“Men trip not on mountains, but they stumble upon stones” – Emma, Clair Obscur: Expedition 33, 2025, Sandfall Interactive/Kepler Interactive
Ever have one of those discussions and, suddenly, discover you’re both talking about different sides of the same topic? Or when you’re both right/wrong? We had one of those discussions recently about gaming. In discussing the gaming market, a friend and I both agreed mobile gaming isn’t really gaming (in our opinions). It’s just a way to avoid thinking; filling time in dull meetings, boring classes; wasting time on planes/trains—and basically designed to get all of your info and pitch ads. As we said… in our opinion.
(Source: Willi-van-de-Winkel, Pixabay)
But we do know serious gamers—you know, the kind of person who thinks nothing of spending 10, 20, or more hours to immerse themselves and challenge the nuances of the game. We recently read (and watched) a number of reviews on Baldur’s Gate III, and it looked like the kind of IP that would be great for a movie. Our serious gamer friend said it was on his to-play list but would have to block out several hundred hours to attack it. But he was taking a wellness break after investing 30 hours to challenge Clair Obscur: Expedition.
Thirty hours, seriously? He quickly explained that the game, which was developed by France’s Sandfall Interactive, was on a par with the best French cinema. A good recommendation, but we’ll wait for the 2-plus-hour movie.
Actually, the movie/show industry—and now streaming—has always drawn themes and hero/villain storylines from the gaming industry. After all, according to one research firm, gaming is the world’s largest entertainment industry at 70.8%, followed by movies at 21.2% and music at 8%. Some might say the industry survives and thrives because of the game developers’ work.
Today, the streaming market may not yet be 20 years old, but it’s already big—projected to be worth $109 billion this year and $194 billion by 2032 as it entertains more than 1 billion of us around the globe with a broad range of genres. Nice, but gaming is a mind-boggling $523 billion business and is expected to reach $692 billion by 2029, with an active playing audience of nearly 3.4 billion.
Gameplay is not only global, but it also covers every age category, especially the younger millennials, Gen Zers and up, and emerging Gen Alphas. According to eMarketer, almost three-quarters of Gen Zers will be digital gamers by 2027. In fact, Reed Hastings, former CEO and founder of Netflix, told Wall Street that the world’s leading video streaming service’s most serious competitor for people’s time and engagement was video games. That was probably one of reasons the company acquired casual game developers Night School Studio, Next Games, and Boss Fight Entertainment.
Of course, Wall Street was surprised/skeptical about the company “losing its focus.” After all, adding gaming to their library would dilute the company’s attention—and investment—from its major goal: film/show leadership. They missed the key benefit of gaming… stickiness.
In addition to monitoring how rapidly the organizations are growing their streaming viewing audience, Wall Street’s biggest “complaint” about all of the streaming video services is churn. Streaming churn is inevitable because people have a broad range of entertainment interests and from its outset, streaming sought to set itself apart from pay-TV by making it fast, easy to come in, and leave. People hop in, watch the stuff they want to watch, and move on. The services have to invest in more content. Broadening the library offering and helping subscribers—especially the younger audience—also makes the service more “valuable” to folks thus reducing churn.
Together, the services will invest $95 billion on shows/movies this year in order to add two new subscribers to their diverse audiences. But churn is a never-ending cycle of people adding and subtracting services to their viewing options. Beefing up their library of 100-plus games won’t rachet up analysts’ heartbeat with headlines screaming “10 million new players in the last week.” But it could keep subscribers involved with the service longer, making them more valuable to the company.
In addition, the streamers’ game offerings could help folks relieve stress, momentarily escape the chaos around them, provide a sense of accomplishment/achievement, fill spare time, and maybe even enable them to creatively express themselves. It not only builds long-term subscriptions, but the right games could help build community, which is vital to keeping and growing audience numbers.
Admit it, if you can become involved in a game and explore alternatives that affect your play outcome, it’s tougher to leave the service—even if for only a few months. The more you use it, the more valuable it becomes. Those entertainment investments beyond movies/shows have been key to Amazon, Apple, and Google (YouTube) in becoming major purveyors in all things entertainment. Since even awards are becoming less important, the broadening of their entertainment services becomes an even more important differentiator and more of a reason to stick around.
The pandemic had an enormous—and very positive—effect on almost every segment of the gaming market: mobile, console, PC, handheld, streaming. Game developers couldn’t develop/release new games, new versions fast enough to get their chunk of the existing and new players. Beyond the pandemic hiccup of usage, video game growth has been steady, but the annual rate of growth isn’t always predictable.
Power players—The really serious game player always reaches out for all the power and speed they can afford to optimize their gaming experience. Nvidia and others are more than willing to meet the demand. (Source: Nvidia)
Arguably, no company enjoyed more positive growth than Nvidia, the longtime leader in the GPUs and GeForce graphics cards that enabled creatives to develop/deliver unprecedented gaming speed, performance, quality, and photorealism ,as well as gamers who would pay almost anything to squeeze every ounce of speed and performance out of their systems. Yeah, we realize that today you think of Nvidia as the guys that paved the way for AI everywhere and in everything; but according to Jon Peddie, a well-known graphics industry guru, deep in his heart, Jensen Huang, Nvidia CEO, is still a gamer. AI chips, services, and applications just happen to be a very profitable—and sought-after—side gig for the company.
Unlike the theatrical market, which suffered a devastating market downturn when folks were isolated, the video game market experienced a slight downturn when people returned to their new normal. But video games quickly returned to what industry analysts refer to as steady/sustainable growth.
The technology has had a profound impact on the entire entertainment industry. The tech streamers have begun working more closely with game developers to acquire IP that can be the foundation for new/different films/shows and enable the exploration opportunities in modifying device-centric games to more open cloud streaming models.
Performance infrastructure—Netflix built out and manages their global content network to provide the highest possible movie/show delivery and is well positioned to meet the needs of the serious video gamer. (Source: Netflix)
The evolution to device-agnostic services makes it easier for streaming services to broaden their offerings to subscribers over their content delivery networks (CDN) around the world. Netflix CDN features servers in 233 locations around the globe to support its bandwidth-intensive service for subscribers in more than 190 countries.
According to Omdia, 86% of Gen Zers are playing video games daily or weekly on smartphones, game consoles, computers, and home screens. The addition of video games to their library can make the entertainment services more valuable to the entire household.
The trend probably played a key role in Disney’s decision to shut down its metaverse division and move the IP into their gaming activities—as well as their major investment ($1.5 billion) in Epic Games. It also inspired Comcast’s interest in EA, even though the discussion ultimately collapsed because the two parties couldn’t agree on little things like… structure, price.
Today, there is strong interest in all types of video games, and new game developers/distributors are interested in monetizing more of their new/old IP. At the same time, tech-based streamers have the expertise needed to deliver hundreds/thousands of high-bandwidth content simultaneously to subscribers. While our game-hardened friends might disagree, leveraging game IP into new movies and shows as well as adding time-consuming games to their libraries makes a helluva lot of sense. It’s a win/win/win that keeps the subscriber connected to their streaming service.
A lot of movies have emerged from game IP to be animated attractions on the big and home screens, such as Mario Bros. and Pokémon. Both became very high-grossing films. But they are far from the only video games that have become major films, which include Lara Croft, Mortal Kombat, Rampage, Uncharted, Assassin’s Creed, God of War,and many more. While few game titles found their way onto the pay-TV schedules, a number of them have shown they can draw major audiences on streaming, including Fallout, The Last of Us, The Witcher, Castlevania, League of Legends, with more to come.
A growing number of regional game developments are being evaluated by streamers because the titles are not only popular in their respective home countries, but just as with locally developed movies/shows, they are proving that they can have strong global appeal.
People in the Asia-Pacific region have long been dedicated game players dominating the mobile, PC, and console gaming arenas—NewZoo reported 2024 game revenue for this region at $84.1 billion. An estimated 781 million of the total Chinese population of 1,416 billion play video games, with a significant portion of them playing daily. They deliver a steady flow of income estimated at more than $66 billion annually to Tencent, MiHoYo, NetEase Games, and others. Gameplay is so popular in China that the government took steps to limit how much time younger people can spend staring at/playing their games.
While other countries and the WHO (World Health Organization) have warned adults about “gaming disorders” that can arise from extended play, China officials called it “spiritual opium,” prohibiting minors from playing on school days and banning them from livestreaming platforms after 10 pm. Fortunately, they are free to stream video content during those periods, so not all is lost. But they don’t restrict or warn folks in other parts of the world about extending their play time. Many of their game titles as well as those from Japanese and South Korean developers could be licensed by video streamers and studios for us nonplayers to enjoy and keep gamers hooked/involved, but yeah, without the cumbersome Meta goggles!
Gaming—Who are today’s gamers? There are no longer “typical gamers”—if there ever was. Today, they are men and women, kids and adults (even seniors). (Source: Vazhnik, Pexels)
Gaming is often classified as something for kids; but like all video content, it’s enjoyed by people of all ages —male and female. AARP reports that more than 45% percent of adults 50-plus get in some play time at least once a month, with at least 45% of those playing daily. And while video games are considered a male bastion, 52% of women said they played daily, compared to 37% of men. Sure, for young folks, gaming may be an integral part of their daily life. However, for young and old, it’s a way to create and build relationships. Therefore, video games should be an integral part of today’s streaming services to acquire and build long-term relationships with their subscribers.
Perhaps that’s why Netflix COO Greg Peters told market analysts earlier this year that the streamer will focus on delivering subscribers games and the gaming experience that connects and resonates with their growing global subscriber audience. After all, sometimes it feels cathartic to not simply watch a good movie/show but actually climb inside it and destroy stuff!
As Esquie said in Clair Obscur: Expedition 3 and our game-hardened friend reminded us:
“Finding a rock and losing it is better than never finding a rock in the first place.”
What Peters really meant was that they want to get folks to check in and never check out!
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