A PAPER ON PRODUCTS/ SERVICES INNOVATION AND STAKEHOLDERS

INVOLVED IN IT – An overview of Gaming Industry

SUBMITTED TO - PROF. ABHAY KARDEGUDDI

SUBMITTED BY: Nandita Bhutra

MBA IB (MARKETING)

BATCH: 2020-22

PRN: 20020241059

For both established organisations and startups, there are several opportunities and threats.
Who sees, understands, and acts best in the face of uncertainty determines the difference
between those who take advantage of opportunities and those who succumb to risk. This lays
the foundation for innovation. The most successful companies coordinate their policies,
processes, and culture to keep a constant flow of innovation flowing, which generates top-
line growth and bottom-line efficiency. These successful innovators also collaborate with
others to learn new things and find new opportunities. For most businesses, the development,
innovation, and commercialization of new products and services are critical business tasks.
Current products are changed and reinvented to exploit existing market potential, while new
products are developed to explore new market prospects.

For the purpose of this research, the gaming Industry has been chosen and the above holds
true for the gaming industry as well. Video Games, hate them or love them, but everyone
knows about them. They are one of the most interactive forms of entertainment on the planet.
Kids to Adults all love to indulge in a relaxing session of gaming, however, this was not
always the case. The earliest games can be traced back to the 1950s. One of the games they
developed was an interactive form of tic tac toe. These games although not available to the
masses were extremely popular in the universities where they were developed.
Objective for selection of the topic and Industry: When the world plunged into pandemic
and everyone started going into depression and loneliness, games came to the rescue. A lot of
new experiments and innovations had been happening in this industry even before and those
came to light during the pandemic. Understanding these innovations will not only be
interesting but will extend their usability in the professional sphere as well. Companies have
started using gaming technology as an important marketing technique.

Hence, the following research is based on the history and innovation in the gaming industry.

Thesis Statement: The pandemic has helped the gaming industry grow multifolds and have
lead to building multiple successful innovations in the industry. These innovations are also
being used for building engagement activities in marketing.

Pre Pandemic

There was one more factor that led to this sudden surge in gaming, the invention of the
PlayStation by Sony Computer Entertainment. It was a video gaming console that was
capable of producing extremely pleasing graphics and experience (compared to that time).

By 1998 Sony had already released PlayStation 2 or PS2 which then required the approval of
the Japanese Defense Ministry to be sold commercially due to its extremely sophisticated
graphics engine which could even be used in missiles to track and identify targets.

Minting Cash

The gaming industry kept surging and there were no signs of slowing down. The premium
games were now costing about 40-50 USD or even more depending upon their rating, but
something needed to be done to reach those extra heights. Cue in microtransactions, it’s
something we all have heard of or seen but you might be unfamiliar with the term itself.

The era of micro-transaction

Micro-transaction in gaming refers to the amount that is paid, over the upfront cost, to the
creators of the game to access extra content inside the game or to progress further in the
game.

FIFA 09 was the one of the first game to introduce a game mode which would require players
to mandatorily make transactions to play and stay at top of the game. The mode saw huge
success both in terms of revenue and popularity in gamers. Each year the model was
improved and built upon and the revenue increased.

In 2012 came a game called Counter Strike Global Offensive or CSGO which would go on to
register one of the single highest micro-transactions made in the history of the games with in-
game items selling for thousands of dollars in online betting markets.

Microtransaction became so huge that they were making more money than selling the game
itself. This was proven by GTA V the fifth installment of the Grand Theft Auto series by
Rockstar Games. The game made over $500million in 20history and innovation in the
gaming industry. With the increase in the sale of the games and the success of
microtransactions, many developing companies leaped into the idea of microtransaction.
Free 2 play market

The idea was so rewarding that a new market of games sprung up, the Free 2 Play market.
The free 2 play games were basically the games that required the players to pay nothing
upfront to the developer to play the game, essentially making it free. I just said upfront right,
these games were modeled so that the players were one way or another kind of forced to pay
a certain amount in micro-transaction to advance in the game. The companies leveraged the
power of addiction and creative gameplay modeling into making these games a greater
financial success than some of the premium games.

Online gaming was also on the rise as the internet became a common thing across the world
and the frequency of these transactions became even higher. Paying for more content and
items inside the game became a norm, if you want better stuff inside the game just pay for it.
This also started a new trend where people would show off their limited in-game items.  

The Pandemic

When the world plunged into pandemic and everyone started going into depression and
loneliness, games came to the rescue. Steam, which is a video game digital distribution
service by Valve, saw highest concurrent player count of over 120million during the
lockdown.

The PC gaming industry went to the high no one even knew existed, the cost of the premium
games increased from 50-60 usd to 70USD and people were paying it. The industry was
valued at upwards of $50billion. Sony also released their latest 5 th gen console PS5 which
was sold during the preorder within 5 secs of it being put up. The scarcity of the stock is so
high that people are unable to purchase one even after 8 months after its first pre-order went
live.

But there was also one dark horse that emerged during this pandemic, the mobile gaming
industry. The mobile gaming industry focused on the Free2 Play market and stuck to ads and
micro-transaction for financial gains. This led to the mobile gaming industry value between
80 to 100 billion USD.

Games like PUBG and Call Of Duty are the front runners in this sector and continue to grow
their player count.

Innovations during pandemic

Cloud gaming and Streaming:

People's consumption of more digital information has been fueled by increased smartphone
use, faster Wi-Fi and internet access, more reliable mobile networks, and higher hardware
storage capabilities in mobile devices. Users usually download games to their devices. With
an internet connection, gamers can play with people from all over the world, yet the games
continue to operate locally on their devices. This can have an effect on a player's device's
performance over time. Users can play games on their devices via cloud gaming and
streaming, but the games are stored elsewhere, such as at a data centre. Many competitions
are held or leagues which include games like Rainbow Six, FIFA, League of Legends, etc,
and these competitions enjoy a viewership of over 380 million people. More people watched
the final of the League of Legends than the NBA finals in 2016.

Digital distribution:
Netflix and Amazon have completely transformed the home video business, and the video
game industry is following suit. While game revenues are increasing, tangible game sales are
decreasing, resulting in a drop in brick-and-mortar video game businesses.
Digital distribution of games via platforms like Steam complements publishers' marketing
methods by allowing them to send out continual communications to customers, offering new
features, upgrades, and games on a regular basis.
Mobile Gaming:
Consumers seeking new methods to keep entertained are increasingly turning to mobile.
According to Deloitte, mobile is the main engine of growth in the video game business, with
more than 2 billion individuals globally playing mobile games. Mobile gaming grew in
popularity during COVID-19 lockdowns because it provided consumers with easier access to
video games.

Continuing Innovation
AI, AR and VR
Artificial intelligence (AI) is a term that refers to computer algorithms that enable machines
to think and learn in the same way that people do. In video games, AI can learn to be
unpredictable, just like a human player, and develop ways to outsmart other players. In the
game creation process, AI could be beneficial. AI is being used by game creators to create
games that adapt automatically based on player feedback. Although the phrases augmented
reality and virtual reality are frequently used interchangeably, they provide distinct
experiences. Virtual reality games immerse players in software-created worlds employing
gear from Samsung, HTC, Google, PlayStation, and Facebook. AR games overlay a digital
layer on top of reality, superimposing video and visuals.

Gamification:
Taking multiple lessons from the innovation in gaming industry and it’s success many
companies have started using this innovative way to market their products. Gamification is
the process of introducing game concepts to something that isn't a game in order to boost user
engagement, enjoyment, and loyalty. This means that gamification applies components of
game design, as well as the broader concepts and theories that drive gameplay, to other
contexts. Second, gamification is frequently used to solve issues. These challenges vary from
lack of workplace involvement to voter indifference.
Below are the few examples of some companies which used this technique and launched
sustained innovative campaigns:
1. Byju’s
Students learn fundamental concepts with Byju's educational software, which includes
videos, practise quizzes, and adaptive modules.
 Byju's employs gamification by allowing students to participate in games, receive
reward points, and compete against one another in various quizzes and tournaments.
Students are motivated to work harder to achieve greater results when they compete
with one another. This type of gamification creates a win-win situation for both the
app and the users.
2. Fitbit
Fitbit is a gamified fitness tracker that connects to an app that has the following
features:
The user receives a badge in the form of measurable achievement when they complete
a specific action, such as walking a certain amount of steps, while using the app. The
Serengeti badge, for example, is granted for 500 kilometres, which is the length of the
Serengeti National Park.
Participation in social activities. You may identify Fitbit users among your friends
and compete with them in a variety of sports-related challenges.
Inventive problems. Fitbit allows you to practically walk around any city you like.
You may "visit" a new city while staying fit in this manner.
3. Goibibo
Goibibo has made their app more gamified in order to leverage on the current trend of
the Indian Premier League. The app launched goCashFest, which allows users to earn
GoCash by watching the Mumbai Indians play. Users get GoCash for each 4s, 6s, 50,
100, wickets, and victories during the match by using the app while the team is
playing. This goCash could be used to book tickets on Goibibo till the next Mumbai
Indians match.

Stakeholders
Online gaming communities are booming, and they're more dynamic and diverse than they've
ever been. External partners are engaged in the development of the majority of game
productions.This could be a publisher, a venture capitalist, an owner of intellectual property,
or a project financier. Multiple partners are frequently involved.
Each stakeholder has a strong interest in the game's success, and they will all want to know
how the project is progressing, but they will have different needs. The end consumers are
the ones heavily invested in the gaming industry innovations. They keep an eye on any
upcoming updates and are ready to spend for the same. The gaming technology also
interests the marketers in general for these can be used to develop engaging marketing
strategies as explained above.

Conclusion

To conclude, the industry has undergone rapid innovation. It has developed various
technologies which is not only being used in the world of gaming but also as an engagement
activity. Gaming would be one of the biggest industries in the world and may even become
something that people look forward to do professionally just like sports.
References:

https://blog.getsocial.im/is-gamification-the-only-way-for-apps-to-survive/

https://online.maryville.edu/blog/future-of-video-games/#gaming-industry

https://www.growthengineering.co.uk/definition-of-gamification/

https://blog.vinfotech.com/fantasy-sports/indian-brands-gamifying-customer-
experiece-for-engagement

https://www.fastcompany.com/90600212/gaming-most-innovative-companies-2021

https://timesofindia.indiatimes.com/blogs/voices/the-4cs-driving-gaming-innovation/

https://www.gamesindustry.biz/articles/2018-03-06-managing-your-stakeholders-a-
game-developers-guide