A lot of people misunderstood the gaming industry numbers especially when it comes to the 130Billion dollar earning. Many assume the money spent was on the actual games themselves and that is one of the biggest misconceptions in the sector. But the reality is completely different. So I wrote this blog to clarify these points.
Usually when we talk about the gaming industry earnings most of it doesn’t actually go to the games. As a matter of fact, if we look at a typical gaming industry supply chain, we see only a small portion going to the Game Creators and most of the money goes to the Experience Creators. And that is another widely seen problem, interchangeably using the terms Experience and Games. Yes, games are all about players experience but experience are not always game and usually they are bigger in their outreach and engagement. To clarify this point let’s look at the following example about the Football Game and the Football Experience. When talking about the Game: football usually we mean the core experience which consists of 22 players, a ball and two goals, 90 minutes and the rules of the game. Now we call this the Game or the core experience. And honestly speaking this experience existed for a long time and almost nothing changed about it and there is actually no money in it. Whereas the European football industry (the football experience) is worth 22 Billion pounds. By now you might start to see the pattern that differenciates the game and the entire experience. When we’re talking about experience, it takes the core game experience (the football game) and extends it. It is about teams formed on human ideologies (politics, economy, social class… each team has an ideology it supports like the Brazillian football team represents nationalism, and Real Madrid represents social class and economy…). These teams need skilled ‘paid’ players and that contributes to the ecosystem making the cash flow come back to the consumer aswell. This is another big misconception, game developers assume their games should be played by everyone so they can get money which is not possible, and usually not important and also a bad sales strategy as well. If you get money from the players it’s a terrible business model because it’s lose lose game for the user (there is no actual incentive/benefit for being better at the game). The best business model is you don’t take money from the best player, as a matter of fact you give them money to play and get the real money from the people (community) who like watching these professional players play and from the business firm who want to target these audience. It doesn’t end here, these teams need to come together and compete, so competition on all level (international, regional, national, league…) is also part of the experience. And these competitions need to be structured and organized so has to work together seamlessly (you compete on a local level and the winner goes to the regional then to the international…). As a matter of fact this is the most important aspect of the whole football experience. As you can see the football experience has nothing to do with the actual football game. It just uses the core experience/football game as platform for ideologies to come and compete in a controlled safe environment. And usually these experience create an economy within the experience.