THE FUTURE OF VIDEO GAMES

With PlayStation 5 and Xbox Series X around the corner, it begs the question: What is the future of video games? From a business standpoint, it’s an especially curious time if you think of things through the lens of Generation Z – one of the largest, most well-educated and ethnically diverse demographics ever, whose spending power now exceeds $143 billion… or $333 billion if you account for their overall influence. Representative of the next generation of consumers for game makers’ products, a whopping 93% of parents say Gen Zers directly influence household purchases as well. Just one problem: Research tells us that their attention span, like that of Millennials, is about 8 seconds.

Anyhow, we know most console players skew older. And we know that just 18% of Gen Zers media consumption each week goes to interactive gaming – only 7% of which is done on consoles. At the same time, it’s no secret that members of this generation’s playing habits skew more towards online, social, and short-form experiences spread out across myriad different devices. On the bright side, Gen Zers see gaming as a way to connect and socialize – in many ways, it’s this generation version of going to the mall. But on the downside, they expect video games to operate more like services than products, and consumption is poised to grow more on mobile devices than set-top systems. As noted before too, their attention is harder to capture than ever, even as they’re increasingly drawn to free-to-play products with heavy levels of player interaction – which, thanks to the fact they require little to no commitment to pick up and put down – these audiences either play obsessively, or touch once and never look at again.

So what do all these shifts mean for traditional game publishers? It’s a good question, especially if manufacturers continue to double down on 40-60-hour experiences that tie you to a set-top TV. At Gen Z’s age, I had stacks of NES cartridges and handheld games I couldn’t wait to play, and I got most of my information from popular print magazines. But Generation Z doesn’t spend time flipping through newsstands, and often likes to hop from online rounds of Roblox to their favorite iPhone apps, sometimes grabbing a game from Steam that they saw covered in the endless rush of Let’s Play YouTube videos they’re streaming along the way.

So essentially, all eyes are on the next generation of consoles at the moment. And make no mistake – I suspect that they’ll still play well with audiences of all ages. But while some game makers and manufacturers stand to do well in the next few months by continuing to follow familiar formulas and franchises? It’s 10 years down the line with the next next generation of hardware that you have to wonder about, and how things play out when Gen Z really becomes the dominant gaming audience. So as you think about what’s coming next for the game industry, I urge you to look far beyond this holiday season, and at the many fundamental shifts that are occurring in player behavior. Otherwise, as Microsoft head Phil Spencer has pointed out, console wars may be moot – by looking farther ahead and better playing to new and changing audiences, it may be Google, Amazon, Verizon, and other mainstream technology giants who dominate the gaming industry.