Is TV’s future gaming?

Television is capitalising on the booming gaming industry with the rise of TV adaptions originating from games IP, streamers developing gaming divisions across their platforms, as well as, the production of interactive content. With the growing popularity of gaming, is gaming the missing key in driving the TV sector forward?

There has been growing pressure on TV operators and streaming networks to attract young audiences, given the growing decline of TV usage amongst the young. This week white label B2B cloud gaming solutions provider Gamestream and video technology and B2B2C service provider outfit Netgem announced they had partnered together to integrate gaming with TV streaming entertainment in the service packages of telecom operators.

The service which is distributed to telcos across EMEA, provides telcos access to a catalogue of hundreds of licences intended for a family audience, with additional games added each month. The deal will also deliver new interactive experiences, such as cross-content recommendations so users can switch from video content delivered via Netgem’s netgem.tv offering to a game and vice versa.

Given the popularity of Twitch, the gaming live streaming platform, as well as, video games Fortnite and Roblox, gaming may be the tool to reach the next generation of viewers that have turned their backs on traditional TV.

YouTube has seemingly also adopted the same strategy to merge gaming with the TV experience, with reports that the Alphabet-owned video site is testing an online gaming product among employees. According to the Wall Street Journal, YouTube is testing a new product called Playables, with games including arcade game Stack Bounce being tested internally.

Commenting on the wider appeal of gaming-related content when he set out priorities for the platform in March, YouTube CEO Neal Mohan said that the top gaming creators “helped build incredible momentum – we saw more than two trillion gaming-related views on our platform in 2022”.

Another advantage of the rise of gaming in TV is it opens up other streams of revenues for operators. Overall, the entertainment and media (E&M) sector in the UK is expected to produce £100bn of revenue by 2027, according to PwC.

PwC’s Global Entertainment & Media (E&M) Outlook 2023-2027 report revealed that the Virtual Reality market in the UK is expected to see steady growth in the next four years, driven by the rising popularity of VR gaming and immersive video experiences. Total UK VR revenue is set to increase from £1.3bn in 2023 to £2bn in 2027 at 10% CAGR. VR within video gaming remains a high growth opportunity, growing at 22% p.a. from 2022 to 2027, supported by new games releases.

Omdia’s Senior Data Analyst, Ed Ludlow says: “As illustrated in Omdia’s recent report: The Rise of Games IP in Other Media, games revenue is set to displace pay TV in 2027 as the leading consumer entertainment medium. Film and TV studios do not want to be left behind as consumer tastes and behaviours change and develop.

“In particular, studios have identified gaming as a fruitful source for new content. In recent years, the arrival of streaming services—competing against cinema and traditional TV—has seen demand soar for familiar and marketable IP. With two-thirds of US consumers identifying as gamers, the dedicated fan bases and existing IP in games are thus becoming more valuable as adaptation material.”

He adds: “On the flipside, gaming adds a competitive advantage in the SVOD landscape, particularly with regard to subscriber retention. In 2021, Netflix launched a dedicated gaming section, including games based on its own IP as well as third-party titles. Though Netflix

is so far the only major SVOD player that has launched a dedicated gaming section.

“Media brands will always look to extract the maximum revenue potential from their most recognisable IPs, and may take inspiration from Japan. Japan has utilised the synergies of cross-media IP for decades, with Pokémon being the highest-profile example. The original PokémonRed and Green games were adapted into anime a year later before the two storylines converged in 1998’s Pokémon Yellow. The franchise has since expanded to trading card games, merchandising, retail (the Pokémon Centre), live-action film (Detective Pikachu), and augmented reality (Pokémon GO). In 2019 it became the highest-earning global franchise.”

Ultimately, the TV sector is constantly changing and innovating itself, and the integration of the gaming market and the TV market is just another example of that.