Gaming Trends in 2021
Three huge forces are shaping game development in 2021: solo-to-social, games-to-economies and technologists-to-artists.
Three huge forces are shaping game development in 2021: the solo-to-social trend, the technologists-to-artists trend, and the games-to-economy trend.
Understanding these trends is critical to taking advantage of big opportunities —but they also presents new challenges around game design, customer acquisition, development methodology and live operations. Understanding the challenges as well as the opportunities will equip you to build a sustainable game business.
This article will bring this understanding to you, as well as illuminate some of the actual economics around networks, games and communities.
Solo to Social
Years ago people talked about “social games” that were created on social networks. Ironically, these games were almost never social — they merely benefitted from spam and marketing through what was then an entirely unregulated social media ecosystem (if you were around, you surely remember all the requests for nails to build barns in Farmville).
To be clear, I’m not talking about that, or a return to “social games.”
I’m talking about games that are actually social.
It is important to recognize that the ecosystem around games is integrated with communities more than ever. Often, that means that formerly solo gaming experiences are becoming social because of the “meta” that envelops a game — the chat, competitions, community, memes, esports, streaming, modding, etc.
There are huge implications for the way games are designed, operated, nurtured and marketed. I’ll touch on each.
Let’s take a game like Undertale. My kids both love Undertale, which contains no multiplayer features whatsoever. Yet they are active participants around the streaming community and YouTubers. They play fan games based on it. They spread Undertale memes. My son even participates in an Outschool class where kids come together each week for a show-and-tell around Undertale… he’s even taken up playing piano just so he could learn to play the Undertale music.
From a business perspective: what an amazing way to have sustained years of Undertale sales — and furnished the perfect platform to launch Delta Rune.
Lessons for Game Developers
Why does this happen in Undertale, and are there lessons for game developers here?
One set of lessons is to remember the elements that make for a great game in the first place: a really great core loop that players love to master. Memorable characters and storytelling that resonate emotionally. Great music. Undertale has all of these — and without them, socialization wouldn’t have helped much.
The simplicity of the gameplay loop enabled players to create fan games. No-code/low-code tools like Clickteam Fusion and Gamemaker Pro could be used to riff off the experience. The characters and storytelling inspires the imagination, leading to animated series and gameplay variants. One fan even created a game with the PvP and multiplayer aspects that were not part of the original.
It all comes down to community participation: crafting a game around the idea that if you put the right elements in front of your community, they’ll build around it. Here are some of the ways you can embed that experience into your game:
A gameplay loop that players would enjoy modifying — you can make it even easier than Undertale did by thinking about modding as a feature of your game from the beginning, so that players don’t need to spin-up their own toolchain.
A community ecosystem that makes it easy for players to connect with each other: a Discord server is critical these days, and working with some talented streamers to help create content (going beyond promoting the core gameplay itself) is a huge untapped area.
Game makers often think of themselves as creators within the creator economy. That’s true — but if you think about your game itself as a creator economy, you’ll tap into one of the central trends of the metaverse and build a much larger business.
Building Social into a Solo Game
What can you do inside the game?
The game itself is a platform to get your players to jump into the various community ecosystems you promote: wikis, your Discord server, or wherever your players hang out. Be prepared to discover the places your players create on your own, and support them. Surface content, people and events around your community from within the game.
Adding social features inside the game is a good idea even for solo experiences. With minimal effort, you can create events that get players to optimize around certain game mechanics, earn bragging rights, and use that as an opportunity for spreading awareness back through social media, videos and Discord. These events can be built around entirely asynchronous, single-player gameplay.
One of the gameplay genres that is increasingly following the solo-to-social trend is Idle gaming. Look at the success that Cookie Clicker has had with its Discord community (over 130K members at the time I’m writing this). Or check out how games like Archer: Danger Phone and the soon-to-release The Office (both from East Side Games/Leaf Mobile) add competitions, events and leaderboards to the idle gameplay loop to strengthen retention and reengagement.
Content Fortresses and Communities
Ever since the rise App Tracking Transparency (ATT), advertising performance has suffered. In response, larger publishers have begun creating “content fortresses” where they can perform cross-promotion between their games (ATT does not limit tracking between games owned by the same company).
I want you to think of your community as a content fortress — one that might be a bit wilder and uncontrolled — yet one that’s actually closer to the hearts of your players. And this also is an area where small indie developers can compete effectively; sometimes even moreso than a large publisher.
From Game LTV to Network LTV
Traditional wisdom was that if you got the CAC (Customer Acquisition Cost) less than the Lifetime Value (LTV) for a game, you’d find success.
Economically, the rise of communities and content fortresses means that the lifetime value (LTV) of a customer for a single game is no longer the key business metric. It is now the aggregate LTVs of all the games (including franchise sequels, such as the case of Delta Rune following Undertale) that a player will buy or spend money on across the course of their connection to a publisher. I call that metric the Network LTV.
The Network LTV is actually a “store of value” that can become an enormously valuable (albeit frequently undervalued, from a balance-sheet perspective) asset at a game company.
Implications for Advertising
Publishers with large content fortresses will often be willing to finance customer acquisition where an individual game might be a loss-leader, but Network LTV still exceeds the CAC. That has huge implications:
Harder for single-game developers who do in-house publishing and customer acquisition to compete (many will never be able to bid on advertising at scale, due to the unit economics)
Potential for advertising-based CACs to continue to rise overall
Potential for unscrupulous publishing deals to be created where a popular game unwittingly finances a publisher’s cross-selling network at the expense of the developer of that game. Watch your backs, indie developers.
Although I believe advertising is here to stay — it is often the best way to scale a game with the right metric — the best way to mitigate advertising-dependent strategies is to think about community as a more authentic alternative to the CAC<LTV treadmill.
From Games to Economies
Games have always been attention economies. Today, being an effective game designer often requires you to think in terms of virtual economies, the value of virtual goods, DLC, franchise value. In the next few years, nearly all of the revenue generated from games is likely to come from virtual items:
I actually think this trend actually underestimates the total revenue being generated by economies, because it is no longer just the virtual items inside games that are generating the revenue.
The “economy” of a game includes all of the streaming, esports, community activity, modding, etc. In other words, the “solo to social” trend I wrote about above also has an economic reflection. The Network LTV is not only the direct sales of games and items, but may also include events and activities and opportunities for collaboration with modders, streamers and esports personalities. Indeed, recent data shows that when you include these aspects of the game economy (along with hardware), the market size nearly doubles relative to software sales and virtual goods alone:
The “fuel” for these economies is a regular supply of content coupled with events that reengage your community. Much of this content is in-game (new items, new stories, new maps, etc.) You can also think about incorporating the external content (mods, livestreams, social media, etc.)
Above, I referred to your “network” as a form of store-of-value for the game you’re creating. Savvy game-makers like Undertale realized that they’d acquire value in this network even when inviting others to riff their creations. Games like Axie Infinity realized they could create massive retention (day 30 of 90%) by only having a take rate of 5% (i.e., their economy, built around NFTs, recycles almost all of the value between the players and speculators of the game).
Esports, streaming, modding, etc. is a way to build the economy around your game; you’ll benefit as you invest in this store of value, because you’ll be releasing more content, updates, sequels, etc.
Although it is less of a surprise to people who have studied market disruption: the less control you exercise and a lower take rate may increase value within your game’s economy.
Now, you might wonder how you can recreate the success of an Axie Infinity or an Undertale without the unique community elements and market timing these games enjoyed. There are some things that you can bring directly into your game — whether multiplayer or solo — to facilitate these player behaviors.
An excellent way to tie it all together is a regular cadence of events that bring your community together. I’ve organized this into a model for high-voltage game operation that I’ve called the Live Games Trinity. The basic idea is: create a “content train” that delivers updates to your players regularly, and support it with events that encourage players to optimize around specific game mechanics over limited periods of time.
From Technologists to Artists
According to Unity, the number of artists on a team outnumber technologists by two-to-one and is trending towards five-to-one.
This is because we’re transitioning from the engineering era of game development to the creator era. These creators include traditional “artists” woh work in 2D and 3D visual media — as well as storytellers, designers and world-builders.
This carries critical business implications for anyone building a game today:
More and more people will be building market-competitive games and game features with no-code/low-code tools and off-the-shelf technology (the most evident example of this is the vanquishing of a huge amount of graphics programming due to the advantages of 3D Engines like Unity or Unreal).
Engineering teams can create the most value by working on the truly unique aspects of game feature design — things that introduce players to truly novel experiences.
Teams that maintain legacy technologies, whether an in-house 3D engine or a complicated live server platform — will be hamstrung competitively. They won’t keep up agility, faster time-to-market and capital efficiency of smaller, optimized teams.
Beyond the building of a game, live operations will depend on unblocking the artists so they participate in the pipeline without the friction introduced by brittle processes and extra technical steps.
Roblox: Revealing the Future
One of the precursors of the above trends is Roblox.
A lot of game developers today look at Roblox and don’t think it is for professional game development, despite the fact that there are now plenty of kids who have become self-made millionaires this way (compare to similar tales on YouTube). Pros look at the production values, the large financial take-rates and the creative constraints — and assume it isn’t for them.
Now, I’m not here to tell you to build your next game on Roblox. But I’m here to tell you that this type of game-making (and more broadly, the crafting of metaverse experiences) is the way of the future and you should pay attention to it.
What Roblox shows us is that when you integrate audience aggregation, a 3D engine and a low-code live development stack in one place — that it causes massive disruption. It democratizes game development. According to their S-1, Roblox has 7 million people actively building content.
It is also disruptive because it opens up opportunities to people who could never have made a game or realtime experience before. The tools and platform are extremely capital efficient, requiring almost no upfront investment.
Every game developer should assume that their competition will include individuals and teams with this level of simplicity, agility and capital efficiency. Those who don’t assume this do so at their peril. The best way to mitigate this risk is to make sure that are no artificial barriers or legacies that constrain your speed, creativity and agility.
The trends of solo-to-social, technologist-to-artist and games-to-economies are essential for every game developer to understand — not simply because they pose opportunities to build better games for the diverse communities of the metaverse — but because they also pose risks in terms of customer acquisition, agility and efficiency if ignored. I hope you’ve found it helpful.
If you see other trends or challenges I ought to include, I’d love to hear from you!
I’ve written a bunch of about game economies. You can read my three-part series of it starting with Game Economics Part 1, the Attention Economy.
Eric Seufert has written a lot about the shifting terrain around advertising-based customer acquisition. This article is a must-read: The Profound Unintended Consequence of ATT: Content Fortresses.
Creator economies develop through a fairly consistent pattern whether it is desktop publishing, websites, e-commerce, game-making or the metaverse. I covered that in Evolution of the Creator Economy.
If you’re hear to learn about the broader trends and technologies that will shape the next generation of the internet — the metaverse — a good starting point is Market Map of the Metaverse, which also spends some extra time on Unity, Unreal and Roblox, which ought to be of special interest to game developers.