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Gamers at Japan's First Dedicated e-Sports gaming Hotel

Innovation

Fantasy world of gaming is facing hard realities

Published 5 March 2021 in Innovation • 10 min read

During lockdown, families have turned to PlayStation, Xbox and Twitch in ever increasing numbers. That’s good for business, but there is a social cost and the regulators are circling, reports Öykü Işık.

The gaming industry is facing a day of reckoning. After a watershed year of growth since the pandemic hit, driven by new players seeking sanctuary in fantasy worlds from the upheaval in real life, now comes the sobering reality of managing massive communities of players who are using games for far more than mere entertainment: they are becoming platforms for political action and social justice.

There are also real concerns over ethical issues that dog the industry. For game makers such as Nintendo, Electronic Arts and Ubisoft, this presents management and leadership challenges. In a fiercely competitive market with low barriers to entry, the main impediment to growth has been the need to keep refreshing best-selling games to retain old users and attract new ones. The greatest challenge now is growth management. Gaming surged in popularity under COVID-19 lockdowns, a rare bright spot amid the chaos of 2020. Global revenues grew 20% to $179.7bn, according to IDC, making gaming bigger than the movie and music industries combined. The pandemic cemented the industry’s cultural legitimacy, putting gaming on a par with Netflix and Hollywood.

The boom was well underway before COVID-19 struck, but it has been turbocharged by the crisis.

Many games raked in record player numbers. Online retailer Steam has continually broken records for concurrent players, with nearly 23 million clocked in by mid-December. Twitch, the streaming platform for gamers owned by Amazon, has seen its average viewership more than double to 2.9 million by January 2021.

The success reflects the social allure of gaming, which became a way of socializing without breaking lockdown rules. Even when lockdowns were lifted, user numbers held up, supported by the launch of new PlayStation and Xbox consoles, which sold out almost immediately.

Even in our homes, we have seen changing habits in gamers. In an IMD survey we found that more than half (52%) of adult respondents had increased the amount of time spent gaming over the past year. Perhaps more significantly for the longevity of the sector, a third of the more than 200 respondents reported that children under 12 in their household had started playing games only after the pandemic hit, while the figure was 18% for adolescents (12-18 years). The evolution of the frequency and type of gaming also follows a similar pattern: about half of the adults and roughly a third of teenagers and younger children reported playing a wider a variety of games, more often and for longer.

However, even as coronavirus restrictions dramatically expanded the reach of games, they also sowed the seeds for current problems. For instance, the addictive nature of gaming has been widely explored in clinical studies, and findings have placed the industry under scrutiny for a while now. In 2019, the World Health Organization officially recognized “gaming disorder” as a mental health condition in which people play persistently despite negative consequences for their relationships, social lives and careers. The addiction issue rose to the fore during the pandemic when, in just one week, two popular Twitch streamers apparently took their own lives after being open about struggling with depression. This has led to debates around what social and ethical responsibilities rest with gaming companies. More than 70% of respondents to our survey believe these platforms should take responsibility for any extreme or problematic usage of their products.

Companies have diverted the message somewhat by promoting the positive aspect of their platforms: far from just a way to kill time, games can serve as “medicine” to be prescribed for children with ADHD, or a means to make learning topics such as mathematics more entertaining.

This is not enough to entirely reframe the impression of an industry which has long been associated with “wasting time”. As regulators discuss imposing new rules on games makers, these organizations are having to develop expertise in preventing not only ethical breaches in providing a platform for sexism, bullying or addiction, but also privacy violations. Here, public perception matters: more than two thirds (69%) of respondents to our survey said gaming companies had an ethical responsibility when it came to equal representation of gender, ethnicity and sexual preference.

Gaming platforms are also contending with their new role as a forum for political discussions: Blizzard triggered outrage after it sanctioned a pro player in its Hearthstone game for speaking out over the Hong Kong protests. The games company was forced to apologize, highlighting the challenges developers face as their platforms evolve into public forums for heated debate on emotionally charged issues.

As the gaming community grows, so does the desire to express political opinions. For instance, users on a number of games from Animal Crossing to Grand Theft Auto organized virtual #BlackLivesMatter protests against racial injustice. The pressure on gaming companies to manage these events fairly has increased critically. Clearly, alongside managing their growing businesses, developers are now having to contend with a heightened moral and social responsibility. These very public protests have forced the industry to examine its internal makeup, addressing concerns over low representation of minorities and women in games and also in the sector’s workforce. The fallout from the #MeToo movement hit gaming hard, with Ubisoft replacing three top executives over alleged sexual harassment and bullying.

This underscores problems that the industry has struggled with; in June, some 70 mostly female gamers raised allegations of gender discrimination, harassment and sexual assault.

The pandemic may well serve as a catalyst for the acceleration of progress on this front. It is crucial that game designers reflect the diversity of players in order to create games with broad appeal. Research suggests that African Americans, Latinx and Asians are more active than white gamers, yet Caucasians account for 68% of game developers globally.

That intensified an ongoing discussion about the ethical design of games. Especially controversial are “dark patterns”, or design features used to trick users into doing things they may not want to, such as buying in-game items or paying money to bypass a difficult level of a game.

Such issues have led industry professionals and academics to set up a collaborative group to codify and improve ethics in games. The initiative, Ethical Games, has put together rough guidelines for game design, including the removal of dark patterns and increasing inclusivity and accessibility for all players regardless of their ethnicity, religion, sexuality or gender. Yet for all the discussion about gaming’s ethics, it is technology that presents the most immediate financial challenge. There have been privacy violations such as the massive Capcom data breach, with the Japanese game maker behind Resident Evil and Street Fighter admitting hackers stole data on as many as 350,000 players. Gamers have become prime targets for hackers because of the growth of the industry, with the attacks across all economic sectors increasing significantly after the pandemic started.

But gaming is among the industries worst hit: according to cybersecurity company Akamai, there were 3,072 DDoS attacks (that involve overwhelming an internet server with high volumes of traffic) in games between July 2019 and June 2020. Games companies also suffered 10 billion credential-stuffing attacks during the same period (this is where hackers try to gain access to accounts using lists of usernames and passwords, typically purchased on the dark web).

The growing demand during the pandemic has led many gaming companies to expand their architecture and consume more public cloud services, increasing their overall vulnerability to cyber-attacks. Amid this chaos, gaming companies should not forget that there is more to cybersecurity than defending the game infrastructure or applications. They now have the responsibility to inform their customer base when it comes to defining what secure behavior entails in this context, and setting the expectations.

Educating players, who come from all walks of life and have all levels of tech-savviness, is more critical than ever.

In the big league: the new breed of soccer star who never leaves the sofa

The FIFA series (produced by EA Sports) is one of the most successful sports games ever, and among one of the largest franchises of any kind: it has sold more than 280 million copies. But eSports (video game competitions) is helping FIFA reach new audiences and further democratize football. This includes the FIFAe Club World Cup, where 42 teams compete virtually for hundreds of thousands of dollars in prize money. The man running this important revenue stream at FIFA is Christian Volk, Director of eFootball and Gaming. Öykü Işık spoke to him about how he’s building a bottom-up ecosystem of content producers to drive fan engagement, and about the role of gaming in tackling social inequality.

Has gaming now become mass market entertainment just like Netflix?

In terms of absolute output, gaming at large is already bigger than Netflix because of all the content that is surfacing on streaming channels like Twitch, YouTube and Facebook. Video games seem to be more of a competitor to them than other streaming services.

How are you scaling to cope with the surge in popularity of FIFA tournaments?

We are streamlining processes and allocating resources, human and financial, to ensure that we can embrace this next stage of growth. We are also on boarding stakeholders globally to build a stronger foundation for the future ecosystem. Regionalizing competitions to ensure the best experience for all participants everywhere has been very important for us.

How do you keep players engaged after the pandemic ends?
We are onboarding a lot of our 211 Member Associations and Leagues, which are best suited to activate their local FIFA community and build meaningful engagement locally. To make football truly global we need to ensure equal access while also growing the global footprint and appeal of the FIFAe top-flight tournaments.

What has the most challenging part of the
pandemic been for you?

Managing myself and the energy of the team;
recognising that it’s a marathon, not a sprint. At the start of the pandemic, everybody was full of adrenaline to get through this. But after a while, people wonder, when is this going to end?

What challenges do you face in putting out regular fresh content?

Player tutorials are growing strongly. That is a content form itself. There are so many influencers and content producers out there: it’s a rich ecosystem. For example, we recently recruited six community reporters in different regions to produce localized content for the final stage of the FIFAe Club World Cup. In addition, we are providing the stage for players to create their own content.

There is a perception that gaming is just for men. What are you doing to improve the diversity of gamers?

I would disagree. In Asia and China, especially, women feature much more prominently in the overall gaming scene and I can see that accelerating across the world. Gaming is well positioned to play a very important role in moving [the diversity agenda] forward, because eSports competitions are non-discriminatory as no one is defined by their physicality.

What can other sectors learn from gaming’s response to COVID-19?

It’s very important to find the right balance between agility and stability. If you’re not agile enough, you’re missing out on big trends and opportunities. And if you’re just experimenting all the time, you’re not stable enough to scale the business

Authors

Oyku Isik IMD

Öykü Işık

Professor of Digital Strategy and Cybersecurity at IMD

Öykü is Professor of Digital Strategy and Cybersecurity at IMD. Her research focuses on digital resilience and the ways in which disruptive technologies challenge our society and organizations.

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