better chance of survival, or shoot and loot them for their gear, rations and medical supplies – if the game had any goal to speak of, it was to not die.

The early 2010s continued the tradition of innovation in multiplayer – a trend we discussed in depth in our previous blog. In the 2010s, games such as Minecraft, GTA Online and Final Fantasy XIV would each offer their own spin on the multiplayer experience. Another trend to emerge in the first half of the decade was the shift to mobile multiplayer, where studios would release innovative games that made meaningful use of mobile technology, such as Pokemon Go, with its augmented reality-based gameplay. The dominant trend in the latter half of the 2010s was the rise of the hero shooter and the battle royale, two genres that became wildly popular across platforms from PC and console to mobile. Perhaps the most significant recent trend in multiplayer, however, has little to do with game development and everything to do with the state of our society – online multiplayer experienced tremendous growth during the lockdowns of the pandemic, and we will discuss this as well in this blog.

2010-2016: Innovation and Mobile Multiplayer

In the first half of the 2010s, developers created innovative multiplayer games for consoles and PC, and also shifted toward multiplayer on mobile. These two trends – continued innovation in multiplayer and the shift toward mobile multiplayer, will be covered in this section.

Unique Multiplayer Titles Refresh the Genre

The decades between 1990-2010 had seen unique genres native to multiplayer, but the first half of the 2010s would see developers taking multiplayer to directions that defied traditional expectations.

Minecraft (2011)

Soon after the release of Minecraft 1.0 in 2011, it would become a highly popular multiplayer game. Minecraft’s multiplayer is distinctive in that it allows players to collaborate on mining for resources and working together to build increasingly complex and elaborate structures. While it has other multiplayer modes, Minecraft’s collaborative multiplayer was unlike any other style seen before – no game had ever enabled a mode where players just worked together to build incredible structures: there is no adversarial element involving combat in collaborative mode. Minecraft does offer more traditional gameplay in Minecraft Realms, where you can team up with others and go on adventures, and a PvP mode called BedWars, where you defeat other players by destroying their respawn point – a bed.

DayZ (2012)

DayZ’s realism was unprecedented in gaming, let alone online multiplayer. Apart from having to eat and sleep, players were vulnerable to fractures, drinking poisoned water could result in cholera and a zombie bite or bullet wound could send players into shock. The hostile conditions made for highly tense encounters with other players, who might simply choose to kill you, or decide on the spur of the moment to cooperate and team up with you. Dayz also features permadeath, meaning no matter how much loot and experience you have, you restart from scratch when you die. This adds yet another layer of immersion to what is already a hyper-realistic survival sim. Games such as DayZ are referred to as PvPvE (player vs player vs environment) because they combine cooperation and competition set against challenges posed by the game world.

Within the first three months of launch, DayZ had a million unique users and also boosted sales of Arma 2, the base game required to play the mod, by 500 percent, leading the CEO of Bohemia Interactive to admit that Dayz was the primary driver of Arma 2 sales.

Dean Hall was soon hired by Bohemia Interactive to create a standalone version of the game, which would be released on Steam Early Access in 2013, where the alpha version would sell a million copies by 2014. It also influenced games like Rust and ARK: Survival Evolved, and cast a long shadow on the development of survival games.

Dota 2, GTA Online and Final Fantasy XIV: A Realm Reborn (2013)

In the span of a single year, gamers got three of the most enduringly popular online multiplayer games: the MOBA, Dota 2, the MMORPG, Final Fantasy XIV, and GTA Online, which can be considered an evolution of what MMO experiences could offer, with its plethora of activities and challenges.

Valve released Dota 2 in 2013 and went on to host the most lucrative esports title in the world – the Dota 2 International, which now boasts a staggering prize pool of over $40 mn. Valve took an innovative approach to the free-to-play game’s premier esports title, crowdfunding it by the sale of skins, cosmetic upgrades and battle passes. Dota 2 is hailed as one of the most complex, balanced and challenging MOBA games and was ranked the best PC multiplayer game by IGN in 2013.

Set in the vast open world of Los Santos, GTA Online allows players to do just about anything they want, and Rockstar keeps releasing updates that expand the activities that players can engage in, introduce quality of life upgrades, and add even single-player missions. In GTA Online, you can take part in vehicle races, heists, and casino trips, run a criminal enterprise, buy homes, go to flight school, steal exotic cars, run around the city… and more – it’s a game containing countless games.

Final Fantasy XIV’s first iteration (2010) was a disaster, but Square Enix decided to resurrect it rather than abandon the project. The end result, released in 2013, is now a major MMORPG. Naoki Yoshida, tasked with reinventing FFXIV, streamlined many of its MMORPG elements: the developers set a low level cap, inviting players to continue playing the game in search of loot and resources, the armory system allowed players to change classes on the fly by equipping certain items, and Yoshida also pushed hard to bring high quality graphics to the MMO. The game also receives updates regularly, every 3.5 months, a cadence that ensures it remains fresh for gamers. It is termed one of the biggest games in the world as of 2022 by Eurogamer.

Destiny (2014)

Destiny received quite a bit of criticism when it was initially launched, and it took a novel approach to addressing such critiques – listening to players. Unlike other games, Destiny’s patches, updates and expansions were direct responses to player feedback, with Bungie acting on what the community wanted rather than setting an update schedule purely based on its own agenda for the game. On its release, Destiny called itself a ‘shared-world shooter’ – the PvE element constitutes the majority of the game, while the PvP zones are equally appealing. Destiny features a unique networked mission architecture, something that Bungie has elaborated on in detail.

Destiny achieved a seamless blend of single-player, co-op and multiplayer, using a persistent world made up of public and private spaces. Multiplayer events might be triggered in a public space, or a friend might join in on co-op, while private spaces lock players into campaign goals. The two spaces flow together without interrupting the story.

Destiny made nearly $500 million dollars in pre-orders and day one sales, amassed over 20 million players a year after release, and was the best-selling new IP of 2014.

Rainbow Six Siege and Rocket League (2015)

On paper, Rocket League’s premise seems absurd – soccer (football) matches between player-controlled vehicles. After a low-key initial launch, the game gained a massive following thanks to its fast-paced, intensely competitive gameplay and sustained developer support. The game was also offered for free on the Playstation Plus service for about a month, increasing its visibility and making it the most downloaded PS4 game of 2016. The game received the Best Sports/Racing Game award at The Game Awards of 2015. When it went free-to-play in 2020, it crossed one million concurrent players.

Rainbow Six Siege had a bad initial start but turned things around to become an important multiplayer FPS game emphasising strategy, taking a cue from Arma 3’s tactical elements. Ubisoft achieved one of the industry’s most impressive turnarounds by adopting a games-as-a-service model for Siege, releasing a slew of content updates and patches to bring the game up to scratch and eventually garnering 25 million users. The game also maximised its appeal by morphing into a hero-based shooter, giving playable characters unique abilities. Rainbow Six Siege is now a major esport.

The Shift toward Mobile Multiplayer

As early as 2011, Mojang realised that Minecraft would work very well as a mobile game and released the Pocket Edition in 2011. The mobile Minecraft title had mostly the same feature set as the PC game, and would go on to become one of the top-grossing mobile game apps. The shift to mobile multiplayer had already begun.

Clash of Clans (2012)

One of the earliest successful mobile multiplayer games was Clash of Clans, which offered complex team-based gameplay over mobile devices. Set in a persistent world, the player is a village chief. Raiding other villages for important resources, unlocking new troops and bolstering the defences of your own village against attacks form the core gameplay elements of the title. Players can also team up to form clans (of upto 50 players) and battle other clans, chat with friends and more. In 2021, Clash of Clans generated nearly $490 million in in-app purchase revenues, and remains the second most popular game by daily user counts in the US.

Hearthstone (2014)

The free-to-play PC and mobile game Hearthstone: Heroes of Warcraft achieved an unexpected degree of success, proving that a digital collectible card game could be just as successful as similar games played with actual cards. Blizzard used the lore, characters and other elements of the Warcraft franchise to full effect to create a fun, fast-paced card game with eye-popping graphics. The developers worked hard to recreate the experience of a real card game with the user interface, digitising assets from the earlier physical World of Warcraft Trading Card Game. The game’s success is attributable to faithfully adapting a traditional deck-building experience in a digital environment, keeping games short, offering a variety of match types, releasing regular expansions with new cards, and even letting you admire your card collection with special views. Hearthstone reached 100 million players by 2018, had a user base of 23.5 million by 2020 and nearly 4 million players play it across platforms as of 2022. It has made more than $700 million since launch. It has its own esports scene as well.

Honor of Kings (Arena of Valor, 2015)

The mobile MOBA (Multiplayer Online Battle Arena) Honor of Kings is one of the most successful mobile games of all time, registering 100 million active users per day, becoming the first mobile game to make $10 billion in revenue, and becoming the leading mobile game app in China. Ironically, it might have never come about if Riot Games had agreed to parent company Tencent’s request for a mobile version of League of Legends. The LoL creators did not want to dilute the game’s brand with a mobile knock-off, and Tencent turned to another subsidiary, TiMi Studio Group, for a new mobile MOBA IP. The result was Honor of Kings, a MOBA game that features multiple competitive modes, a PvE mode and even a standalone mode when the player is offline. An international version, known as Arena of Valor, was released for Western regions in 2016, with greatly altered heroes to fit the target market. The MOBA has many key virtues – you can easily set up battles with friends, and the fast-paced stand-offs last just 15-20 minutes, The game had all the key MOBA elements but was still easier to master than Dota 2 or League of Legends, creating a low barrier to entry, and its seamlessly integrated social elements kept players engaged with each other. The massive success of the MOBA led Riot Games to reassess its stance on a mobile version of LoL – it would release League of Legends: Wild Rift, a modified version of LoL, for mobile in 2020. Since late 2021, Wild Rift has been drawing in about 15-20 million players each month.

Clash Royale and Pokemon Go (2016)

Mobile multiplayer fans would get their hands on not one, but two innovative mobile titles in 2016 – Supercell’s follow-up to Clash of Clans – Clash Royale, and Niantic’s revolutionary Pokemon Go, which would use augmented reality as the basis of its gameplay.

A gamesindustry.biz article asserts that Clash Royale’s innovative gameplay powered it to displace lacklustre titles from the top of mobile grossing charts. Clash Royale cleverly combined aspects of tower defence, MOBA, and card-based battles to instantly become one of the top grossing games in the world a month after its release. Clash Royale offers accessible but deep gameplay, fast synchronous multiplayer that lasts only minutes, ending in a nail-biting stand-off between competitors, and well-integrated social elements. It is hailed as a smart game that rewards strategy and delivers a complex, tactical experience on a small screen. The game crossed $3 billion in lifetime player spending by 2020, and as of 2021, has been downloaded more than 500 million times.

While many of the games listed here bring interesting genres to mobile, Pokemon Go is altogether a different beast. Niantic used augmented reality to overlay Pokemon on real-life locations, which would be visible to players through their phone camera. A swipe of a ‘Poke ball’ would ‘capture’ the Pokemon. One of the biggest selling points of Pokemon Go was that players had to step outside to capture Pokemon – it was probably the first game that actually took place in real-life settings. The game garnered more than a 100 million players on mobile phones within a month of its release.

After reaching a certain level, players can experience the game’s multiplayer aspects – they can battle at a Pokemon Gym and join one of three colour-coded teams – red (Valor), blue (Mystic) and yellow (Instinct). The three teams vie for control of the strategic Pokemon Gyms around the world – not only do the Gyms host raids, but also allows your owned Pokemon to earn coins, which can be spent on upgrades and items at the in-game store. Updates to the Gym mechanic brought cooperative raiding and the chance to take down large-sized Pokemon together, and the game continues to get updates.

The game peaked at 232 million active players in 2016, and is still going strong – 71 million people played the game in 2021 and the game has been downloaded over 500 million times. The game has amassed $5 billion in lifetime revenue by 2021, and much of this revenue has come from the United States.

2016-2020: The Rise of Hero Shooters and Battle Royales

The first half of the decade saw the release of online multiplayers games so unique that it is difficult to imagine them sharing the same demographic. Of course, dedicated multiplayer fans would have played all these games to fully enjoy the variety on offer. In the latter half of the 2010s, online multiplayer games would be characterised mostly by the hero shooter and battle royale genres, though some unusual games, such as Sea of Thieves and Among Us, would make their mark on the online multiplayer genre.

The Rise of the Hero Shooter

Overwatch (2016)

Overwatch has been imitated by multiple developers, and for good reason. The game’s distinctive roster of hero characters is not new – Team Fortress (1996) would also feature unique characters who performed different functions during competitive missions, but Overwatch took that concept and added MOBA elements to fashion the hero shooter as we know it today. The heroes of Overwatch have outrageous powers and going one-on-one against a single one of them would be difficult – but the 6v6 player structure ensures the game remains accessible – each team brings its own ridiculously overpowered band of heroes into play – each with their own special attacks that are easily learned by watching guides. Team-based plays revolve around one character facilitating the powers of one another in a special set of moves. Winning in Overwatch hence entails having an intimate knowledge of the strengths and weaknesses of the 32-character roster, knowing which hero can totally neutralise an opponent’s character, and managing your own weaknesses – your opponent knows as well as you do that each hero has a counter who can negate the hero. Within a year, Overwatch had made more than $1 billion, and had 30 million registered players, becoming Blizzard’s fastest-growing franchise. As of 2022, Overwatch draws in about 8-9 million players each month.

Multiple Games Adopt the Hero Shooter Formula

We discussed above that Rainbow Six Siege grew in popularity once it became a hero shooter like Overwatch. But Siege was hardly Overwatch’s only imitator. According to a PC gamer article, hero shooters have ‘become the de facto mould of what multiplayer shooters should look like in 2022.’

Rainbow Six Siege was one of the first games to adopt the hero roster formula, adding mercenaries and criminals to its array of ‘Operators’. The game now features far more female and trans characters. Each Operator, like a hero from Overwatch, has special abilities and even plays a critical role in PvE experiences. The game’s use of Operators ‘with more flair’ has been credited as one of the reasons for its turnaround after a bad launch.

Even games that have never been hero shooters have taken cues from Overwatch. The latest iterations of Call of Duty have featured distinct playable characters, while Battlefield 2042 changed the series’ anonymous classes into unique personalities. Even CS:GO, one of the most traditional first-person shooters, now has unlockable skins that let you enter battle by picking a favourite agent.

Apex Legends would combine the hero shooter with the other prominent genre of the late 2010s – the battle royale. We will deal with Apex Legends in our discussion of the battle royale genre below.

Valorant (2020)

The hero shooter Valorant was Riot Games’ answer to titles like CS: GO, Rainbow Six Siege and Overwatch – a highly-accessible tactical shooter involving 5v5 matches where one team tries to plant a bomb known as the ‘Spike’ and the other works to stop them. The first team to win 13 rounds is the victor. In unrated games, if both teams have 12 wins each after 24 rounds, the 25th round serves as a ‘sudden death’ tie-breaker. In competitive games, if scores are tied after 24 rounds, a team has to win two consecutive rounds to secure victory.

Valorant differs significantly from the games that it draws inspiration from. Unlike the heroes in Overwatch, none of Valorant’s heroes will survive a critical shot. Each player is an agent with distinct abilities, one that is in-built, and two others that you can buy at the game’s beginning. Another ‘ultimate’ ability gets charged by surviving multiple rounds. Valorant is a traditional shooter in that kills are based on your aim and skill with a weapon. But the special abilities impart intel, create killing zones and can even blind opponents to give players a better chance at scoring kills. As such, mastering the game and winning the best of 25 rounds depends on both your shooting abilities and skillful deployment of special powers. This combination makes for gameplay that is a blend of control and chaos, and reviewers praised the game for breaking new ground. By January 2021, the game had overtaken CS:GO in earnings, and it is now a major esport and has drawn in nearly 20 million players per month for the last year.

Battle Royale takes Centre-Stage

Hero shooters such as Overwatch enjoyed massive popularity – until a new genre – the battle royale – began to grow in popularity. One of the biggest phenomena in gaming – Fortnite – is a battle royale that has since morphed into a metaverse-like experience, and we discuss the important battle royale games below.

PUBG: Battlegrounds and Fortnite (2017)

Like so many genres before it, the battle royale got its start as a mod – in fact, as a mod for a mod. DayZ fan Brendan Greene (known as PlayerUnknown) initially released a mod for DayZ where players were thrown into a shrinking map and had to kill each other until a last player remained. He would then use Arma 3’s resources to create a total conversion featuring battle royale, with an aircraft that dropped players into a large map to fight it out amongst each other. In 2016, Krafton studios invited Greene to create a standalone version, which would result in PUBG: Battlegrounds, earlier known as PlayerUnknown’s Battlegrounds.

The simple premise of PUBG (and other battle royales) may well be the reason for its enduring popularity. A number of players (upto a 100 in PUBG) are dropped to an area with no weapons and must hunt for arms in order to go up against other players. Weapons and other items can be looted off killed opponents as well, and the map size shrinks every few minutes, forcing the players closer together and increasing the frequency of PvP encounters. Players can enter the dropzone individually or play as teams, and must also choose the right time to parachute off the aircraft. As players kill off each other, the last player or team standing wins.

At over 75 million copies sold for PC and consoles, PUBG is the best-selling game on PC and Xbox One, and the fifth-best selling game of all time. Since 2020, the game has been drawing in a staggering 300-400 million players each month.

Fortnite Battle Royale – one of the most popular games in the world, and a cultural phenomenon in its own right – took direct inspiration from the success of PUBG. Epic Games realised that they could create a battle royale version of Fortnite with ease and released it after two months of in-house development. It had much the same gameplay as PUBG, though it also featured a building mechanic where players could construct structures to fend off attacks from enemies and traverse the game map. Within a year of its release, the free-to-play game had 125 million users and was making huge sums from microtransactions, making more than $9 billion by 2019, and making $5.8 billion for Epic in 2021. It has been drawing in more than 250 million players a month since 2020.

Fortnite is more than just a successful game – it transcends gaming with its live concerts, crossover events, skins from other important media franchises and more. Its huge registered player base of 400 million allows it to experiment with metaverse-like experiences, as we have discussed elsewhere.

Battle Royale Becomes a Craze

The massive success of the battle-royale mode spawned a number of imitators, both in the console/PC and mobile space. The first IP to join the bandwagon was Call of Duty, which introduced a battle royale mode called ‘Blackout’ in Call of Duty: Black Ops 4 (2018). Supporting up to 100 players, Blackout took place in the largest map yet in a CoD title and made full use of the fluid movement and controls of the franchise to create a fast-paced battle-royale mode that even drew in players already tired of battle royales.

Not to be outdone, Electronic Arts introduced a battle royale mode called ‘Firestorm’ to Battlefield V (2018), and, like Activision, featured the battle royale in the biggest map to date in a Battlefield game. The battle royale mode supports 64 players, who can compete in squads of up to four players.

EA then followed this up with a new IP (based partly on Titanfall) that combined elements of both the battle royale and the hero shooter in one addictive package: Apex Legends (2019). Legends is a gorgeous game with an incredibly detailed game map – knowing the map’s ins and outs confers a significant tactical advantage. It introduced many other innovations such as dropships, care packages (loot drops) and the highly efficient non-verbal ping-based communication between teammates. Each hero also brings distinctive playstyles to player squads, and a steadily growing roster of heroes keeps the game fresh. In a little over two years, it had 100 million players and has made more than $2 billion as of mid-2022.

Activision responded with Call of Duty: Warzone (2020), in which the battle royale mode predominated. While it featured much the same elements as the battle royale mode in Black Ops 4, it also encouraged players to amass Cash – in-game currency – in order to buy killstreaks and special items, and allowed upto 150 players to play in the free-for-all, in teams of up to four players. Within a year, the game had 100 million users and Warzone made nearly $4 billion in the first two years following its release.

Even mobile gaming is characterised by highly-successful battle royale IPs such as Fortnite, which began life as a cross-platform game released for PC, consoles and mobile, and PUBG Mobile (2018), which crossed $7 billion in lifetime revenue by 2021 and Garena Free-Fire (2017), which became the most downloaded mobile game in 2019, and has made more than $4 billion in the two years since its release.

Even a tetris game available on the Nintendo Switch – Tetris 99 (2019) – has battle royale elements, as does the open-world racing sim Forza Horizon 5 (2021), which offers the ‘Eliminator’ battle royale mode.

New Styles Emerge, Old Ones Return

The second half of the decade was not just an unbroken series of hero shooters and battle royales – they were merely the most popular genres around.

2018 saw the release of three innovative multiplayer titles, A Way Out, Among US and Sea of Thieves. The first featured only a two-player cooperative campaign, without any single-player version, and could be played in couch co-op mode or over the internet with a friend. The developer of A Way Out, Hazelight Studios, released another co-op game called It Takes Two in 2021, building on its formula of telling a compelling story purely through multiplayer mode.

Sea of Thieves is a rollicking pirate adventure with sea battles between player crews, and went on to become highly popular, holding its own against battle royales and hero shooters during the height of their popularity. It sold five million copies on the PC platform Steam by 2021 and has drawn in 15-17 million users per month since 2020.

The multi-platform game Among Us (2018) was yet another innovative title, which features asymmetric multiplayer – the game consists of a team of crewmates and a smaller team of impostors, both of whom look alike and work in the same area. The crewmates should complete all tasks in the allotted time or vote out all impostors, while the impostors should sabotage crewmate activities, kill crewmates without being detected or unleash a disaster that cannot be solved in time by crewmates. It was largely ignored upon release until pandemic shutdowns resulted in a massive spike in user counts – the game amassed nearly half a billion players in 2020, and has drawn in nearly 400 million players per month since late 2020.

The free multiplayer mode of Halo Infinite (2021), replete with classic Halo multiplayer elements and the new grapple-shot mechanic, became the most popular Xbox title on Steam within less than a day of its launch. In about a month, nearly 20 million players had joined the fray.

Games like Escape from Tarkov (beta release 2017) and The Cycle: Frontier (2022) also indicate the emergence of a new multiplayer play style, where players are dropped into common zones but can choose freely between co-op and PvP mode – there is no need to be the last man standing – each mission has its own objective quite apart from killing other players. Like DayZ, Tarkov and The Cycle are PvPvE matches – both the environment and other players pose a challenge, but you can cooperate with the latter.

The battle royale and hero shooter might be the biggest players in town, but game developers appear to have outgrown the need to copy the two genres.

The Pandemic and Multiplayer

Online multiplayer games – for PCs, consoles or mobile – draw in millions of players every month. It might be tempting to criticise them as addictive time-sinks, but the popularity of multiplayer during the pandemic tells a wholly different story.

According to the BBC’s Life Project, online multiplayer became a social lifeline during the pandemic lockdowns and gamers successfully built supportive communities around the games they loved, forging strong friendships. Playing with friends online has also been studied as a healthy replacement for in-person contact when lockdowns prevent such interaction.

Existing friendships have thrived and people have actually grown their network of friends during the pandemic via multiplayer, social gaming and connecting over the gamer-focussed Discord, a VOIP and instant-messaging platform – gaming gives people a way to share fun, light-hearted experiences during dark times. As a result, people have reported overwhelmingly positive experiences from gaming, especially thanks to its potential for social interaction via multiplayer. In fact, dedicated MMO players have reported feeling a strong sense of social identity, a higher sense of self-esteem and decreased feelings of loneliness even before the pandemic.

VentureBeat attributes the rapid evolution of the social aspects of mobile gaming to the pandemic, because such features allowed people to stay connected while socially distanced, as they played inexpensive but interesting mobile games together.

It is no surprise, then, that the gaming industry registered record gains during the pandemic, growing 12% to $139 billion in 2020 amidst widespread lockdowns. Despite a contracting PC and console market in the post-pandemic period, the overall industry is poised to grow at a compound annual rate of 11% through 2024 to hit a record $200 billion in worth.

Conclusion

Online multiplayer has grown massively this decade, with games supporting millions of players across platforms, with even mobile multiplayer coming into its own. While the pioneers of the previous decades had to innovate just to make multiplayer a viable option (remember the code optimizations for QuakeWorld and Unreal Tournament), the developers of this decade have worked hard to make the most of matured internet infrastructure.

After several innovative entries in the multiplayer genre, and the prominence of hero shooters and battle royales such as Overwatch, PUBG and Fortnite, we see an increase in variety, with titles such as The Cycle, Among US and the instant success Multiversus, which crossed 20 million players within a month of launching its open beta.

The success of such games suggests that new online multiplayer games can offer a wide range of experiences and maintain huge fan bases – not participating in a zero-sum game for the players’ attention, but adding to an overall online multiplayer experience far greater than the sum of its parts.

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29 AugustMulti Player Video GamesVideo Games

The Rise of Online Multiplayer

by Karthik Balasubramanian0 Comments

Multiplayer games have always been a major aspect of gaming – whether through the internet or local area networks or just co-op mode for playing together in-person. Such games are among the most popular titles in gaming, many of them have become massive esports, and multiplayer gaming itself has evolved steadily over the years to become increasingly complex and nuanced. In this blog we will discuss the history of multiplayer gaming, from the 1980’s to 2010, with a special focus on the two decades from 1990 to 2010, when multiplayer evolved rapidly and matured into a staple of our gaming experience.

What is Online Multiplayer and Why it’s Important

A multiplayer video game can be played by more than one person in the same game environment simultaneously – either locally, on the same computing system, or through networks shared by multiple systems. Online multiplayer refers to games played over the internet and networked multiplayer refers to games played on different systems through a local area network. In a multiplayer game, players or teams of players can compete with each other or cooperate toward a common goal. Multiplayer games involve a social element not found in single-player titles and can also offer a higher level of challenge as compared to playing against AI.

Modern multiplayer games often share certain common characteristics – various ‘modes’, which may involve competition or cooperation, a progression system with ‘unlockables’, a steady stream of new content (though this is more applicable to live-service games in general), a system by which players can communicate using voice and/or text, a dedicated server or a single terminal hosting the game, and more.

A look at Steam stats reveals that multiplayer games are among the most-played, with thousands of daily users. There were 932 million online gamers by 2020 and as of 2022, 54% of the most active gamers worldwide play multiplayer games at least once a week, for seven hours on average. As of 2022, 83% of US gamers play with each other, either in person or online. In comparison, the figure was 65% in 2020. This spike is attributed to Covid-period lockdowns – in fact, the multiplayer game Among US (2018) surged in popularity during the pandemic, amassing a user base of nearly half a billion players. The global online gaming market size was valued at $56 billion in 2021 and is expected to grow to $132 billion by 2030, at a cumulative annual growth rate of 10.2%. In the following sections, we will delve into the history and evolution of multiplayer and its rise to prominence among gamers.

The Origins and Early History of Online Multiplayer

The early years of online multiplayer saw the advent of multi-user dungeons, or MUDs, where multiple players engaged in text-based games through typing commands. This was followed by the arrival of multiplayer FPS in the ’90s– legendary games such as Doom and Quake not only pioneered the FPS genre as we know it today, but also created multiplayer modes that allowed gamers to team up with or fight against each other. Over the course of the decade, as the internet became commonplace, many MMORPGs emerged to the fore, whose graphics brought to life the text-based experience of the early MUDs.

Early Years: The Multi-User Dungeon and the Internet

In 1978, two University of Essex students, Roy Trubshaw and Richard Bartle, created a multiplayer adventure that they would call ‘MUD’, or multi-user dungeon. The text-based game was a revelation that allowed you to live in a persistent fantasy world through the networked computers of the institute. A persistent world is a virtual environment that changes dynamically even when the player is logged off. The world continues to exist on the network, enabling other players to continue playing, thereby presenting new activities to any player who logs back in after a certain interval. Bartle and Trubshaw’s text-based world may not have had any graphics to speak of, but its dynamic persistent world gave the fantasy environment a life of its own, independent of player actions

A MUD can be text-based or may use storyboards to flesh out its world. MUDs combine elements of role-playing games, interactive fiction and online chat to create a real-time virtual world where players interact with the game world and each other using text-based commands. Bartle and Trubshaw’s game counts as one of the first of its kind and was also the first MUD to be playable on the internet, when the university connected its internal network to the ARPANET. Multi-user dungeons with persistent worlds would influence the MMORPGs to come.

In 1985, University of Virginia classmates John Taylor and Kelton Flinn created a MUD-like game called Island of Kesmai, a multiplayer adventure that used ASCII-based graphics. Considered a direct forerunner of subsequent MMORPGs, the game was available on the early CompuServe online service and allowed upto 100 players to play simultaneously.

The Emergence of Multiplayer FPS

Multiplayer gaming over networks came into its own in the 1990s, with the release of major first-person shooter titles such as Pathway to Darkness and the legendary Doom in 1993. The games’ multiplayer modes led to the birth of the LAN party – people coming together and creating a local area network to play multiplayer games together.

Doom was not just a revolutionary game, it also pushed multiplayer to new directions. The game offered networked multiplayer supporting two-player teams, and a special matchmaking service known as DWANGO supported online multiplayer, allowing four-player teams to either cooperate in Doom’s main campaign or fight against each other in a deathmatch mode. Doom was one of the first games in the world to offer online multiplayer via a matchmaking service. It was also a highly popular LAN party game, along with Pathway to Darkness, and Marathon (1994), another first-person shooter. Multiplayer over LAN would remain prominent until the internet became more widespread and ushered in online multiplayer on a large scale.

The same year Doom was released, CERN made the software for the world-wide-web open source – a move that would eventually result in our world of browsers, email, streaming services and internet-based multiplayer games played by millions of people simultaneously. Just three years after the world wide web went open-source, id would release Quake, a major milestone in online multiplayer gaming.

Quake was not only the first game to feature full real-time rendering of 3D environments and 3D acceleration, it was also the first game to enable online multiplayer over TCP/IP on the internet. Multiplayer was easier than ever before because all one had to do was enter an IP address and connect with a friend or a server over the internet to play cooperative or competitive multiplayer. The multiplayer mode ran on dedicated servers, but Quake also allowed players to turn their own machines into custom servers.

In december 1996, id released QuakeWorld, an update to the Quake engine, which introduced a network optimization feature called client-side prediction to enable an online gaming experience comparable to single player even for players on high-latency connections. An IGN article describes the QuakeWorld update as the first successful large-scale implementation of online multiplayer mode. In 1997, id hosted a nationwide esports tournament in the US called Red Annihilation, featuring Quake, and the winner, Dennis ‘Thresh’ Fong, won a 1987 Ferrari 328 GTS cabriolet that belonged to John Carmack, the wizard behind Quake, Doom and many of id’s hit IPs.

Multiplayer Grows in Variety

The late ’90s saw the arrival of yet another hugely popular multiplayer genre – the massively multiplayer online role playing game. In an MMORPG, players adopt the role of a character with distinct abilities, traits and weaknesses and take part in a huge persistent world filled with thousands – even millions – of concurrent players. Progression is a key aspect of the MMORPG, where player actions earn them points that they can then use to level up their skills. Like classic MUDs, the world of an MMORPG continues to change even when the player is offline.

MMORPGs such as Meridian 59 (1996), Ultima Online (1997) and EverQuest (1999), emerged as internet technology matured in the 90s – they were still called ‘graphical MUDs’, evoking their origins in the MUDs of the 80s, and featured persistent worlds with real interactions with other online players, and made their mark as a new genre for online multiplayer.

While Meridian 59 and Ultima Online helped establish the MMORPG, EverQuest built on the genre’s potential. The game offered a great degree of player choice, a huge world ready to explore and (for its time) high-quality graphics. The title boasted 10,000 active subscribers 24 hours after its launch, and within the year, it had 150,00 active subscribers. EverQuest continues to be played, with a user base of 66,000 subscribers.

Soon after EverQuest, the real-time strategy (RTS) title StarCraft (1998) emerged as a major online multiplayer game. Blizzard’s StarCraft built on the popularity of the RTS genre, which had successful franchises such as Sid Meier’s Civilization series, Age of Empires, Command and Conquer, and WarCraft – StarCraft would introduce sophisticated multiplayer gameplay to this genre.

StarCraft’s multiplayer mode was facilitated by Blizzard’s Battle.net, a free game hosting and matchmaking service that helped StarCraft – and other Blizzard games – reach huge audiences. By the time StarCraft’s expansion, Brood Wars, was released, the title had become a phenomenon in South Korea, which accounted for a third of StarCraft’s global sales, and spawned a professional esports scene that was broadcast over South Korean media. Starcraft’s masterful game balancing and potential for complex strategies enhanced its multiplayer greatly, allowing for immense variation in gameplay. The game’s success led to increased usage of Blizzard’s Battle.net service, which hosts tens of millions of active players across Blizzard’s library of games today.

The FPS genre then made a resounding comeback in 1999 with the release of Epic’s Unreal Tournament and id’s Quake III Arena, both of which would make multiplayer the main gameplay mode – the first Unreal game released in 1998 did not deliver good multiplayer gameplay, and it became a top priority to improve the multiplayer code, with Epic CEO Tim Sweeney even apologising for Unreal’s poor multiplayer. Epic intended to deliver the updated multiplayer gameplay as an expansion for Unreal, but then decided to make a standalone, multiplayer-focussed instalment called Unreal Tournament, which was hailed as one of the best multiplayer games of the year, along with Quake III Arena. Both games dispensed with plot-based single-player campaigns and featured single-player modes that merely pitted players against bots. Even now, critics cannot decide which offers a better experience – both are incredible in their own ways. The Unreal Engine, used to build Unreal Tournament, would go on to become an industry-standard game engine that would spawn a host of award-winning titles.

Another important FPS multiplayer game released in 1999 was Counter-Strike, a Half-Life mod that would later be purchased by Valve after the title became a staple of LAN events and a hugely successful multiplayer experience. Like StarCraft, CounterStrike would spawn its own esports scene.

The Development of Multiplayer in the 2000s

By the second half of the nineties, the internet and the world-wide web had become commonplace. The web rose in prominence until the dotcom crash in 2000, and within a year, dotcom companies had folded, wiping out trillions of dollars of investment.

RuneScape (2001) emerged from the ruins of the dotcom bubble to become one of the most enduring MMORPGs of all time. RuneScape is playable in a browser and was supported purely by ads until the crash. It pivoted to a freemium model, where premium users got access to more content, after the dotcom bubble burst. The browser-based MMORPG drew in droves of players, and continues to attract gamers today – nearly 17 million players are estimated to have played RuneScape, and in 2020, it reached its highest-ever concurrent user count, at more than 170,000. RuneScape’s success indicated that online multiplayer games could weather market crises and the 2000s were marked by constant innovation in the field.

Console Makers Enter the Fray

Microsoft launched Xbox Live in 2002, a dedicated service for online multiplayer that would become hugely popular with the release of Halo 2. While the first game in the Halo franchise (2001) was shipped before Xbox Live, its sequel, Halo 2 (2004), offered multiplayer modes with the Xbox’s unified online service. While many aspects of Halo 2 were lauded by gamers and critics alike, it is now known for ‘changing online multiplayer gaming forever’ and is considered the ‘game which showed the world how console multiplayer should be done’.

Until Halo 2 launched, few gamers were using Xbox Live, although the Xbox itself offered sophisticated broadband compatibility at a time when the technology was still uncommon. By the time Halo 2 was released, broadband infrastructure had grown widespread, and Halo 2 could exploit the possibilities of Xbox Live to the fullest, creating an unprecedented online multiplayer experience on console. While Halo: Combat Evolved had become the killer app for the Xbox, Halo 2 became the killer app for Xbox Live, and made console-based online gaming straightforward and intuitive.

Sony’s PlayStation 2 also offered online multiplayer with a separate network adapter, which was integrated later with the PS2 Slimline model. The console offered both dial-up and broadband-based connectivity and networked multiplayer using ethernet cables or a router network. Unlike Xbox Live, which functioned as a unified service for all Xbox games, providing online multiplayer for PS2 games was the responsibility of the publisher, who had to use third-party servers.

Sony would catch up with Xbox Live in 2006 with the PlayStation Network – a free, unified service for online multiplayer for the PlayStation 3 that also featured an online store from which to buy games digitally. Online gaming was free for the PS3, but required a subscription to the PlayStation Plus service for the PS4 and PS5. The introduction of online multiplayer for consoles would lead to many games offering the feature out of the box, making online multiplayer gaming a staple for gamers, despite the fact that both Microsoft and Sony charge for the service.

Modders Create a New Multiplayer Genre: MOBA

In 2003, a WarCraft III fan released a mod called Dota – Defense of the Ancients. The mod would spawn an entirely new genre in gaming, the multiplayer online battle arena (MOBA). Dota enabled players to control hero units and fight an opposing team across three lanes that connected each team’s base. The game involved two teams of five player-controlled characters that battled each other, with the mission being to destroy the opposing team’s base. Soon, other modders were creating their own version of the map, adding new heroes and items.

Eventually, modder Steve Feak would develop Dota Allstars, a version that would incorporate the best elements from multiple Dota iterations, and would become the most popular version of the mod. As the game was a modification of WarCraft III, modders could not add any original content (such as models/textures or characters) not provided in the modding resources released by Blizzard. Nor could Dota’s popularity result in any monetary gains for the modders.

Steve Feak would hand over the reins of managing Dota to IceFrog, who would go on to collaborate with developers at Steam to release Dota 2 in 2013, one of the biggest esports in the world in terms of prize pools. Feak would himself be hired by Riot Games to develop the free-to-play MOBA League of Legends, one of the most popular esports in the world. A fan-made mod has spawned not one, but two major esports and changed gaming – especially online multiplayer gaming – forever.

Online Multiplayer Goes To War

Around the time when Dota was becoming a phenomenon, two studios released two FPS titles that changed both online multiplayer and the FPS genre beyond recognition. In 2002, Electronic Arts released Battlefield 1942, and in 2003, Activision released Call of Duty, marking the start of a rivalry that has lasted nearly two decades. Both games had a World War II setting, and both of them fleshed out this conflict in masterful detail.

Both games excelled at multiplayer – the Encyclopaedia Britannica credits Call of Duty for breathing new life into the multiplayer FPS genre spawned by Quake and Unreal Tournament. The first Call of Duty title was a visceral experience, set in World War II, and featured immersive audio-visual effects – when the player is close to an explosion, sounds are muffled, there is a ringing noise in the ear (simulating tinnitus) and vision is blurred as well. The game also featured excellent NPC AI (who are programmed to flank the player and move from cover to cover) and its multiplayer features could easily be modded by gamers themselves. Call of Duty: Modern Warfare (2007), would take the IP to modern settings and advance the multiplayer experience even further, with the introduction of killstreaks, where the player gains special abilities by killing opponents without dying. Staying alive while killing your enemies allowed you to call in UAV reconnaissance scans, airstrikes, and even attack helicopters.

Battlefield 1942’s contributions are just as significant – its online multiplayer allowed for epic, chaotic battles fought by dozens of players in large, detailed maps. The game established the 64-player online gameplay of the series, set in environments with multiple vehicles that you could use while battling with your foes. Its 22 maps were actual real-world settings such as El Alamein, Iwo Jima and Stalingrad from World War II. The game’s numerous vehicles, including tanks, planes, carriers and even submarines, added to the chaos of multiplayer and resulted in innovative tactics. The game’s active modding community introduced various weapons, settings and themes to the title – the well-known Desert Combat mod added modern assault rifles, rocket launchers, helicopters, and planes, while total conversions such as Galactic Conquest attempted to turn the game into a Star Wars title.

The two franchises dominated online multiplayer during the 2000s, and have continued to remain popular, releasing a new game every year. The Call of Duty franchise’s popularity has grown dramatically in recent years, following the release of its first mobile title in 2019 and its free-to-play title Call of Duty: Warzone in early 2020 – the series’ user base grew from 70 million in 2018 to more than 250 million in 2020.

Massive Communities and the Proto-Metaverse

The success of multiplayer games starting from RuneScape to Call of Duty would set the stage for the behemoth that was World of Warcraft (2004). The MMORPG still boasts a huge player count and it is known for its large expansion packs, complex lore and gameplay. It has been praised for its fluid combat, and the classic version of the game, as opposed to the retail version, is also known for being more challenging. Despite being around for nearly two decades, WoW is still very accessible, allowing new players to experience it on their own terms, and the latest expansion Shadowlands even includes the tutorial phase, like in the first release of WoW. The game boasts a total of over 120 million registered players.

But World of Warcraft is not just about gaming – the game would implement many features that would later be associated with today’s nascent metaverse. WoW was not the first game to come up with player-driven economies, social gathering points or the sale of virtual real estate, but it was the first widespread game to make these features part of the gaming landscape. With its massive community and metaverse-like features, WoW can be considered a proto-metaverse, and we have argued elsewhere that Microsoft’s purchase of Activision Blizzard qualifies as a metaverse play, precisely because Activision Blizzard is used to handling an enormous global community and can help Microsoft get a headstart on its metaverse initiatives.

Second Life (2003) is another title that can count as a proto-metaverse – it is a vast 3D virtual world and platform where people can interact with each other and with user-generated content in real time. Players, known as ‘residents’, create a digital avatar and freely explore the world, create their own content and even trade goods and services with the in-world currency, the Linden dollar – Second Life hence boasts a thriving in-world economy. The platform has a daily average of 200,000 users from 200 countries, and over 70 million users spread out over 27,334 regions in the world.

Unlike games, Second Life has no goals or objectives and social interaction is the core aspect of the experience. Residents have married and even raised children, and created communities with unique customs. The game actively fosters such interaction by ensuring that everyone in any part of the platform will experience the same thing – Second Life consists of an integrated space and not disparate instances.

The platform even created an early version of the non-fungible token – the digital assets in the world contain tags that record who made them, who owns them, what they cost and what a buyer can do with them.

While the platform has been hailed as one of the longest-running experiments in a metaverse-like experience, creator Philip Rosedale is sceptical about present-day metaverse initiatives. Rosedale believes that a true metaverse would have to be built by its users rather than software companies, just as Second Life residents create digital assets to enhance their virtual world. Rosedale is also wary of the blockchain, and believes that the metaverse needs a centralised economy to prevent wealth disparity. Second Life is not just a proto-metaverse, it has yielded insight into the possible problems with current conceptions of the metaverse.

Multiplayer Matures, Becomes the Norm

By the late 2000s, online multiplayer was ubiquitous – and some of the best games of the decade were focussed on delivering memorable (and addictive) multiplayer experiences, supporting millions of connected players.

Console games such as Halo 2 and its sequels thrived on the back of their multiplayer mode, modders created an entire genre of multiplayer – MOBA – on their own, games like Battlefield and Call of Duty raised the bar for what could be achieved in multiplayer FPS and became a staple of the multiplayer gaming scene throughout the 2000s and beyond, and MMORPGs such as World of Warcraft and the social platform Second Life led to the formation of massive online communities that persist to this date.

Throughout the course of the 2000s, long-running sports game franchises such as FIFA, Madden and NBA also started to offer robust multiplayer on multiple platforms and spawned their own esports communities and events.

League of Legends was released towards the end of the decade and is one of the first MOBA games to launch as free-to-play, and to employ a live-service model with continual updates, new heroes, and game-balancing patches. The League of Legends franchise, comprising multiple games, registered a staggering 180 million active players in October 2021. The desktop version is one of the highest grossing free-to-play games as well, and its mobile version is one of the most popular mobile MOBA games as of 2022. Many multiplayer-focussed titles of the 2010s would take a cue from LoL and go free-to-play, deriving revenues from cosmetic upgrades and other microtransactions.

Conclusion

Online multiplayer began as text-based adventures and matured into massively multiplayer games with high-fidelity graphics that support millions of active players. This evolution was spurred in part by developments in internet technology, but was also the result of game developers pushing the limits of what could be achieved with the network infrastructures they had access to. The early MUDs depended on university networks and then the ARPANET, while Doom used a matchmaking service based on a dial-up connection until the arrival of the internet, which QuakeWorld, Unreal Tournament and Quake III Arena used to maximal effect with code bases optimised for online multiplayer.

The efforts of these pioneers led to widespread online multiplayer in the 2000s, where millions of gamers could participate in MMORPGs, MOBAs, multiplayer FPS games and more. The development of online multiplayer, especially from the ’90s to the 2000s, is characterised by ceaseless innovation and pushing the limits of what can be achieved in a multiplayer experience over the internet.

In a subsequent blog, we will discuss current trends in online multiplayer – the shift toward mobile multiplayer, the rise to prominence of the hero shooter and battle royale genres, and how multiplayer rose in prominence during the pandemic period.

23 AugustOpen World Games

The Evolution of Open-World Games

by Karthik Balasubramanian0 Comments

Learn how open world games evolved to deliver immersive experiences in expansive environments.

09 AugustOpen World GamesVideo Games

An Introduction to Open World Games

by Karthik Balasubramanian0 Comments

On November 11, 2011, Bethesda released The Elder Scrolls V: Skyrim and a week later, Mojang officially released version 1.0 of Minecraft – both were open-world games whose enormous success would make them household names, and they marked a watershed moment in open-world gaming – some of the finest games in this genre would be released in the years following the success of Skyrim and Minecraft.

Open-world games such as these, and open-world franchises such as Grand Theft Auto, Red Dead Redemption and The Elder Scrolls are some of the most iconic and successful IPs in gaming history. In this blog we define open-world games and provide a brief history of the genre from its origins in Elite (1984) to its golden age in the second decade of the twenty-first century. We also cover many of the seminal open-world games – titles that took the genre to new heights.

What is an Open-World Game?

An open-world game features a non-linear game world design where the player is able to freely traverse the environment, which consists of many different areas and structures that can be visited any time. Players are not restricted to a specific path that they have to follow to reach a location, though certain areas of the game can be accessed only after the player reaches a certain point in the game. The open world may be procedurally generated or pre-created.

Exploration is the heart of open-world design – players can access various locations, many of which feature their own biomes, Players can also often tackle missions in any order – many open world games feature side quests and activities that one can pursue while the main questline remains unfinished. An open world contains many usable in-game objects, collectibles and loot, and NPCs who react to what you do, and a game world that can dynamically change based on your actions. Many games feature activities that have nothing to do with character progression – GTA V has golfing, paragliding and more, while Skyrim allows you to play tag with children and read dozens of books. All these qualities of the open-world game engender a strong sense of immersion.

A Brief History of Open-World Games

The history of the open-world game can be traced back as early as 1976, although the first game we would recognize as a 3D open world is GTA III (2001). In this section, we will chart the history of open-world games from Elite (1984) to present-day open worlds such as in Elden Ring.

Early History

Ars Technica considers the 1976 text adventure game Colossal Cave to be the first free-roaming game, though it credits the space sim Elite (1984) for being a game that would be recognizable as open world to modern audiences – its wireframe planets and spaceships can look primitive today but was cutting-edge at the time. Elite used procedural generation to create its universe and instil a sense of vastness.

The Legend of Zelda (1986) emphasised exploration and non-linear gameplay in a world filled with discoverable locations. Though it did not pioneer open-world mechanics, it was one of the first games to make exploration a key aspect of gameplay. As an IGN article observes, Zelda featured simple combat and an overworld that led to dungeons, where you killed enemies and collected treasure, in a gameplay loop that rewarded exploration consistently.

Turbo Esprit (1986) and Vette (1989) could be considered the forerunners of open-world racing or driving games such as Forza Horizon and Burnout Paradise. Turbo Esprit allowed you to choose between four cities, where you tailed drug runners and disabled their cars before they reached their destination. Vette was a one-on-one street racing game set in San Francisco, but you could drive in any direction if you preferred. Both games gave you a city you could drive around, and Turbo Esprit let you choose your own goals, without forcing you into any missions.

Nintendo followed up Zelda with the revolutionary 3D platformer Super Mario 64 (1996), which allowed players to freely explore a 3D world. 3D games had existed before, but Super Mario offered an open-ended free-roaming world. The game also introduced novel jumping mechanics that Mario could use to traverse various platforms, giving a sense of spontaneity to moving around the game world.

The first generation of the Pokemon games (Red, Green, Blue and Yellow) also featured open worlds that could be explored as the player quested to master Pokemon battling and collect all the Pokemon in the world. The subsequent generations of Pokemon games also continued the open-world design philosophy and have been significant in open-world gaming in handheld consoles.

1998 saw the release of the seminal Legend of Zelda: Ocarina of Time, the first 3D game in the Zelda series, set in the expansive world of Hyrule, which Link navigates to defeat the evil king Ganondorf. Player characters could explore the open overworld and its dungeons, collecting weapons and other loot. Many of its side-quests were also optional, allowing the character to chart their own journey to defeat Ganon.

The Rise of the Modern Open-World Game

Grand Theft Auto III (2001), which featured a 3D open world that could be fully explored, can be considered a precursor to the open-world game as we understand it today. Players could go inside some buildings and see the world from street level, kill NPCs and explore the possibilities of a fully-3D world while driving around in vehicles. NPC’s would react to your actions and criminal activity could attract the attention of the authorities. The environment was not just a setting but a real part of the gameplay.

GTA III was the best selling game of 2001, a year filled with watershed games such as Metal Gear Solid 2, Halo, and Super Smash Bros. It has since sold 14.5 mn copies, and inspired multiple clones over the years.

Bethesda released Morrowind in 2002 and Oblivion in 2006, both open-world titles that now rank among the greatest games ever made. Both offered a great degree of freedom, a hallmark of Bethesda’s open worlds. The games featured RPG elements such as character classes, skill progression and more, all of which made each player character unique to the player. Oblivion’s main quest-line and side-quests are some of the most memorable in the Elder Scrolls series.

Test Drive Unlimited (2006) was probably the first recognizable open-world driving game as we know it today. Need for Speed: Underground 2, released in 2004, had set its races in an open world, but Test Drive Unlimited made exploration the main gameplay element. Set in a Hawaiian island, the game turned driving into an ‘open-ended, self-determined and leisurely pursuit’. You could just go for a drive, and the island’s complex system of roads meant that each drive would be quite unlike any other. Like any great open-world game, Test Drive Unlimited let you choose what you did – you could race through the streets, or cruise through the island, taking in the sights, or even launch yourself off a hill.

Soon after, the makers of the Burnout racing series released the free-roam Burnout Paradise (2008), which would go on to rank as one of the most influential open-world games and will be discussed below. Games such as these would lead to titles like Forza Horizon (2012), The Crew (2014), and multiple open-world Need for Speed releases.

In the second half of 2000s, Ubisoft would launch the highly-successful Assassin’s Creed franchise, which would place players in historical open world settings. The first title in the series takes place in 12th-century Jerusalem, while Assassin’s Creed II (2009) and Assassin’s Creed: Brotherhood (2010) are set in Renaissance Italy. As the franchise’s in-house historian Maxime Durand says, “History is our playground,” and the AC series is renowned for its attention to detail in fleshing out historical settings and has even created game modes that can be used in class-room settings.

Red Dead Redemption (2010), Rockstar’s gritty, realistic western game, would mark the end of a decade that saw the rise of modern open-world gaming. The game is hailed as one of the best westerns ever made, thanks to its powerful quest-lines, strongly-written characters and its elegiac portrayal of the dying West.

The Golden Age

The golden age of open-world gaming can be said to have begun with the release of Skyrim and Minecraft in November 2011. Skyrim shipped 7 million copies within the first week of its release and has gone on to sell 30 million copies, making it the second-best selling RPG of all time, while Minecraft has gone to greater heights, becoming one of the best selling games of all time. Both games would appeal to demographics beyond core gamers.

Bethesda created one of its most fully-realised worlds with Skyrim, offering tons of activities and explorable locations in an epic, hand-crafted fantasy world inspired by Norse mythology. Minecraft, on the other hand, was an immense procedurally generated voxel-based sandbox world where you could give free rein to your creativity. Both games inspired game makers to take open-world gaming to new heights.

The next few years would see a host of marvellous open-world games, including Grand Theft Auto V (2013), Middle-Earth: Shadow of Mordor (2014), The Witcher 3: The Wild Hunt (2015), The Legend of Zelda: Breath of the Wild (2017), Red Dead Redemption 2 (2018) and many more, such as Fallout 4 (2016) and Kingdom Come: Deliverance (2018).

These games pushed the boundaries of the open world even further – they offered myriad ways to travel within the game world, featured superbly-written questlines, and had beautiful locations that made exploration worth it. Many of these games introduced mechanics that would enrich gameplay, such as Shadow of Mordor’s Nemesis system, wherein enemy orcs rise and fall in the hierarchy based on their combat experience with the player character. Horizon Zero Dawn created an open-world quite unlike any other, setting the game in a post-apocalyptic earth teeming with animal automatons.

The Assassin’s Creed series also expanded the breadth and depth of their open world with titles such as Origins (2017), set in ancient Egypt, Odyssey (2018), set in ancient Greece and Valhalla (2020), set in the Viking age. Like previous games in the franchise, these games rendered historic settings in minute detail, but they also featured a slew of side quests in sprawling game worlds that could be traversed on both land and sea.

Death Stranding (2019) turned traversal into the main challenge in the game and the beautiful Samurai epic, Ghost of Tsushima (2020), marked the end of a decade that saw some of the greatest open-world games ever made.

Open-world titles are still prominent today, as indicated by games like Horizon Forbidden West (2022) and Elden Ring (2022). Halo Infinite (2021) is the first Halo game to incorporate open-world elements into its design, and Elden Ring is the first Souls-like game to go open-world. Upcoming games such as Hogwarts: Legacy (2022), Forspoken (2023), and Starfield (2023) – Bethesda’s first new IP in 25 years – indicate that the genre is far from fading into irrelevance.

In the next section, we will delve into some of the best and most influential open-world games, and how they pushed the genre to new heights.

Seminal Open-World Games

The best open-world games rank among the greatest games ever made, and in this section, we take a closer look at some games that have delivered unique open-world experiences, enabling gamers to create their own journey through vast worlds that seem to have a life of their own, with a host of NPCs, missions, side-quests and locations offering endless possibilities.

The table below contains Metacritic’s top twenty open-world games, in chronological order, culled from a list of its best-rated games of all time. We will discuss some of these games in greater detail based upon the impact they had – and as many of these games are part of larger series, we choose one game from the franchise that has most influenced the game industry or open-world gaming. As a result, Skyrim is chosen over Morrowind or Oblivion, and GTA III is chosen over GTA IV or V – all of these titles rank among the best games ever, but Skyrim and GTA III have had the most impact – the former brought Bethesda’s open world to a far wider audience, while the latter helped pave the way for the 3D open world as we know it today. Minecraft – the lowest rated among the top 20 – is also discussed at length because of how it utterly changed what you could create in an open game world. We also discuss The Witcher 3: The Wild Hunt, which has the same rating as Minecraft, for its brilliant story-telling and quest design.

The Legend of Zelda: Ocarina of Time (1998, 99/100)

This game was the first Zelda title to feature 3D graphics – players could explore Hyrule and its various locations and peoples on their quest to defeat the evil king Ganondorf. Distant landmarks on the horizon could actually be visited and secret locations could be broken into by destroying walls at certain weak points, and the novel ‘Z targeting’ system allowed Link, the protagonist, to lock onto enemies or in-game objects. A single button performed various context-sensitive actions – Link would mount his horse with the button if Epona was nearby and throw a bomb if he had one in his hands. Optional side quests yield loot that Link can trade with various NPC and the game world had a life of its own.

Grand Theft Auto III (2001, 97/100)

Along with Zelda: Ocarina of Time, Grand Theft Auto III paved the way for the modern 3D open-world genre as we know it today. Unlike the Zelda title, GTA III was set in a realistic game world – the fictional Liberty City, which draws inspiration from New York. Players could explore the game world freely in between missions, and could tackle side-quests in any order, while progressing through the main mission. Driving around the streets of Liberty City gave an unprecedented sense of freedom, especially since you could drive off-road and launch yourself off ramps in the game world. Rockstar also raised the bar for voice acting by casting recognizable Hollywood names for major NPCs. GTA III was all about creating a virtual world that players wanted to return to again and again, and spawned numerous imitators, such as Mafia (2002), True Crime: Streets of LA (2003), The Getaway (2002) and the Saints Row franchise.

Burnout Paradise (2008, 88/100)

Strictly speaking, Burnout Paradise is a racing game set in the fictional open world of Paradise City. But it’s so much more. It actively encouraged players to drive dangerously fast, destroy billboards and other city structures, hurtle down the wrong side of a flyover, launch oneself off ramps, and cause all sorts of mayhem and finally crash in spectacular fashion. Even Metacritic makes note of this – ‘Burnout Paradise proves that crashing is awesome!’

The game also offered races, time trials, stunt runs and other activities at every intersection, but many gamers ignored these missions, choosing instead to explore the city or use the game’s social features, and attempt increasingly absurd driving stunts. Player freedom and exploration – two of the defining characteristics of an open-world game, are central to the gameplay in Burnout Paradise.

The Elder Scrolls V: Skyrim (2011, 96/100)

You are the hero, you make the story. Your quests take you through other points of interest, which lead to more quests, which in turn lead to other points of interest and so on. Player freedom is nearly sacrosanct in Skyrim: you can postpone the main quest indefinitely, explore Skyrim entirely on your own terms and the smallest details, like a book, could lead to a compelling new quest. Skyrim also allows you to customise your character’s looks, choose your race, and upgrade your skills and gear as you progress through the game world. To be sure, Morrowind and Oblivion had already pioneered such gameplay elements, but Skyrim implemented them on a far grander scale and brought the series’ open-world RPG mechanics to a far wider audience. As one critic puts it, many open-world games such as Kingdom Come: Deliverance, Dragon’s Dogma: Dark Arisen, The Witcher 3 and even The Legend of Zelda: Breath of the Wild would draw inspiration from Skyrim, marking its resounding effect within the industry.

Minecraft (2011, 93/100)

Minecraft is a massive procedurally generated open-world sandbox where the player can unleash his creativity in ways that are quite impossible in other games. Players can build just about anything, from a log-house to a computer, in this voxel-based world that comes with its own unique biomes. Players have built monumental structures in the game world, including giant golden bricks, replicas of real-life buildings, working calculators and computers, and much more. Minecraft became a word-of-mouth sensation soon after release and went on to become one of the best-selling games of all time. Minecraft not only fosters exploration, but it also allows you to remake the world however you see fit: players mine for materials by hacking away parts of the game world and resources harvested this way can be used to create structures of stunning complexity, making Minecraft the ultimate sandbox open-world game.

The Witcher 3: The Wild Hunt (2015, 93/100)

The Witcher 3: The Wild Hunt (2015) is an open-world game that stands out for its depth and breadth – it focuses on brilliantly-written quests and a fully-realised player character, and does away with trivial side missions to make most quests weird and interesting. Witcher’s narrative quests are some of the most compelling in gaming, and exploring the world is hence a thrilling experience, because of the sheer variety and depth in each quest you will uncover.

The Witcher 3 is one of the few games that does not trade in narrative complexity for the freedom and non-linearity of the open world. As one of the lead developers said, “[Our] goal … was to not compromise on the quality of our quests and stories by having them take place in an open world.” Quests fit organically in the game world, allowing players to stumble upon them naturally. Many of these missions are interlinked, so even tackling them in non-linear fashion can allow players to experience all the connected activities, which together tell a cohesive story.

The game is also gorgeous, inviting the player to explore its huge map, and with its attention to detail, brilliant quests and story-telling, The Witcher 3 is one of the greatest open-world games to date.

The Legend of Zelda: Breath of the Wild (2017, 97/100)

The Legend of Zelda: Breath of the Wild (BOTW) represents open-world design at its finest. Almost everything in this game is optional. In fact, nothing stops you from challenging Ganon by going to Hyrule Castle the moment the game starts – you might lose initially as you are not yet acquainted with how the game works, but may well succeed after a few attempts. The game does not compel you to discover all of its treasures, and you can explore the lovingly-crafted game world at your own pace. The game achieves true non-linearity by not forcing any narrative or questline upon exploration, and its open world is fully traversable – you can climb up almost any surface, bridge a valley with a felled tree, fly through the air with a paraglider and even drive a fantasy motorcycle through Hyrule. Traversing the world can be challenging as well, requiring you to wear warm clothing in cold weather and sheathe metal weapons while in the open during a thunderstorm (to prevent being struck by lightning). But such survival elements are implemented with a light touch, and never result in repetitive chores.

In many ways, this game is the culmination of all the open-world Zelda titles that led up to it – Breath of the Wild is the best-selling Zelda game of all time and is a huge system seller for the Nintendo Switch as well.

Red Dead Redemption 2 (2018, 97/100)

Red Dead Redemption 2 (RDR 2), the second instalment in the Red Dead series, is a prequel to the original and one of the most cinematic open-world games ever made. Thanks to its exceptional quality of writing, Arthur Morgan emerges as a fully realised character and one of the greatest protagonists to date in Rockstar’s history, and even side characters have compelling story arcs that make you care for them. The game has a bewildering number of easter eggs, including a UFO and a vampire, and players continue to explore the massive game world to this date for its hidden treasures.

Rockstar also limited player freedom in meaningful ways in RDR 2, by requiring the player to rest, eat, wear protective clothing and even take care of his horse, and by introducing serious consequences to breaking the law – being a criminal results in a bounty on your head that seriously restricts freedom of movement, and thereby limits your ability to gather resources, find new missions or explore the game world. In Red Dead Redemption 2, Rockstar subverts the lawless freedom of the GTA series to create a more immersive, realistic narrative that portrays the hard life in the American west.

Red Dead Redemption 2 is among the top ten best-selling games of all time, and thanks to its powerful story, graphics, gameplay and open world, it is considered one of the greatest games ever made.

Conclusion

When looking at the industry’s seminal open-world titles, one is struck by the variety in these games’ design. All feature open worlds, non-linearity, traversal, adventure, discovery and exploration, but they differ radically in how they create their worlds. Player freedom is central to Skyrim, but it is curtailed in Red Dead Redemption 2. GTA III lets you live the life of a gangster, but in BOTW and Skyrim, you are the world’s saviour (of course, in Skyrim you can also be a vampire or a thief or an assassin, or a werewolf or all four at once, but you are still the only one who can rid the world of the world eating dragon Alduin). RDR 2 is a tragic western while Minecraft has no story, focusing instead on letting the player create anything in the game world. All these games have pushed the boundaries of open world gaming, but have also pulled it in different directions.

It is more than likely that ambitious game developers will continue to make and remake the open world, inspired by seminal titles and their own vision. Elden Ring for example, eschews map markers and lets you discover the world without much guidance – it is the first Souls-like game to go open world and retains the difficulty of the Souls genre. In the coming years, we can expect more iterations on what is now a staple of the industry – the open world game is not just a treasure trove for gamers, but a well of inspiration for developers as well.

In a subsequent blog, we will discuss the evolution of open-world games – how developers built on the efforts of pioneers to create open worlds of increasing complexity, depth and scope.

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30 JuneCloud GamingConsolesPlatform Exclusive Video Games

The Decline of Platform Exclusivity

by Karthik Balasubramanian0 Comments

The year was 1991 and Sony had just suffered a public humiliation at the hands of Nintendo. On May 28, Sony had announced that it was working with the gaming company to build a new console with a CD drive. Nervous about Sony’s intentions regarding the gaming market, Nintendo publicly rebuffed the company a day later, declaring that it would be partnering with Phillips instead.

Nintendo had inadvertently helped create a juggernaut that would crush its competitors until Microsoft joined the fray. In the ’90s, the console wars had all been about Sega and Nintendo, but with its first PlayStation console (1994), Sony outsold the Nintendo 64 by a huge margin, and with the PS2, it finished off Sega as a console player. Microsoft realised that a new entrant could disrupt the market, and released its Xbox to compete with the PS2 – and this is why we talk about Sony vs Microsoft today, rather than Nintendo vs Sega. Nintendo still thrives in the console market, largely by not competing directly with Microsoft or Sony, and appealing to a wider, casual demographic.

In this article we will discuss how platform exclusives – games released solely for one platform – have been the deciding factor in every iteration of the console war until the ninth generation of consoles. We will also delve into the reasons why companies are now moving away from platform exclusivity toward an inclusive approach that involves PC ports, multi-platform game subscription libraries and cloud gaming solutions.

What are Exclusive Games and non-Exclusive Games?

An exclusive is simply a game that can be played on only one platform – no exceptions. Such games are locked down to a single platform, such as the Xbox or the PlayStation, or even the PC. Halo 5: Guardians (2015) – the best selling first-party Xbox One game, can only be played on that console or the Xbox Series X|S, Shadow of The Colossus (2005) can be played on the PS2, the 2011 remaster can be played on the PS3, and the 2018 remake can be played on both the PS4 and PS5 – in effect, the title is restricted to the PlayStation console platform. Dota 2 (2013) and League of Legends (2009) – both major esports – are exclusive to PC.

A timed exclusive is an exclusive that can be released for different console platforms and/or PC after a specific timeframe lapses. Timed exclusives such as GTA III (2001) and GTA: Vice City (2002) are among the best selling PS2 games of all time. Mass Effect (2007) was a timed exclusive for the Xbox 360, before being ported to PC in 2008, and to the PS3 in 2012, and Mass Effect 2 (2010) was a timed exclusive for the Xbox 360 that was ported to the PS3 in early 2011. Both the first and second part of Mass Effect are among the best-selling Xbox 360 games.

Both exclusives and timed exclusives can be called ‘platform exclusives’ – they are released for only a specific video game console or to one company’s console platform, and not available on any other platform, either permanently, or for a set duration.

A console exclusive is available and playable on one console platform, but not on the other, while being available on PC or another non-console platform. Halo Infinite (2021) can be played on both the Xbox Series X|S and Xbox One, but it can’t be played on any PlayStation console, and Horizon Zero Dawn (2017) can be played both on the PS4 and PS5, but it can’t be played on any Xbox console. While both Halo Infinite and Horizon Zero Dawn are available on PC, a gaming desktop would be required for the best experience. Like platform exclusives, ‘console exclusives’ are meant to sway potential buyers toward their respective platforms – Halo fans will opt for the latest Xbox consoles while fans of Sony exclusives would choose the latest PlayStation console.

Many prominent games such as The Elder Scrolls: Skyrim (2011), The Witcher 3 (2015), GTA V (2013) and Elden Ring (2022) are non-exclusive – they offer vast worlds, great stories, engaging quests and more, and none of them are locked behind a single platform. All these games are available on PC, Xbox and Playstation and thus maximise the potential audience they can garner.

In the next section, we will deal with how platform exclusives determined the victor in several iterations of the console wars, until Microsoft adopted a multi-platform ecosystem policy mid-way into the eighth generation of consoles, signalling a shift away from platform exclusivity.

The Prominence and Decline of Exclusives in the Console Wars

Most video game consoles are sold at a loss for the first few years – the strategy being to gain consumers for the console’s library of games – eventually, console sales, along with sales of games available on it, may more than make up for the cost incurred in developing the console.

For multiple generations, the success of a console was largely dependent on its exclusive library – it was the deciding factor for someone looking to buy a console. Sega pulled in gamers with exclusives like Sonic, Nintendo did the same with Mario and Zelda, and Sony and Microsoft would continue this trend with a plethora of exclusives Hence, any history of platform exclusives is inextricably linked with the console wars – in the sections below, we discuss such exclusives in the larger context of competing console makers.

Gen 1-3: Atari, Sega and Nintendo Come to the Fore

The first generation home consoles often supported only one game, usually a variation of Pong, such as Pong Doubles, Quadrapong, and Breakout. The success of consoles like Magnavox Odyssey and Atari’s Home Pong series resulted in hundreds of inferior console clones hitting the market, eventually precipitating a market crash in 1977. In the same year, Nintendo would release several dedicated home consoles – the Color TV-Game series – that would support multiple games. The first console had six ball-and-paddle games. A later console would feature a racing game and the last would contain a port of Nintendo’s arcade game Computer Othello. With a bigger library, Nintendo’s Color TV-game series outsold all others, at 1,500,000 units.

Home consoles of the second generation used game cartridges, which spurred the development of multiple games for each console. Space Invaders (1980) became the killer app for the Atari 2600 (1977), quadrupling sales of the console. The ColecoVision (1982) also boasted the successful Donkey Kong, which it licensed from Nintendo. The Atari had an extensive game library and dominated sales with 30 million units sold, while Mattel’s Intellivision sold 3,000,000 units and ColecoVision, 2,000,000 units. The second generation would also end in a market crash in North America, due to market saturation and poor game quality (apart from a few exceptions)

Nintendo’s revolutionary NES (Nintendo Entertainment System, 1983) would dominate third-gen consoles and revitalise the industry, selling more than 60 million units on the back of a top-notch gaming library that used the computational power of 8-bit processors. Titles like Super Mario Bros (1985), Mega Man 2 (1988), and The Legend of Zelda (1986) set the standard for the third generation and Zelda was a runaway bestseller, selling over 6 million copies – both Zelda and Mario were system sellers as well. Phantasy Star and Alex Kidd in Miracle World were landmark titles for the Sega Master System, though neither Sega nor Atari could compete with the NES – The Atari 7800 sold less than 4 million units, (helped in part by licensed conversions of Nintendo games) and the Sega Master System sold 13 million units.

Fourth Gen: Sonic vs Mario

By the fourth generation, Atari had exited the market due to the 1983 crash and the prominence of Nintendo and Sega, who would become the primary combatants in the ensuing console war. For the Genesis (1988), Sega came up with the infamous marketing slogan, Sega does what Nintendon’t, indicating it would compete directly with Nintendo, especially with Sonic the Hedgehog (1991), a title that would give Mario a run for his money. Other Sega Genesis games include Streets of Rage 2 (1993), Phantasy Star IV (1994) and Castlevania: Bloodlines (1994)

Nintendo responded with the Super NES (1990), releasing more industry-standard games such as Chrono Trigger (1995), Super Metroid (1994), Street Fighter II (1992) and The Legend Of Zelda: A Link To The Past (1991), which is considered one of the greatest games of all time.

However, Sega held its own: Sonic the Hedgehog became the best-selling game of 1991, selling 2 million copies worldwide. Sega did not win the war – it sold over 30 million Genesis units while the SNES sold over 49 million units, but it had proved that it could go up against the industry giant.

Fifth Gen: Sony Rises to the Top with Game-Changing Exclusives

Until the fifth generation, the major players in the console wars had been Atari (until the fourth generation), and Sega and Nintendo. That would change with the advent of Sony’s Playstation.

The original PlayStation home console changed the game, quite literally, with Final Fantasy VII (1997). FF publisher Square Enix had developed games exclusively for Nintendo until Sony convinced the company that its ambitions for FF VII would only be realised with the PlayStation, which used CDs rather than cartridges, and supported the latest 3D graphics. Square took full advantage of the PlayStation’s capabilities – introducing full-motion video cinematic cutscenes that would become a major selling point for the game.

Like FF VII, other Sony exclusives such as the original Tekken (1994), Resident Evil (1996), Crash Bandicoot (1996) and Metal Gear Solid (1998), capitalised on the new console’s technological capabilities. Sony became the platform of choice for third-party studios such as Capcom, Konami, Electronic Arts and Namco, which it had eagerly courted from the outset. From 1996 to 2000, the Crash Bandicoot games were exclusive to the PlayStation consoles, Titles in the Metal Gear Solid series also began life as PS exclusives before being ported, and they rank as some of the best games of all time.

Both Sega’s Saturn and the Nintendo 64 failed against a better-designed console with a host of third-party exclusives that set a new standard for gaming. Sony sold 102 million PlayStation units, Sega sold a mere 9.24 million Saturn units, and Nintendo sold 32.93 million N64 units. With its first gaming console, Sony had become the market leader.

Sixth Gen: Sony Exclusives Redefine Gaming, Halo powers the Xbox

Sony’s PlayStation 2 (2000) also boasted a strong library of games. With titles such as Shadow of the Colossus, Ico (2001), Okami (2006), Gran Turismo 3: A-Spec (2001), Final Fantasy X (2001), God of War (2005), God of War 2 (2007), GTA III and GTA: Vice City, Sony continued to redefine what people could expect from a gaming experience.

While both GTA III and GTA: Vice City have since been ported to other platforms, Sony entered into timed exclusivity agreements with the publisher, allowing it to gain a ‘stranglehold on the competition’. Sony’s exclusives helped make the PS2 the best-selling home gaming console of all time.

Microsoft’s first console – the Xbox (released 2001-02) , was going up against an industry titan with few competitors. But the Xbox had a killer app – Halo. The original XBox could not match the PS2’s success – Microsoft sold 24 million units as opposed to 158 million PS2 units – but Halo: Combat Evolved (2001) was the beginning of one of the biggest franchises in gaming, and proved that Microsoft could be a contender in the console market. Microsoft has sold 6.43 million copies of Halo: Combat Evolved, and the Halo franchise has sold 81 million copies worldwide – it is still one of the biggest reasons to buy an Xbox console.

The Dreamcast (1998) preceded both the PS2 and the Xbox, but failed against the PS2 because of a lack of third-party content and Sega ended production before it even had a chance to compete with Microsoft’s console. Sega ceased to be a player in the market – the Dreamcast was its last console.

Seventh Gen: Wii Wins by Appealing to a Wider Audience

Microsoft closed the console sales gap in the next generation – the Xbox 360 eventually sold 84 million units while the PS 3 sold 87.4 million units. The Xbox 360 (2005) had a strong exclusive line up, including Halo 3 (2007), which doubled sales of the console, and other hits such as Gears of War 2 (2008) and 3 (2011), Forza Motorsport 4 (2011) and Forza Horizon (2012).

The release of Metal Gear Solid 4 in 2008 boosted sales of the PS3, but as the final tally indicates, the seventh generation was a closely fought race for Microsoft and Sony – many developers found it hard to develop for the unique architecture of the PS3, leading to an underwhelming exclusive line up that gave the Xbox 360 an advantage.

The PS3 eventually caught up with ambitious exclusives such as the Last of Us (2013), God of War: Ascension (2013), Heavy Rain (2010) and Gran Turismo 5 (2010), but the generation was characterised by franchises such as Grand Theft Auto, Bioshock, Assassin’s Creed, Elder Scrolls, Tomb Raider and Final Fantasy, whose third-party publishers released their biggest games on both consoles to reach a wider audience.

The real winner of the seventh generation console war, however, was the Nintendo Wii (2006), whose Wii Remote could be used for both traditional input and motion sensing. Wii Sports (2006), a game bundle that recreated popular sports at home using the Wii’s motion detection, became the best-selling Nintendo game ever, and helped the Wii become the best-selling console of the seventh generation, at 102 million units. With its lineup of family-friendly exclusives such as Mario Kart Wii (2008), New Super Mario Bros Wii (2009) and Wii Play (2006), the Wii won by attracting a much wider, casual audience, which neither the PS3 nor the Xbox 360 targeted.

Since the Wii, Nintendo isn’t participating in a war so much as playing its own game: the Switch (2017) is yet another innovative console – a hybrid hand-held and home gaming platform. It has sold 103 million units as of February 2022, and its exclusives appeal to both core gamers and casual players. Many of its game franchises, such as Mario, Zelda and Pokemon, are huge system sellers and The Legend of Zelda: Breath of the Wild (2017) has powered Switch sales.

Eighth Gen: Sony Wins by Sticking to an Exclusive Strategy

The scales swung back toward Sony in the next generation of consoles – both the Xbox One and the PS4 were launched in late 2013, and Sony’s console would outsell the Xbox One by a huge margin, primarily by adding steadily to its library of top-notch AAA titles. Despite an underwhelming exclusive lineup at launch, the PS4 would go on to become the second-best selling home console of all time after the PS2.

After a shaky start, Sony released a string of hit exclusives – Bloodborne (2015), Uncharted 4: A Thief’s End (2016), Horizon Zero Dawn (2017), God of War (2018), Marvel’s Spider-Man (2018), and Ghost of Tsushima (2020) – all of which were integral to PS4 sales.

Microsoft, on the other hand, was impaired by an identity crisis, as a ScreenRant article puts it. The tech giant pushed extras like the Kinect, which few cared for, and announced a controversial digital rights management (DRM) policy that required gamers to connect to the internet to play offline games, and also limited sharing physical copies with others. Widespread backlash forced them to abandon their DRM measures.

Sony, meanwhile, offered a cheaper system that was more powerful, and also came with a solid library. Having only a few heavy hitters like Forza Horizon 2 (2014) and Halo 5: Guardians (not yet ported to PC), the Xbox One only managed 51 million units, less than half of PS4’s 117 million units. The Xbox One lost to the PS4 not only because it lacked a good roster of exclusives, but also because it tried to build an ecosystem hostile to gamers.

Microsoft Begins the Move Away from Platform Exclusives

When Microsoft launched its Xbox Play Anywhere program in 2016, it got DRM just right – it allowed users to buy a game once and play it ‘anywhere’ (meaning on both PCs and Xbox consoles, but not PS consoles). It also enabled gamers to carry over their saved games, addons and expansions with them when they resumed playing on a different platform.

The Play Anywhere service was enabled for a slew of games, including Gears of War 4 (2016), Forza Horizon 3 (2016) and ReCore (2016), and the program signalled a major shift from exclusivity to an ecosystem for both Xbox and PC players, even in the face of repeated criticism regarding the Xbox One’s lack of exclusives. The roster of Play Anywhere games has since grown steadily.

After the Play Anywhere Program, Microsoft launched the successful Game Pass game subscription service for Xbox in 2017 and PC in 2019, and added Xbox Cloud Gaming to the Game Pass later that year. Microsoft’s cloud gaming solution would lead to speculation that consoles would soon become unnecessary.

Sony, on the other hand, would take a few years to realise that its time-honoured exclusive-first strategy for its consoles restricted it from reaching the wider audience that Microsoft had attracted with its content services.

Why are More Games Non-Exclusive Today?

In this section we will look at the various factors that have contributed to the decline of platform exclusives – changing industry attitudes, the release of prominent platform exclusives on PC, and the advent of cloud gaming.

Changing Industry Attitudes

In a June 2020 interview with BBC Click, Xbox head Phil Spencer said: ‘Our strategy does not revolve around how many Xboxes I sell this year.’ He added that Microsoft was focused on delivering services through the Xbox Game Pass.

Months before the launch of the Xbox Series X|S consoles, Xbox head Phil Spencer also insisted that the Xbox brand was not built around exclusives. In a July 2020 interview with gamesindustry.biz, the game industry veteran said that the idea of locking people away from being able to experience games was completely counter to what gaming meant to him.

He also characterised the Series X|S consoles as an upgrade rather than a complete departure from previous consoles, and promised backwards compatibility for thousands of games. Later that year, he announced that Microsoft would release all next gen titles for both Xbox and PC, with first-party titles arriving on the Game Pass subscription.

Spencer – and Microsoft – could make such claims on the strength of the Xbox Game Pass. By 2020, many outlets were calling it a success, and even the Guardian took note when the service hit 10 million subscribers during the lockdown. With 25 million subscribers as of 2022, the Game Pass subscription service has helped Microsoft reach a far wider audience – especially as the Xbox cloud gaming solution is available on multiple platforms, including PC, console and mobile devices. The subscription service also accounts for a significant portion of Microsoft’s gaming revenue. A PC gamer article provides an apt summary of Microsoft’s core business strategy: selling game content through subscriptions or direct purchases. The device on which you play does not matter – in fact, Microsoft can shun the platform exclusive, and disregard console sales, simply because it can afford to.

The PS5 and the Xbox Series X|S were released at roughly the same time in late 2020. Sony stuck with its policy of lining up a compelling set of exclusives, which led analysts to predict that the next-gen Xbox consoles would suffer poor sales because of Sony’s superior library.

Despite the PS5 boasting a strong library at launch, the Xbox Series S actually outsold the Sony console in the 2021 November holiday season – the pandemic-period chip shortage and other factors had led to low PS5 stock, which led in turn to poor sales.

November is a critical month for the game industry: sales spike as Americans buy up game consoles and games to give as gifts. The Xbox Series S was readily available and also benefited from its low cost and the release of the much-anticipated Halo Infinite and Forza Horizon 5 (2021). Forza Horizon 5 broke Xbox records, passing 10 million players within its first week.

An exclusive strategy built around a console requires the console to be readily available, and the PS5 shortage may have impelled Sony toward a dramatic change in policy. In May 2022, SIE president Jim Ryan stated that the company’s focus on building a strong portfolio of narrative-rich, graphically beautiful single-player games, had restricted it to a ‘rather narrow portion of the gaming market’.

By expanding to PC and mobile and offering live services, Sony could move from a single part of the market to ‘being present pretty much everywhere’. In a mid-term strategy meeting, Sony released a presentation detailing its move away from a ‘walled garden’ approach to releasing content on more platforms and mediums. Sony now wants around half of its games to be available on PC and mobile by 2025.

For Microsoft, platform exclusives are no longer part of its business strategy, which now involves multi-platform subscriptions and streaming services. For Sony, moving into multiple platforms gives it the chance to be present in all gaming segments. In the next section, we will discuss how both industry giants have approached the PC ecosystem.

Microsoft and Sony Double Down on PC gaming

Microsoft has led the charge in making all its games available on PC – the tech giant’s next-gen games will be available not only on the Microsoft Store, but Steam as well. Microsoft has also added to its game library by acquiring companies such as Activision Blizzard and Bethesda, both of which have released prominent games on PC and other platforms. With the Game Pass’ cloud solution, such games are available to stream as well, on multiple devices (except PlayStation consoles).

Microsoft is also enticing publishers into the Windows Store ecosystem – in 2021, the tech giant reduced its revenue cut from Store games to 12% from 30%, encouraging more developers to create games for the digital storefront, which is of course, available on Xbox consoles as well.

Sony is also catching up, releasing some of its exclusives on PC. In fact, releasing PC ports is seen as one of Sony’s strategies to reach a wider audience and give gamers a taste of the quality they can expect from a PS5 console. In August 2020, Sony released a PC port of the much-lauded Horizon Zero Dawn and ported Days Gone (2019) in 2021. It then made a stunning announcement later that year: 2018’s God of War, one of Sony’s greatest exclusives, would be available on PC by 2022.

Sony now plans to release four more games on PC this year – Uncharted 4: A Thief’s End and Uncharted: The Lost Legacy will be bundled as the Legacy of Thieves Collection, though no release date has been confirmed yet, while Marvel’s Spider Man Remastered (2020) will be available on August 12, and Marvel’s Spider-Man: Miles Morales (2020) during fall 2022. Sony’s announcements have led multiple media outlets to declare that exclusivity and the console wars are over for good.

Sony is committed to its PC gambit – in 2021, it launched the Playstation PC label on Steam and a year later, it acquired the porting specialist Nixxes Software, and later confirmed that it would collaborate with Nixxes to bring more PS4 and PS5 titles to PC. In April 2022, Sony put out a job listing for ‘senior director of PC planning and strategy at PlayStation Global’, and a month later, the company forecast that its PC game sales would jump a whopping 275% to $300 million by the end of the next fiscal year.

It is apparent, however, that Sony is making PC ports of its platform exclusives a while after their release on PlayStation consoles, enabling the company to walk a fine line between drawing people toward its consoles, and reaching a wider audience with ports.

The Advent of Cloud Gaming

Cloud gaming services could actually bring exclusives back into play, if they follow a model similar to media streaming services such as Netflix, Prime Video and Disney+. ‘Exclusive’ media franchises such as Stranger Things on Netflix, and the Star Wars and Marvel franchises on Disney+ impel consumers to pay monthly subscriptions for multiple streaming services.

Enabling gamers to play on any device with a strong network connection is a key value proposition for any cloud gaming service. Xbox’s cloud gaming solution (part of the highest Game Pass tier) is available on Android, Windows, iOS, iPadOS, Xbox One, Xbox Series X|S, and Steam Deck.

With its robust library, Sony’s PlayStation Plus service is characterised as “the Game Pass alternative that many people believed Sony would never offer”, and as the highest tiers of both the Game Pass and PS Plus feature cloud gaming, gamesindustry.biz argues that a new war, now between competing streaming services, is about to begin. The Playstation Plus Cloud Streaming Service is available on PC – as such, no streaming exclusive can be considered a platform exclusive.

However, cloud gaming services are still in the nascent stage and 5G networks – integral to the game streaming experience on mobile platforms – are far from ubiquitous and the ‘deprioritization’ of Google Stadia has raised concerns about the viability of cloud gaming.

Conclusion: Is Platform Exclusivity Dying?

During the console wars, platform exclusives, timed or otherwise, played a big role in determining the success of a console. Current trends suggest that the once-mighty platform exclusive may be past its heyday.

Microsoft appears to have decisively moved away from platform exclusives, especially with the Game Pass, its multi-platform Store, and its cloud gaming solution. But even Microsoft wants to keep some high-profile titles as console exclusives – Xbox chief Phil Spencer has all but announced that The Elder Scrolls VI will be playable only on Xbox or PC and Starfield, Bethesda’s first new IP in 25 years, is exclusive to PC and Xbox. Responding to the ensuing backlash, Todd Howard, chief of Bethesda, insisted that exclusivity would lead to a better product.

Sony seems unwilling to fully relinquish platform exclusives. It has many platform exclusives scheduled for the PS5, and revealed in 2021 that the company had spent $329 mn on third-party exclusives for the console. But a year later, Sony announced that it would spend $300 mn to help first-party studios develop games and release them on multiple platforms, suggesting a shift toward inclusivity. Sony is committed to its PC strategy, but it wants to make a compelling case for the PS5 as well – by lining up third-party exclusives, and releasing first-party exclusives on PC a year or so after they are released on the PS5 – attracting buyers to their consoles and reaching a wider audience with their games.

The platform exclusive might be dying – only for the service exclusive to take its place. Both the Xbox Game Pass and the PlayStation Plus service feature exclusive content that cannot be accessed anywhere else. Such exclusives may not be locked to a single platform – Game Pass exclusives can be downloaded to both PC and Xbox, and its streaming solution brings these exclusives to just about any device except a PlayStation console. The PS Plus’ streaming solution works on the PC as well.

If subscriptions and game streaming solutions become prevalent, and turn into major sources of revenue, Microsoft and Sony may be at war yet again, on a new front, and may even face challengers offering innovative game content services. The decline of the platform exclusive may well usher in a new era of multi-platform gaming, but gamers would then have to decide between subscription services rather than consoles. Gameopedia’s data curation team amasses information about all sorts of gaming hardware, gaming services and games. Reach out to us to learn about our game data solutions and more.

30 MayTelecommunicationsVideo Games

Why Telecom Companies Should Look At Gaming As Their Next Big Frontier

by Kaavya Karthikeyan0 Comments

The video games industry generated almost $180 billion in 2020. In 2021, the video game market size in just the United States surpassed $85.86 billion. With such a massive market on the table, players from several different industries are looking to invest and diversify for a piece of the pie. Telecom companies are one of these players. The telecommunication sector is made up of companies that make communication possible on a global scale, whether it is via wires or wirelessly, or through the phone or the Internet. AT&T, Verizon, and T-Mobile are some examples of telecom companies.

Telecom companies are looking to diversify their offerings for a variety of reasons, the foremost of these being that their traditional revenue streams are falling behind and their markets are being saturated. This is a result of their core markets such as television, voice and messaging, and even music being undercut by services like Netflix and Spotify. While they’re losing out on revenue, they also have to keep improving their mobile data infrastructure thanks to the massive increase in mobile data consumption. To make things worse, churn rates (customers switching providers) are particularly high in the telecom sector, averaging between 10 and 67% annually. It is estimated that 75% of the 17 to 20 million subscribers signing up with a new wireless carrier every year are coming from another wireless provider.

It isn’t all bleak though. Telecom companies have a considerable advantage when it comes to today’s increasingly digital world. They have access to a huge customer base, an upper hand when it comes to infrastructure, and a good understanding of customer behavior and brand awareness. These advantages can be used while investing in new areas such as media, entertainment, and of course, gaming.

The Potential of the Gaming Market

As a result of the COVID-19 pandemic, gaming’s popularity has surged to new heights and telecom operators have already started investing in areas related to gaming on a huge scale. This shift in behavior appears to be well-established: gaming is much more than just a hobby, it provides entertainment and community for millions of people around the world. The gaming industry is estimated to be worth more than $270 billion dollars by the end of 2025. Lucrative areas like cloud gaming and gaming as a service (GaaS) both pivot upon 5G service providers being able to deliver low-latency and high bandwidth connections. In fact, for both mobile and other platforms, but especially the former, 5G is the next revolution whose infrastructure is in the hands of telecom companies. Cloud gaming can reduce the price entry barrier as customers don’t need expensive hardware. How they create value from it and monetise it successfully is their focus. Some of the roles telecom operators can play in the mobile gaming ecosystem include:

Infrastructure provider– Telecom operators can use their technological capabilities to assure the quality of service and monetise it. They can also use their infrastructure to improve mobile edge computing capabilities.
Ecosystem development partner– They can partner with gaming service providers and help develop new devices, content, and infrastructure and also educate customers on the value they’re building.
Sales partner- They can sell gaming as a service they offer, whether it’s their own games or third-party titles.

We’ll look at these in more detail later.

What Telecom Companies Gain by Entering the Gaming Market

As we have already seen, there are several value propositions for telecom operators looking to establish themselves in gaming and it’s important to note that while there might not be significant revenue increases in the short term, there will be several long-term benefits. Some of these are:

Brand positioning and popularity amidst younger audiences.
If you were to ask the younger generation about telecom operators, odds are they’ll dismiss them as phone service or broadband internet providers. These services are rather old-fashioned and might lead to these companies being seen as tiresome vendors selling uninspired, if necessary services. However, by associating with video games and the gaming industry and creating exciting value propositions such as low-latency connections, these companies might be viewed as game-changers. A great example of this is Verizon’s tie-up with Riot Games and its amazing promotional material. Verizon has partnered with Riot Games and invests heavily in the esports scene. The three-year partnership will allow Verizon to work with Riot Games to transform the gaming experience for developers, players, and fans alike.

Building increased customer loyalty.
Churn rates are particularly high in the telecommunications industry, averaging between 10 and 67% annually. If the newer generation is impressed by an operator’s venture into gaming and what they do in the space, then this may increase engagement and loyalty.
Higher average revenue per user (ARPU).
Let’s look at the previous example of Verizon, which partnered with Riot Games to be League of Legends’ LCS league’s Official 5G Wireless and Network Service Partner. The increased publicity and visibility for Verizon means it is likely that if their service is good enough, they’ll gain more customers. One more thing to note is that gamers tend to have higher data and internet usage and this can offset declining sources of income for telecom operators such as voice calling. Dedicated game-related products and services can also contribute to the ARPU.
Improved customer experiences.
An increased number of customers using gaming services can lead to operators having greater amounts of data related to their behavior. This will help them understand what customers appreciate and require and provide better customer services. For instance, Telkomsel partnered with those behind PUBG Mobile to activate special in-game offers for their customers. The success of this convinced them to launch their first mass online battle arena and first-person shooter game Shellfire, which was well-received by their audience.

How Telecom Companies can Enter the Game Industry

As a distributor: Telecom companies can acquire rights to exclusive releases and create packages specially for gamers with value add-ons like increased speed or bandwidth.
As developers: Telecom operators can participate in game development and offer localised servers, apart from doing everything distributors do. They can even own game development end-to-end, as Telkomsel did with Shellfire.
Involvement with game publishers and platforms: Telecom companies can collaborate with game developers and publishers which build gaming technology. A good example of this would be SK Telecom announcing an exclusive operating partnership with Microsoft’s cloud gaming service in Korea. Based on this relationship, SK Telecom is expected to help Microsoft strengthen its position in the mobile gaming market by leveraging its world-leading mobile infrastructure. US operator AT&T joined forces with NVIDIA to offer 5G GeForce NOW subscriptions, which it claimed offers “one of the world’s best gaming experiences.”
Investment in esports: Telecom companies can sponsor game tournaments to appear as an important part of the ecosystem and build goodwill and a following. A great example of this is Verizon x Riot Games where the former is the title sponsor for their game VALORANT’s ‘Game Changers’ series in North America.

SK Telecom and Microsoft's announcement of an exclusive operating partnership should boost cloud gaming in Korea.

Verizon is the title sponsor for Riot Games' VALORANT’s ‘Game Changers’ series in North America.

Key Avenues Telecom Operators Could Invest in

Telecom companies are already equipped to secure an immediate foothold in the video game industry by utilising their existing capabilities. We’ve looked at the benefits for telecom operators already, but which areas are advantageous for them to invest in? One is 5G, which is shaping up to be a game changer for connectivity thanks to its faster speeds and higher data bandwidth.

Cloud Gaming: Telecom companies should look into cloud gaming as a frontier to capitalise on the investments they’ve made in the 5G space. They have already invested in bringing about low latency for 5G networks. By offering dedicated 5G connections to gaming companies that then offer a low-latency experience to their end customers, telecom operators can transform gaming on the go while also expanding their customer list. Cloud gaming is expected to grow from 3 million active users in 2019 to 177 million active users by 2024 so this is definitely an area worth considering. They can also partner up with gaming companies that would like to leverage the telecom operator’s customer base.
Game Development and Publishing: Game developers and publishers can tie up with telecom companies with exclusive deals which both parties can benefit from. One of the best examples of this was Telkomsel and the people behind PUBG Mobile offering a data plan which was a great deal for the customer. Operators can also have their own app stores where exclusive games can be downloaded and played. Eventually, Telecom companies can even develop and publish their own games, such as Telkomsel’s release of Shellfire.
Games as a Service: By providing low-latency and high-bandwidth connections, whether 5G or wired, Gaming as a Service (GaaS) is much more viable, especially with cloud gaming getting a buff. This reduces the need for expensive hardware and increases accessibility as well — gamers can play anywhere, anytime as long as they have a laptop/tablet, and a good internet connection. Telecom operators can use their existing infrastructure to tie-up with both game publishers and developers. They can also, like mentioned previously, eventually develop their own games.
AR and VR: Mobile phones are perfect for the kind of interactions AR requires. This is a result of significant improvements in hardware over the last decade, higher camera quality, and improved internet access. Verizon, Deutsche Telekom, EE, Globe Telecom, Orange, SK Telecom, SoftBank Corp. and TELUS have joined Niantic’s Planet-Scale AR Alliance, which has a mission to create “amazing real-world AR experiences that demonstrate the possibilities of 5G.” For VR, the data requirement is also quite high and raises the question of whether networks are capable of providing the necessary connections. Telecom operators have the infrastructure ready for both 5G technology and high-speed internet. The networks that can handle the high-resolution images, videos, and data required by new games and apps will likely be the ones that get the most customer retention and loyalty.

Examples of Telecom Operators Successfully Entering the Gaming Space

Telkomsel:

Telkomsel is a leading Indonesian telecom operator that has managed to integrate gaming into its offerings quite successfully. It has achieved a 22% market share of Indonesia’s gaming industry. They did this with their multi-pronged approach, including dedicated offerings for gamers, partnerships with popular games, and investing in Indonesian esports.

Initially, it launched its Dunia Games web portal in 2013, where customers could download games and directly charge them to their phone bills. In 2017, in an initial developer play, Telkomsel partnered with the folks behind games such as PUBG Mobile to activate special in-game offers for customers subscribed to their dedicated online games data package.

It then switched to its own game releases with the successful launch of Shellfire, in 2018 — with plans to develop seven additional games. All this time, they were active on the complementary front of esports — they launched the Indonesia Games Championship eSports tournament as well as PUBG LAN events. They also boosted the Dunia portal with gaming articles, reviews, and trend reports.

Verizon

Verizon has been very active when it comes to creating excellent value for their 5G and AR offerings. It was one of the first global members of the Niantic Planet-Scale AR Alliance, which is creating 5G-ready AR services for consumers. It also has a partnership with Niantic, best known for developing AR-based game Pokémon GO, for exclusive collaboration on high-performing interactive experiences for gamers. It recently announced that it, along with Doug Liman’s 30 Ninjas and in association with France-based immersive studio Novelab, will collaborate on an Augmented Reality (AR) Adventure Thriller.

Verizon was also giving away 6 and 12-month subscriptions to Apple Arcade and Google Play Pass to add more bundled content offerings to their wireless subscriptions. In recent years, it has also partnered with Riot Games, Electronic Arts, Dignitas, and Team Liquid for the development of new services in the esports and the gaming space, utilising its 5G network and real-time Mobile Edge Compute (MEC) technology. Their partnership with Riot Games and investment in North America’s esports scene has helped build their reputation and credibility with game enthusiasts. Verizon’s status as the official 5G network for League of Legends‘ LCS, and as the title sponsors for VALORANT Game Changers NA has given it a certain cachet.

In addition to Verizon, Deutsche Telekom, EE, Globe Telecom, Orange, SK Telecom, SoftBank Corp. and TELUS have joined Niantic’s Planet-Scale AR Alliance, which has a mission to create “amazing real-world AR experiences that demonstrate the possibilities of 5G,” including ultra-reliable low latency, enhanced mobile broadband, network slicing, and edge computing. Several telecom operators have also made investments in cloud gaming, 5G infrastructure, and esports.

Esports as an industry especially has unique factors which make it extremely attractive to telecom companies. It needs high-definition broadcasting capabilities, high-speed and quality connectivity, low latency, and more. Telecom operators already have a leg up in that regard as they’re used to delivering such services and can use esports as a platform to announce their capabilities to a wider audience in the gaming industry. If someone’s favorite game or player is known to use a particular service provider, odds are they’ll see a spike in ARPU.

The Future of Gaming and Telecom Providers

We’ve looked at how and why telecom companies can benefit from investing in the gaming ecosystem. But what does the future look like for both these operators and the industry as a whole?

It seems likely that telecom companies will be able to add gaming to their service bundles and use third-party content to generate value. In fact, they can capitalise on existing problems such as those arising due to platform monopolies to create opportunities for both their customers and themselves. Lawsuits like the one where Epic sued Apple and Google for forcing it into a payment system where the app stores got a thirty percent cut of all individual transactions on the platform, such as skins, battle passes, and the like are a consequence of such monopolies. As a result, Apple removed the game from their store and gamers could no longer access it on their devices. Telecom companies could step in and provide access to these apps to their customers via their own app stores or cloud platforms. Game developers and platforms might be more open to using telecom operators for billing and aggregation.

There is also a rising interest in edge computing, especially for mobile devices. With the huge market for mobile gaming, telecom operators who can deliver on this front will likely profit significantly. They are also ideal providers considering their existing investments and infrastructure. Other opportunities in the gaming industry which we’ve looked at are AR, GaaS, and cloud gaming. We’ve already looked at several partnerships which are succeeding so far, but only time will tell the magnitude of this success. We’ve also examined how esports and telecom companies investing in the industry can benefit them through both increased revenue and reach. Apart from providing high-quality connections, they can also enable and promote esports tournaments, build online communities, and create esports content that can boost engagement. If done properly, telecom companies can create experiences that will win them loyal customers who also advocate for them and increase ARPU.

If you’re a telecom company looking to venture into gaming, we can help. Gameopedia works with clients across the gaming industry on custom requests and can provide in-depth game data across PC, consoles, and mobile games. Reach out to us for data that can empower you to new heights.

30 MayCloud GamingGaming TrendsMetaverseVideo Games

8 Major Gaming Trends to Look Out for in 2022

by Kaavya Karthikeyan0 Comments

Things have never looked better for the video game industry. It has grown exponentially over the last few years and the rate of growth doesn’t seem to be slowing down any time soon. It is estimated that over 2.5 billion people around the world play video games, and they contributed to the video game industry’s record-breaking 2021 revenue of $180 billion. The global gaming market is set to reach $256.97 billion by 2025.

There are several trends that have driven this explosive growth in revenue and audience: let’s look at those likely to be relevant in 2022.

Gaming Trends to Look Out For in 2022

1. The Massive Growth of Mobile Gaming

When it comes to gaming, a massive trend over the past decade that is only increasing in prominence is the rise of mobile gaming. The market for mobile games is expected to register a CAGR of 14% between 2020 and 2025. This is a result of improving technology when it comes to smartphone hardware and the growing penetration of these devices as a direct result of cheap internet data packs. Mobile games also often prefer the free-to-play (F2P) revenue model as it increases the number of downloads by users. This is because players can try out a game before deciding if it’s something they like and want to invest their time and money in. One of the things to note is the play-to-earn (P2E) business model which is slowly gaining popularity. Developed with blockchain technology (we’ll look at this in detail later), P2E games let players generate real income held in a crypto wallet, which means that even if they leave the game or it shuts down, they’ll be able to take these assets with them.

The sheer volume of gamers who play on smartphones and tablets makes it the biggest gaming platform. A survey in 2021 found that 68.1 percent of respondents stated that they played games via smartphone, making it the most popular gaming device worldwide. According to AppAnnie, consumers spent 50% more on mobile games than all other gaming platforms combined in 2021. Experts believe this trend will continue in 2022 as more games will support cross-play gaming. Asia-Pacific is emerging as the major contributor to the growth of the global mobile gaming industry.

AAA mobile game releases are also likely to increase. The recent success of miHoYo’s Genshin Impact as well as that of prior releases like Fortnite, PUBG Mobile, and Call of Duty Mobile have proven that AAA mobile gaming experiences are not only popular but also highly profitable. A month into Genshin Impact’s release, it was downloaded 15 million times and earned more than $150 million in revenue. The key to successful AAA mobile game releases are high-quality graphics and a game experience similar to what you’d get on a PC or console.

Finally, gamers are increasingly looking for mobile games that come with social features. In fact, according to App Annie, roughly two-thirds of the top 50 mobile games have at least one social feature. These include in-game chat, guilds and clans, co-op and PvP modes, social media connections, and more.

2. Cloud Gaming Becoming Viable

For many years, gamers have been waiting for innovations that would make cloud gaming go mainstream. It has the potential to revolutionise the gaming and entertainment industries by eliminating the need for expensive hardware and enabling remote access to game content. The prominent cloud gaming services in the current gaming ecosystem include PlayStation Now, Xbox Cloud Gaming, Amazon Luna, and Nvidia’s GeForce Now. Google has also committed to bringing at least 100 new games to their cloud service Stadia by the end of 2022. The future only seems brighter as cloud gaming is expected to expand at a compound annual growth rate (CAGR) of 48.2% from 2021 to 2027.

We’ve already looked at the advantages and the future of cloud gaming in detail in one of our previous articles. With cloud gaming, you don’t need to upgrade your PC or console. Instead of buying expensive gaming hardware, a basic laptop or even a mobile phone would do. You can play games on any OS or Device. Gaming on the cloud would allow games to become more platform-independent, allowing PCs and tablets running Mac, Linux, Android, and other operating systems to support games that might otherwise only run on Windows.

Other benefits include being able to start playing games instantly, as the server already has the game installed and can load the game immediately. This helps avoid waiting for patch updates. Cloud services would allow for very easy spectating of games, such as professional gaming matches. With the significant improvements in internet infrastructure, speeds, and bandwidth, streaming games might become prominent in 2022. The lack of a need to download periodic updates and possibilities of large-scale multiplayer gaming also improve its appeal.

3. Blockchain Gaming and NFTs

A blockchain is essentially a chain of data blocks on a computer network that is transparent to all of its users as well as anybody else. It cannot be altered or relocated. This way, a complete record of everything that has transpired on the network in relation to the data is preserved. Blockchain gaming is a means of turning digital assets inside video games (such as collectibles or cosmetic skins) into real-world assets in the form of NFTs or non-fungible tokens. Because of its liquidity and the fact that gamers are used to tokenization, implementing blockchain in gaming is fairly simple.

From a zero-value market size, the blockchain gaming industry grew to $3 billion in 2021 and is projected to rise to $39.7 billion by 2025. Fuelled by free-to-play and play-to-earn models, the blockchain gaming industry has attracted over 1.5 million diverse gamers across the globe. According to January’s report by popular data resource, DappRadar, blockchain-based online games received over $1 billion in funding in January alone, as compared to 2021 seeing investments worth $4 billion in total.

Cryptokitties is an online game that runs on the Ethereum blockchain. The game involves a play-to-earn model of buying, selling, and breeding digital kittens. By December 2017, players had already spent an incredible $ 6.7 million in-game. The most expensive Cryptokitten was sold for $172,000. One of the most popular recent blockchain games is Axie Infinity, which is a play-to-earn NFT blockchain game built on the Ethereum network. During the game, players earn Smooth Love Potion tokens, which can be traded for real money through a cryptocurrency exchange. Axie Infinity has made over $4 billion in NFT sales since its launch. It also shows that there have been 14.45 million transactions and 1.62 million buyers since its inception.

Blockchain gaming comes with a few advantages. Firstly, it improves security. It is nearly impossible to hack into data across servers because of blockchain’s strength of decentralization and highly effective data encryption measures. Gamers and developers can also leverage blockchain technology to construct resource-rich games and apps, as well as upgrade game versions and earn awards through blockchain gaming mining procedures. The big question is what can NFTs and related blockchain concepts bring to games that don’t already exist, or can’t be replicated with centralised approaches? Another major problem is the lack of regulation of NFT transactions which has led to several scams.

As things stand, NFT games face many challenges, some of which include:

Valve has banned crypto- and NFT-based games on Steam, the biggest PC storefront, inhibiting NFT growth on PC.
South Korea has banned crypto-based games on Google Play and the iOS App Store, limiting growth in one of mobile’s highest-spending markets.
Players have advocated against NFTs in games, as shown by the backlash to Ubisoft’s Ghost Recon NFT announcement.

4. The Metaverse

One of the biggest things to look out for is the Metaverse. The metaverse may be worth $800 billion by 2024 due to a surge in interest during the pandemic. That’s up from $47 billion in 2020. Facebook’s rebrand to Meta is a sign that they, one of the biggest tech companies, believe it is the future. Meta has also announced an investment of $10 billion over the coming years to develop metaverse technologies. In October 2021, Tencent established the F1 studio under the subsidiary TiMi Studio Group for focusing on metaverse development. In June 2021, Epic Games said that it has secured $1 billion in its latest round of investments in its quest to create the metaverse, a realm of interconnected virtual worlds like those depicted in novels like Snow Crash and Ready Player One. Disney is developing a metaverse theme park.

But what is the metaverse? A New York Times article described it as “a variety of virtual experiences, environments, and assets that gained momentum during the online-everything shift of the pandemic. Together, these new technologies hint at what the internet will become next.” Despite the lack of a universal definition, the metaverse is already seeing massive traction in the video games industry with Epic Games and Roblox blazing the trail.

For instance, Fortnite — an Epic Games property — hosted a virtual concert that was attended by over 12 million people, and a collaboration between Roblox and Gucci created a virtual Gucci Garden space that sold limited edition virtual bags. One of the digital bags even sold for $800 more than the actual, tangible version! Both of these companies are a great example of how the metaverse can be a superb virtual environment where everyone within can interact and enjoy immersive experiences and stories. While some might simply want to log into the latest FPS game to shoot guns with their friends, others will find room in these worlds to engage in socialising, chatting, or other forms of shared interaction.

5. Acquisitions and Consolidations in the Gaming Industry

In the last few years, we’ve been seeing an increased number of acquisitions and mergers in the video game industry. Behemoths have been acquiring smaller companies to improve their offerings, acquire IPs, and expand their audience base. In 2021, there was a spree of acquisitions starting off with the acquisition of Activision Blizzard by Microsoft for the massive sum of $68.7 billion and Sony acquiring Bungie for $3.6 billion. Several more have come through, such as Sony acquiring game development company Haven Studios and Borderlands developer Gearbox acquiring 250-person indie dev team Lost Boys Interactive to work on Borderlands 4 and a fresh IP. Other significant acquisitions include 2021’s newly-public ironSource acquisition of Luna Labs, Soomla, Bidalgo, and Tapjoy. Liftoff and Vungle merged and acquired GameRefinery, AlgoLift, JetFuel, and TreSensa.

This is true of the mobile gaming sector as well, with mobile gaming giant Zynga acquiring two big Turkey-based developers: Peak Games for $1.8 billion and four-fifths of Rollic Games for $180 million. In 2020, they also announced the acquisition of a Chinese studio – StarLark for $315 million. Embracer Group acquired a total of seven studios in 2021. They also entered into an agreement for $300 million to acquire the development studios Crystal Dynamics, Eidos-Montréal, Square Enix Montréal, and a catalogue of IPs including Tomb Raider, Deus Ex, Thief, Legacy of Kain and more than 50 back-catalogue games from Square Enix Holdings.

6. Games and Cross-Media Storytelling

Recently, there seems to be a barrage of high-standard, hugely grossing media being released based on video games. The release of Netflix’s Arcane (based on Riot Games’ extremely popular game League of Legends) and The Witcher series (the characters based on Andrej Sapowski’s books which became world-famous after the release of the games) have proved that games can also be adapted into media and other IPs which can be extremely successful.

“The Witcher,” was on track to be Netflix’s biggest first season ever for a TV series. Netflix said through its first four weeks of release, 76 million households watched the fantasy series. Future releases are also under production, such as the upcoming Last of Us and Borderlands series based on the games of the same name.

There are also reboots happening of franchises that were initially less than successful, such as the Resident Evil movies. It is being remade into Resident Evil, a new live-action series based on Capcom’s legendary survival horror game franchise, and is coming to Netflix. Another example is the Tomb Raider franchise, whose movies were box office failures. However, Netflix, Crystal Dynamics, Square Enix, and Legendary Television are teaming up for a brand new animated series based on the video game franchise to inject some life into the reboot.

7. The Explosive Popularity of Esports

In 2021, the global esports market was valued at just over $1.08 billion, an almost 50 percent increase from the previous year. This number is expected to increase massively with significant investments being made by game publishers, gaming organisations and their sponsors, and other parties in the gaming ecosystem. If you want to read more about this as well as revenue channels, trends, and the future of esports, check out our article where we get into the details.

Significant revenue comes in from sponsors as well as ads on broadcasts of tournaments, especially international ones. There are also other areas that are likely to explode in 2022 though and the foremost among these is esports betting. The global esports betting market size is expected to reach $13.05 billion by 2025, from $7983.2 million in 2019. The number of esports events one can bet on is also growing exponentially, from 3,000 events available in July 2019 to over 50,000 events in July 2020.

Finally, with restrictions due to the Covid-19 pandemic finally being lifted, a lot of offline events are being planned. These kinds of events are usually held in huge arenas, with thousands of fans attending. This helps significantly with publicity and media impressions as well as increased revenue from ticket sales, limited-time merchandise, and more.

8. VR and AR Gaming Developments

Since the release of novels like Ready Player One and Neuromancer, a fully-immersive virtual universe has been a dream for tech giants, gaming enthusiasts, and the like. VR technology is the furthest humanity has gotten to that lofty goal. Thanks to the falling price of hardware, VR gear such as headsets is becoming increasingly affordable. They also benefit from being capable of functioning both as standalone devices and being connected to a gaming PC to take advantage of their dedicated hardware to enable even more immersive and graphically-rich VR experiences. We’ve gone into VR and its evolution in detail in this article.

The global VR market was valued at $7.7 billion in 2020 and is projected to reach $26.8 billion by 2027 with a CAGR of 19.0% during this period. In the near future, cloud VR could become a reality – further reducing the size of headsets. 2022 might even see the release of Apple’s long-rumored VR headset (though there is no release date yet) as well as the Oculus Quest 3. The PSVR 2 is also due to launch towards the end of 2022. It is the next-generation VR headset that Sony is currently working on and will work exclusively with the PS5 games console. While Meta hasn’t provided an ETA for its next wave of VR products, according to XR hardware analyst Brad Lynch, Project Cambria could release before the Oculus Quest 3. The insider claims that the high-end Metaverse headset will release in Q2 2022, while the Quest 3 will make its debut at Meta’s 2023 Connect event. It is very likely that VR could see a lot more takers in the near future and might even be a major trend in 2022, depending on when the aforementioned technology gets released.

These are the trends which should have significant ramifications for the gaming industry that you should watch out for this year. We work with clients across the industry on custom requests and can provide in-depth data about games such as detailed game breakdowns which can help you identify trends. Reach out to us for data that can empower you to new heights.

18 MayGames As A ServiceVideo Games

Games-as-a-Service : How Games Thrive for Years

by Karthik Balasubramanian0 Comments

When game developer Bethesda charged $2.5 for horse armor in Oblivion in 2006, it probably had no idea that such transactions would make gaming companies billions in the future.

Bethesda had created the world’s first microtransaction – the sale of game items and other intangible digital assets for a small price – and was widely criticized and laughed at: users felt they were paying for something that should have been in the game all along. Bethesda took stock of the criticism, released better, large-scale DLCs for Oblivion (2006) and moved on from the horse armor debacle.

Today, games-as-a-service (GaaS) or live service games such as Candy Crush Saga (2012), Fortnite (2017), and Genshin Impact (2020) rake in billions of dollars and are by far the most popular titles, boasting massive user bases. Many of these games are free to play and make their money mostly through in-game purchases and other monetisation strategies.

In this article we discuss how the GaaS model works and the factors that determine the success or failure of a live-service game. We will also look at how cloud gaming, and the emergence of gaming-as-a-platform, could change the future of such games.

What is the GaaS Model?

A game-as-a-service employs a recurring revenue model by monetizing the gaming experience through microtransactions, subscriptions, expansion packs, ads and digital passes. A live-service title typically has a strong multiplayer or social component and uses such revenue streams to fund and deliver regular updates and content over an extended duration, keeping users engaged for years. Developers provide constant support with patches, quality-of-life updates and game-balancing fixes, while adding new premium content like cosmetic upgrades, areas, quests and game modes.

Publishers can adopt multiple payment models to make such games viable – Fortnite is free-to-play, with microtransactions and advertising collaborations, while World of Warcraft (2004) is a subscription-based game. For The Elder Scrolls Online (2014) you pay for the base game, and can buy DLC’s as they are released. However, a subscription gives access to many DLC’s and various game enhancements.

When Blizzard launched World of Warcraft in 2004, players could try the game for free to decide if they wanted to subscribe. Blizzard was following the lead of RuneScape (2001) – the MMORPG had added a subscription tier that gave users additional content. RuneScape and World of Warcraft were two of the earliest games to use tiered pricing as a revenue stream.

Other games followed suit: MMO’s such as Dungeons and Dragons Online (2006) and Age of Conan (2008) successfully adopted the free-to-play model with in-game purchases. Riot Games then launched League of Legends (2009) as free-to-play, with paid cosmetic upgrades. Valve has implemented a similar revenue model for Dota 2 (2013), and is able to crowd-fund the Dota 2 International – which has the biggest prize pool among all esports titles – through the sale of upgrades that either enhance the game or add cosmetic changes.

How the GaaS Model Pays for Itself

Live service titles are the most popular games today – they had a user base of 2 billion PC gamers in 2020, while pay-to-play games had about 445 million users. Free-to-play PC games generated $22.7 bn in revenue worldwide in 2020. A 2020 survey revealed that 35% of gamers worldwide subscribe to a gaming service. Free-to-play games accounted for 78%, or $98.4bn, of total worldwide gaming revenue in the same year.

The adoption of the GaaS model has powered the explosive growth of EA and Activision. In 2018, EA’s value rose from $4 bn to $33 bn on the back of live service titles such as the annual sports franchises FIFA, Madden, NHL and NBA, with Ultimate Team modes in UFC, FIFA and Hockey bringing in additional revenue. Activision’s value rose from $10 bn to $60 bn thanks to live service games such as Overwatch (2016), Destiny 2 (2017) and the acquisition of the social gaming company King and its casual games, such as Candy Crush Saga.

Game studios fund new content – and turn a profit – through a plethora of revenue streams:

In-Game Purchases and Microtransactions: Users pay a small fee for in-game items, cosmetic upgrades, enhanced gameplay, skipping the grind, removing annoyances like timers, and more. Some notable games that employ this revenue model are Fortnite, Dota 2 and Candy Crush Saga
In-Game Advertising: Ads are mostly restricted to mobile games, though there are examples of in-game advertising in other platforms as well. According to a study conducted by Accenture, more than 73% of mobile gamers report openness to receiving in-game ads. Ad revenue from gaming is expected to reach $56 bn in 2024. Examples of such ads include Fortnite’s collaboration with the Air Jordan clothing brand and Pokemon Go’s contextual promotions, where a Starbucks ad also directs the user toward the Pokemon at a nearby Starbucks outlet.

Subscriptions: Users pay a subscription fee to play a base game that receives regular content updates, or to unlock new DLC and expansions.. MMORPGs such as World of Warcraft and The Elder Scrolls Online (ESO) follow a subscription model.
Digital Passes: Season Passes and Battle Passes offer different types of content to gamers. A season pass offers current and future DLC at a discounted price, encouraging users to buy into the game before new DLC and expansions are released. The Battle Pass, however, rewards players with (usually) cosmetic upgrades for completing challenges and reaching milestones in-game. Battle passes can be paid or free, with the paid tier offering a faster progression towards in-game rewards – an important advantage because battle passes are time-limited. Genshin Impact, Apex Legends and Rocket League (2015) are among the games that use the battle pass system, while Destiny 2, Warframe (2013), The Division 2 (2019) sell season passes.

Paid Expansions: Studios also sell large expansions that contain new content, features, game modes and campaigns. Content bundled in season passes are also sold separately, as with ESO, whose DLC can be purchased a la carte if you don’t want a subscription. World of Warcraft also featured paid expansions – on top of the subscription tier, as does Destiny 2. Unlike a season pass, gamers are not buying into DLC before release and can see for themselves if expansion packs are worth the price.
Loot Boxes: Loot boxes are in-game items that can be opened to collect random virtual gear. The ‘loot’ you get may comprise items that are much sought after, or just stuff that’s available at low prices in-store. This means that two players who pay the same sum to buy a loot box stand a different chance of gaining rare or unique gear, which is perceived as unfair. Loot boxes can be purchased both in-game and separately, as game addons.

Monetization strategies can be highly successful: In 2021, Activision Blizzard made $6.49 billion through non-product revenue streams such as in-game purchases, downloadable content and subscriptions, while it made $2.3 bn from product sales. In 2021, Electronic Arts made $1.62 bn from the sale of content addons for the FIFA Ultimate Team game mode. However, gamers can be quite vocal in their criticism, and even abandon a game, if they believe a company has taken monetization too far. In the following section, we will discuss how content rollouts, and the use and abuse of monetization strategies, can drastically impact how a live-service game fares.

GaaS: What Gamers Love, What they Hate

A good live-service game will keep offering more reasons to return to it, and also draw in new players. Live-service games have low barriers to entry – you can start playing them for free, and the good ones have microtransactions only for cosmetic upgrades that offer no competitive advantage. Bad content compounded with exploitative monetization strategies can lead to games losing huge chunks of their user base within weeks after launch.

What Gamers Love about GaaS

Many GaaS games succeed by improving the game through regular updates, and consistently engaging players with expansion packs that include new areas, quests, characters and game modes. Improving content rollouts can also help games bounce back from poor performance at launch. Regular updates can help retain users – a gamer who buys only a few of ESO’s DLC’s still benefits from developer support and may be encouraged to buy more content in the future.

Users love live-service games that feature:

Frequent updates that balance the game, fix bugs and add quality-of-life improvements
DLC-scale content that offers new lands, quests, game modes and other enhancements
Detailed and well-executed road maps based on players’ needs.
In-app purchases that don’t affect gameplay and add cosmetic enhancements

Live-service games are rated mostly on their content and player engagement. Gamerant’s list of 13 best live-service games does not dwell at all on how these games pay for themselves, but on what they have offered to gamers over sustained periods of time. It takes special note of games such as Warframe and Grand Theft Auto Online, which were both released in 2013, but are still drawing in new players because of their expansive content. For such games to succeed, developers must sustain them for nearly a decade – as with GTA Online and Warframe – or longer, as is the case with World of Warcraft and League of Legends.

Games such as Destiny 2 and The Division are also lauded for offering free updates, fixes and gameplay improvements: they remain engaging even if one does not pay for new content. Many developers also improve the stability of their game worlds over time, allowing them to attract new users, and retain existing players, by adding expansions without compromising gameplay.

Live-service games can prove unusually resilient if developers commit to providing quality content and improving the customer experience. Despite a rocky start, ESO greatly expanded its user base after Bethesda added expansion packs that allowed users to explore new lands and regions with engaging questlines, and join major factions common to all Elder Scrolls games. The studio pulled off a similar rescue act with Fallout 76, a disaster on launch – server issues, lack of NPC’s, and poor-quality tie-in merchandise drew widespread criticism. Yet again, Bethesda added new content and updates, including tons of bug-fixes, new NPC’s, and large-scale expansions. In 2021, Bethesda CEO Todd Howard wrote in a reddit post that Fallout 76 was one of the studio’s most-played games, with 11 million users.

Rainbow Six Siege and The Division (both created by Ubisoft) grew in numbers via quality content updates. The Division managed to lose 93% of its player base soon after release, but Ubisoft resurrected it with fresh content and gameplay, and it gained 20 million players. Rainbow Six Siege is described as ‘the king of the comeback’ and drew in 25 million users, and became a major esport, despite being riddled with game-breaking bugs and server issues at launch.

Clear roadmaps can also help drive a live-service game’s success, by telling players exactly what to expect. Even now, games such as Halo Infinite (2021) and Warframe struggle to create and stick to a clear roadmap, which has caused confusion among gamers.

Failing to deliver promises made in the roadmap can lead to intense backlash, as was the case with Bioware’s Anthem (2019). The studio promised a great deal of content in their roadmap, but released a sub-par game that barely resembled what the publishers had led players to expect. The game failed not only because of problems at launch, but also due to a misleading roadmap.

What Gamers Hate about GaaS

Gamers are not too fond of microtransactions and only 5-20% of the community takes part in them. However, about 25% of gamers who engage in microtransactions spend considerable sums on in-game purchases. They used to drive the revenue of free-to-play games, though these ‘whales’ constitute a lesser proportion of in-game sales today.

A live-service game needs money to pay for development and the sustained rollout of quality updates and content, but things go awry when monetization is seen as excessive, drawing the ire of gamers. According to a SuperData report, gaming companies walk a fine line between engaging players with new content, and alienating them with unpopular monetization strategies. Paid cosmetic upgrades that do not offer a competitive edge are mostly tolerated by players.

Gamers will likely protest against exploitative practices such as:

Pay-to-win monetization, where money buys you an unfair competitive advantage.
Over-monetization, where everything seems to cost money, leading to a hollow vanilla game. Basic features cost money, and completing ‘free’ battle passes offers only minimal level boosts or in-game resources, forcing gamers to pay-to-play for a good experience.
‘Random’ rewards such as loot boxes, where there can be great variation between the amount of money paid and the quality of the rewards received.
Broken promises and failure to deliver on game roadmaps.

Exploitative monetization, and gamers’ distaste for microtransactions, have led to the creation of a site that tracks games and rates them on what you might have to spend after buying a pay-to-play game, or starting a free-to-play game. A few games, such as The Banner Saga 2 (2016) are given a ‘Spotless’ rating, indicating full ownership of a title once bought. The website dwells at length on all the things you might have to pay for if you buy a less-than-spotless game.

Fallout 76’s content – or lack thereof – was bad enough at launch, but it also featured pay-to-win microtransactions that further alienated users. In the case of Marvel’s Avengers (2020), the pay-to-win booster upgrades angered players so much that the publisher eventually removed the offending items from the store. Some games retain their popularity despite using pay-to-win economies: Clash of Clans (2012) and Warframe both allow paying gamers to level up faster. However, while such a practice may be tolerated, it is still pointed out and criticized.

In over-monetized games, even base features require in-store purchases. In The Hunter: Call of the Wild (2017), you had to buy hunting licenses to shoot animals in the game. In effect, you could only hit targets at the shooting range if you didn’t shell out money for the right to shoot at animals – in a game that was literally about hunting. The game’s developer Avalanche Studios now offers a pay-to-play version without microtransactions.

In Halo Infinite’s multiplayer mode, the XP progression was so slow that leveling up effectively required playing full-time. You had to play a hundred daily challenges to reach rank one. But you could buy your way past this and level up faster, with an Xbox Game Pass Ultimate subscription, which offered free boosts and gear. The game has since been balanced with a better progression system, involving more XP boosts and credit-drops for users who play for free.

Loot boxes are the most controversial – and perhaps the most aggravating – kind of monetization strategy. Star Wars Battlefront II loot boxes required gamers to shell out extra money to play iconic characters like Darth Vader and Princess Leia. EA’s response to a reddit post on the issue holds the record for the most downvoted reddit comment in the Guinness Book of World Records. The backlash led share prices of Electronic Arts to fall and forced EA to do away with the loot boxes in-game.

Take Two Interactive is being sued over loot boxes in the NBA 2K series of basketball games. The plaintiffs contend that the games induce players to spend significant sums on in-game items and other purchases, even though Take Two charges standard prices for the base games.

Badly monetized games may get lambasted as thinly-veiled cash-grabs, but developers who respect player sentiments and restrict microtransactions to cosmetics can enjoy great success: Fortnite had 350 million registered players in 2020, before its legal conflict with Apple and Google. League of Legends also has a huge player base of 180 million as of 2022, while offering no competitive advantage with its in-game purchases.

In the following section, we will look at future directions for live-service gaming – the emergence of games as a platform, the promise of cloud gaming, and the controversial NFT gaming scene.

How GaaS Monetization Could Change in the Future

While live-service games can keep gamers engaged for years, heavy-handed monetization strategies can spell disaster.

The advent of cloud gaming could utterly transform this dynamic. Cloud gaming could make live-service games highly cost effective and playable on multiple devices. Moreover, new content and updates would be delivered via the cloud, requiring no local downloads. Game companies could agree to a library-based model, wherein a single subscription gives access to constantly updated and remotely accessible games. Cloud gaming also allows gamers to save on hardware, freeing up money that could be spent on in-game purchases. The library model and increased potential for player spending could help publishers eschew aggressive monetization strategies.

Live service games such as Fortnite are starting to resemble platforms, according to Microsoft’s head of cloud gaming. James Gwertzman points out that Fortnite now is more than a service and almost a community, with live in-game concerts, and that some ‘game platforms’ encourage gamers to become developers by offering modding utilities and other creative tools. These citizen developers are able to host their own persistent worlds for games such as Minecraft Realms and Roblox. Such developments indicate that even the creation of new content – central to the success of live service games – is being left to gaming enthusiasts, who can create and sell experiences in a community-powered platform

But what if you could earn just by playing? NFTs – non-fungible tokens – are at the core of ‘play-to-earn’ games, some of which are ‘free-to-play’, though others require you to spend some cryptocurrency. A non-fungible token is a unique and irreplaceable digital entity that exists on a public blockchain. Playing NFT games results in the generation of new NFTs that can be traded both in-game and on cryptocurrency exchanges. In Axie Infinity, you breed NFT monsters called Axies and battle with other Axies. You can purchase monsters and breeding resources in-game – or win them by playing – and sell Axies both in game and on cryptocurrency exchanges to earn money.

If NFTs take off, then any type of intangible digital asset – including the skins and cosmetic upgrades in games like League of Legends, Fortnite and Dota 2 – can be stored on the blockchain and sold on exchanges. But NFTs have been treated with suspicion and scepticism: Valve has banned crypto-based apps on Steam. Neither is Epic bullish on NFTs, because of ‘an intractable mix of [NFT] scams’. No mainstream games have announced NFT integration yet.

Conclusion

In a hit-driven industry, a live-service game can seem a very good business proposition for game developers, but it also entails a commitment to providing updates and new content over the course of years. Such a commitment makes GaaS games capable of surviving disastrous initial releases as well. The adoption of GaaS can help the gaming industry move past an over-reliance on hits from major IPs.

The industry-wide shift to the GaaS model is ultimately a good thing for gamers, who will appreciate the wide range of games on offer provided that publishers refrain from excessive monetization – a real possibility in a future that includes cloud gaming and games-as-platforms.

Gameopedia maintains an extensive and constantly-updated database of live-service games. Reach out to us to get access to data that will yield valuable insights into the world of games-as-a-service.

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Category: Video Games

The History of Advertisements in Gaming

The Types of In-Game Advertising

Why Ads are a Necessary Evil

The Future of Ads in Games

How Gameopedia Can Help You

What is a Digital Game?

What is a Physical Game?

A History of Physical Game Media

Cartridges and Floppy Disks

Optical Media

The CD-ROM Supersedes the Game Cartridge

DVDs Turn Consoles into Home Entertainment Systems

Blu-ray Powers Massive Games

The Prominence of Digital Delivery in Gaming

The Rise of Steam

Digital Stores for Consoles Evolve

Why Have Physical Game Sales Declined?

Conclusion

2010-2016: Innovation and Mobile Multiplayer

Unique Multiplayer Titles Refresh the Genre

Minecraft (2011)

DayZ (2012)

Dota 2, GTA Online and Final Fantasy XIV: A Realm Reborn (2013)

Destiny (2014)

Rainbow Six Siege and Rocket League (2015)

The Shift toward Mobile Multiplayer

Clash of Clans (2012)

Hearthstone (2014)

Honor of Kings (Arena of Valor, 2015)

Clash Royale and Pokemon Go (2016)

2016-2020: The Rise of Hero Shooters and Battle Royales

The Rise of the Hero Shooter

Overwatch (2016)

Multiple Games Adopt the Hero Shooter Formula

Valorant (2020)

Battle Royale takes Centre-Stage

PUBG: Battlegrounds and Fortnite (2017)

Battle Royale Becomes a Craze

New Styles Emerge, Old Ones Return

The Pandemic and Multiplayer

Conclusion

What is Online Multiplayer and Why it’s Important

The Origins and Early History of Online Multiplayer

Early Years: The Multi-User Dungeon and the Internet

The Emergence of Multiplayer FPS

Multiplayer Grows in Variety

The Development of Multiplayer in the 2000s

Console Makers Enter the Fray

Modders Create a New Multiplayer Genre: MOBA

Online Multiplayer Goes To War

Massive Communities and the Proto-Metaverse

Multiplayer Matures, Becomes the Norm

Conclusion

What is an Open-World Game?

A Brief History of Open-World Games

Early History

The Rise of the Modern Open-World Game

The Golden Age

Seminal Open-World Games

The Legend of Zelda: Ocarina of Time (1998, 99/100)

Grand Theft Auto III (2001, 97/100)

Burnout Paradise (2008, 88/100)

The Elder Scrolls V: Skyrim (2011, 96/100)

Minecraft (2011, 93/100)

The Witcher 3: The Wild Hunt (2015, 93/100)

The Legend of Zelda: Breath of the Wild (2017, 97/100)

Red Dead Redemption 2 (2018, 97/100)

Conclusion

What are Exclusive Games and non-Exclusive Games?

The Prominence and Decline of Exclusives in the Console Wars

Gen 1-3: Atari, Sega and Nintendo Come to the Fore

Fourth Gen: Sonic vs Mario

Fifth Gen: Sony Rises to the Top with Game-Changing Exclusives

Sixth Gen: Sony Exclusives Redefine Gaming, Halo powers the Xbox

Seventh Gen: Wii Wins by Appealing to a Wider Audience

Eighth Gen: Sony Wins by Sticking to an Exclusive Strategy