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Streaming is the key to discovery

Sam Naji and Damian Abrahams explain why livestreaming is crucial for understanding gamers and how it translates to sales

The dynamics of game discovery and consumption in the video games market is constantly changing. Relevancy and game discoverability has become just as critical for game producers as the quality of the game itself.

The release of the number of video games in the last ten years has become extensive. Steam currently boasts over 50,000 titles and there are almost 1,000 new titles released every year on the PlayStation and Xbox consoles alone. Gamers are literally flooded with new content daily, so discoverability is now one of the major concerns from content makers.

The very nature of game discovery has had to keep up with the times, over and above traditional methods such as advertising, word of mouth or demos. Today, it is all about streaming videos.

The very nature of game discovery has had to keep up with the times. Today, it is all about streaming videos

One of the major business requirements from game producers is the need for up-to-date data on which games are being watched on the various streaming channels: Twitch, YouTube Gaming, Facebook Gaming, Trovo and so on. The relevancy of these channels for content makers is so that their games can get discovered. This is because there is a strong correlation between video content viewed and games bought.

The newsletter TheGameDiscoverCo, dedicated to helping indie game makers get their games discovered on Steam, has repeatedly found that the number one factor in driving discoverability is streaming. It is crucial for games to get aired and watched -- the more popular the streamer, the better.

The content streamed can either take the form of esports, walkthroughs, couch co-op, multiplayer, and reviews. The common element is that the streamers make it fun and enjoyable to watch for their audience.

Streaming shines a light on gaming demographics and revenue potential

Every year the value in gaining insight in streaming video game content is getting larger. In the 2020 version of the UK Government's Ofcom regulator report the regulator found that gamers on YouTube were watched by a solid 30% of UK 13-17 year olds in April 2020. One in every five UK children aged 3-17 years old watched esports videos between April and May 2020. Only humourous videos and music videos garnered more young eyeballs.

Sam Naji, Sparkers

According to Sparkers' Audience tracking service, it was found that in April 2022, 2.5 billion hours were watched from 78 million hours of broadcast from 5.8 million channels with 42 thousand games streamed live.

For streamers, all this video game content can translate into financial rewards attained from a mix of subscriptions, sponsors from esports companies, advertising revenue and even donations.

According to PC Gamer, the Top 10 Twitch earners are expected to comfortably make in excess of $1 million a year. A quick Wikipedia search for the top streamers reveals some startling numbers. Ninja, a streamer specialized in streaming games for children has over 17 million followers. Over 25 streamers (including Rubious, shroud and xQcOW) have over 5 million followers.

In January the BBC news ran an article on YouTube's rich list and found that two video game streamers, Markiplier and Unspeakable earned more money in 2021 than Ryan Kaji, who became famous worldwide from his Ryan's Toy Review channel.

Classical digital advertising is playing second fiddle to streamers and video bloggers pushing brands and showcasing product.

Today, YouTube Gaming and Twitch are in a bidding war to gain exclusive rights to some of the most popular streamers. For example, DrLupo, TimTheTatman and Valkyrae all left Twitch for YouTube Gaming after signing new contracts with Google. Streaming is getting bigger by the year.

The importance of influencers is very much evident in the changing landscape of digital advertising. According to a Forbes article called 'The Importance of Influencer Marketing In The New Normal Digital Sphere,' it found the conversion from clicks on paid advertising averaged to 0.47%, namely that "99.53% of impressions on digital advertising fail to inspire consumers to click and take action." That means classical digital advertising is playing second fiddle to streamers and video bloggers pushing brands and showcasing product within their livestreams.

For game publishers, livestreamed gameplay generates the added advantage of free advertising for their games despite the thorny issue of copyright violation of what constitutes "fair use" and profiteering. Nevertheless, game publishers have benefitted from increased awareness of their games, helping to propel the purchase of modest independent games like Rocket League and Fall Guys, which was superseded by Among Us. Even retro games have found a market on the streaming platforms. For example, Super Mario 64 established an audience for playthrough against a live timer.

For many publishers, the real focus comes from uptake of multiplayer and live service games. Multiplayer communities live or die with the interest of the communities they serve. Getting the latest multiplayer game streamed among the top streamers can make a game. This is because streamers can tap into the zeitgeist or can even set new trends.

This was witnessed with the meteoric rise in the popularity for Among Us. The game launched in 2018 with an average Twitch viewership of several hundred, but by the summer of 2020 streamers xQc and sodapoppin started to play it on their channels. As a result, awareness for the game exploded. The game's Twitch viewership skyrocketed to just under 600,000 views. Consequently, sales for the game boomed on Steam and the PlayStation, resulting with the game attaining household name status.

An Audience worth knowing and why Audiences matters

Over 50% of 1,000 surveyed UK adults aged 18-54 years reported that viewing a game "significantly impacts" their buying decision for that game. This important finding came from a 2020 report called Growth in the Video Gaming Ecosystem: the new role of games by OC&C Strategy Consultants, a team of global strategy consultants, in partnership with Google.

The research revealed other interesting findings, too. A third of viewers were female, two-thirds over 25 years old, and a surprising 37% of viewers didn't play video games.

Damain Abrahams, Sparkers

This poses the question, why and what were they watching?

Most respondents watched on-demand content such as reviews and gameplay, but more importantly those who watched livestreaming content was growing at a rapid pace. It comes as no surprise to many parents that the trend of watching live gameplay online is becoming as natural to young people as watching live TV was for older generations.

Demographics and types of content are just two examples of how leveraging data analytics can help formulate a customer segmentation model that enable effective content strategies for different and newer audiences.

Understanding the motivations of viewers is critical for engagement. The research expectedly found many viewers wanted to improve knowledge and skill to help with their own gameplay. But the other key reasons seem to coalesce around a social theme. To be entertained, feel a connection with like-minded people and a desire to understand a streamer as a person is a clue why so many non-gamers are also watching this type of content. They choose to be "emotionally invested in streamers who build communities authentically." For a publisher the key is to turn all that interest and passion into conversion into paid-for content.

As more games are designed for open worlds, such as Horizon: Forbidden West or Elden Ring, successful marketers will need to engage with communities' post launch. Continual engagement will become crucial in developing brand awareness, and this is why streaming tracking services are invaluable.

Whether publishers and developers choose to give streamers early access of their games or to collaborate with streamers with rewarding viewers with in-game loot, it is these types of continuous tweaking that will help to maximize the lifetime value of the game.

Sparkers is a Belgium company that operates the panel Games Sales Data (GSD) for ISFE. Audience is a new streaming tracking service provided by Sparkers which combines real time data on streaming services with sell-through data for both the physical market and digital markets.

If you are interested to know more about Sparkers, GSD and Audiences and how they can help you with video game analytics please contact info@sparkers.com.

Sam Naji is a video game analyst consultant. Damain Abrahams is a market analyst and provides insights on how the macro environment is impacting the video game industry.