The weight of UGC in the gaming industry
User generated content, or UGC, is content that has been created and posted by a user on any type of online platform, from social media and streaming platforms to video games.
More and more actors of the gaming industry have UGC-based strategies as it is becoming a popular and customisable business. For example, the game World of Minecraft where users can buy land within the game and construct their houses, even entire villages, forests and so forth. This type of gaming is spreading so much that these platforms are becoming the largest digital properties in the world. In the first quarter of 2021, Minecraft had gained $350 million just by selling add-ons and gadgets to its users for better and innovating game experience.
This trend changes the way advertisement is achieved and perceived which begs the question whether User Generated Content as a business model, is the future of the gaming industry is.
Video games, a new form of social media
Permitting the players to have a semblance of power on what their interface looks like and how they want to move forward within their online experience is not a new movement, even in the gaming industry. It exists since the 1980s, in the Mario games in form of “mods”, that stand for small for modifications.
At first, this small bequeathing of control to the users was not well received. Developers were afraid that gamers would change the game’s core too much and consequently, their vision of the game. It also meant that the developers’ job shifted from conceiving a world for users, to letting the gamers create their own world. Developers must now facilitate the users’ creativity within the game and let their imagination fabricate the rules and path they wish to follow.
This strategy is presently widely accepted. Indeed, some of the biggest online gaming actors have UGC-based strategies such as, but not limited to, Fortnite, Minecraft, the SIMS, etc.
The last decade has also seen new platforms emerging, also based on UGC like Roblox, where any user can create his or her own game. In addition, other users can play the games created by the others. This concept of exchange within a platform is why Roblox is referred to as “The Youtube of Gaming”. Meaning that whatever the user’s age or mood of the moment, they can search on the platform for a game they wish to play or create it if it doesn’t exist.
Last year alone, Roblox counted over 8 million game creators and had 42.1 million daily users, including 44% of female players, in no less than 150 countries around the world.
Hence, it is only normal to question how these games, entirely based on UGC, make ends meet.
The monetisation of UGC-based games
Generating money is possible because of the social aspect of UGC-based games. This whole business plan is based on engaging users and giving them the opportunity to share the content they create with others. It is a new offer to socialise and a new way to create communities with people from all around the world.
This initiative is better supported and reflected with UGC because people create their realities as well as a space that is entirely their own. It appeals to the creativity of the users and urges them to spend money to keep their digital world going and evolving.
Therefore, UGC expends the shelf life of games and provides a steady stream of engagement content. This benefits advertisers as users are invested for a longer time and dedicated because they are now personally empowered. Nevertheless, it also changes the way advertising is done.
A good study is the latest partnership between Roblox, previously stated gaming platform and Vans, a skateboarding brand. These two companies collaborated in order to launch an interactive skate park on Roblox called “Vans World”, with characters wearing Vans products and as such, embodying their brand. The world also enables the users to buy virtual Vans merchandising like sneakers, skates and various clothing items.
The physical world of fashion was slowly drifting to the digital world, nonetheless, this new strategy seeks to blur the line between the two worlds.
Around 99% of websites with a game guide uses advertisement as a way to monetise their content. In addition, users are more and more solicited to create content. As they become active in their game experience, the same is expected to happen with advertising. Users want to have a part in the advertisement they are shown and how the campaigns affect them. More brands take their merchandise within games to create interaction with the gaming communities and target younger audiences inside the space of their hobby.
It’s the case for Vans and likewise for more luxurious brands like Gucci. Two years ago, on Roblox, Gucci sold a virtual bag for $4,115 which is even more than the retail price, on their new online gaming platform. The latter generates items for players to experience with and in December 2021, a Gucci Garden was hosted on Roblox with interactive features and the possibility to shop for Gucci items.
The Italian luxury brand went beyond basic digital advertisement by interacting with video game players and turning them into customers for their products. Gucci adapted its marketing strategy to the gaming industry by using a UGC-based platform. Due in part to this innovative marketing campaign, the company’s revenues were up 20% in 2021.
It is not hard to speculate that these interactions between brands and users are more and more drifting towards a metaverse. As of now, there isn’t any cryptocurrency noted yet but who knows what the future might hold?
AAA-games will always have a market as they are anchored in the gaming world. Nevertheless, UGC-based games are stepping up and gaining in notoriety each day. Gaming is likely to be entering a new era where users follow specific players because of their UGC, just like the social media model, rather than following gaming development studios and their different titles.