Podcast Summary

The video game market is worth more than the movie and music industries combined, with over 3.5 billion people playing games globally each month. The industry is experiencing continuous growth, with new devices, games, and monetization strategies constantly emerging.

The distinction between "players" and "gamers" is important - players are those who casually play games a few times per week, while gamers are those who are more deeply invested, such as PC gamers or eSports competitors. Gaming offers a wide range of career opportunities beyond just programming, including marketing, sales, and brand roles.

Companies are increasingly using gaming platforms and virtual worlds like Roblox to engage consumers, particularly younger audiences, through branded experiences and advertising. The high level of attention and engagement from gamers makes this an attractive space for advertisers, though they must be careful to integrate their brand in a way that enhances the player experience. eSports and in-game tournaments also provide opportunities for brand sponsorships and activations.

Overall, the gaming industry represents a massive and growing opportunity that extends far beyond just game development, offering a wide range of marketing and business possibilities.

 

Transcript

These transcripts are auto-generated.

 

Announcer (00:01):
This time round, we are exploring the very real world of computer gaming.

Announcer (00:22):
This is the Cambridge Marketing Podcast.

Kiran Kapur (00:26):
Hello and welcome. This week we are in the exciting world of computer gaming and I'm delighted to welcome John-Paul Burke, head of Overwolf uk. John-Paul, welcome to the show. Could we start with a very simple definition of what computer gaming is?

John-Paul Burke (00:43):
Wow. Is there anything simple about that? It's such a diverse industry, essentially video games, if you consider them like interactive works of art, that people create a story with levels of gameplay within them to help players to lose themselves in a world that might be real or fictional, and with the ultimate goal of achieving the end point, or in some cases go on as long as you like Grand Theft Auto.

Kiran Kapur (01:15):
Okay. And I know from when we were talking earlier that you distinguish between those that are players and those that are gamers. So can we explore that distinction?

John-Paul Burke (01:28):
Yeah. For me, this is my own personal definition and I think there are some other people out there beginning to support it. Working in media for the last 21 years and now I'm working predominantly gaming. There are lots of companies out there that refer to everyone as gamers, and that's not to say that they're incorrect. I think there should be more distinction between the two of them. So for me, you have people that play games, like they'll play their Xbox or their PlayStation or a Nintendo Switch, and they might do that three times a week in the evening, either with friends or if you are a person of a certain age, maybe with your children as a way of just de-stressing or being part of a community if you are in something that Call of Duty six. So it's a way to do that, but I wouldn't say that you would identify predominantly as a gamer per se. Right. People that play Candy Crush are players. People that play Wordle are players. People that play chess on their mobile phones or on a device, they're players. I would say that a gamer is someone who either is a PC gamer because they invest very heavily in their equipment, so they're more professional, I would say. Someone that might take an eSports or people that have a YouTube channel that focuses on gaming, they for me are gamers. Everyone else is a player.

Kiran Kapur (02:53):
Thank you. So you've sort of talked about things like wordle and chess as being part of a video game, which I have to say I wouldn't naturally have put in there. So can you give me an idea of how big an industry, this is

John-Paul Burke (03:05):
The audience size, about 3.5 billion people globally that are playing video games per month. And then the split is about, I think 52% to 48% in favour of women. They're quite high consumers of it, and the average age of a player is 31 years old. And then if you talk about the size of the opportunity video games, the video game market is worth more than the movie industry and the music industry combined, which is fascinating.

Kiran Kapur (03:36):
Wow.

John-Paul Burke (03:37):
Most people wouldn't identify it as that, but actually it's such a huge opportunity and it's growing and growing and growing.

Kiran Kapur (03:44):
And is it definitely an industry where there is continual growth and it's not an industry that's starting to flatten off yet?

John-Paul Burke (03:50):
Oh, absolutely. It's continual growth. You can see how Microsoft has bought Activision, Bethesda, other gaming companies, and they're showing their consolidation into those companies. We're getting new devices all the time, so we'll just have PlayStation five and Xbox Series X released a couple of years ago and there'll be a new Xbox coming out I believe some point next year. The games are getting bigger and bigger and bigger and more open world. There is definitely, definitely more investment in it, and the opportunity within these gaming companies is so huge that you don't have to be a developer to work in. There are, as we're talking about here, marketing jobs, sales jobs, brand jobs. There's so much within every single part of that business that is accessible for people.

Kiran Kapur (04:40):
Yeah, it's interesting when you talk about it, one just assumes its programmers, but of course an industry that is so large is going to spawn a huge amount of other jobs and other requirements. So how has the marketplace changed over time?

John-Paul Burke (04:56):
Well, the gaming power has always been right. So back in the day when I was playing a Nintendo entertainment system and then upgraded to a Super Nintendo and further on, there were so many games in markets and the investment from advertisers was huge. The investment from the gaming companies themselves was huge, and that only grows larger because they know the return on that investment is massive, like a game pool of duty when it launches, it can easily make a billion dollars return on that kind of investment. But there is a heavy amount of investment that goes into the creation of that, a heavy investment that goes into the marketing of every single piece of it, and then you are trying to monetize it as it goes on as well. So gaming isn't just about that initial release. You've also got the downloadable content packs, which then people pay for.

(05:53):
There's micropayments in mobile gaming to say that gaming well is bigger than movies and music combined. Mobile gaming makes up half of that total revenue. So mobile gaming is a huge part of the amount of money that's being generated by gaming companies. So it's such a huge industry in terms of the first product that goes out, but then also the monetization showing ads within games as well, which is what I work within and my team. We're placing the right brands in front of the right audiences to get the right response. What I said before about creating a piece of art, that's what developers do when they make these games. They are an act of love and passion and they want the best product to go out. So when we are putting advertising within those elements, we want advertisers to match the quality of that. So we are very much top tier gaming as opposed to the lower funnel, what we call hyper casual games where people just play them for a minute and then forget about them.

Kiran Kapur (06:59):
So a hyper casual game would be something like Snake that I might play on my mobile phone.

John-Paul Burke (07:03):
So it hasn't cost you anything, it's free to play, but there's a value exchange that happens there if you haven't paid for the game, someone needs to pay for what's been created. So we show advertising within those elements at a hyper casual game, might have more advertising in it than a game where you've paid between 50 to 80 pounds to access that game because they're getting their return from the in-store price.

Kiran Kapur (07:30):
Can we talk a little bit about the different types of universes and the higher end of the gaming world where we're going to be putting advertising? So I've heard of Roblox, but I don't really know what it means. So can we talk through some of that?

John-Paul Burke (07:48):
Yeah, so Roblox, it is quite the phenomenon, but in effect what you have is you have universes, you have Multiverses, and then you have Metaverses. And just to start a long story short, the Metaverse doesn't exist and won't exist for about another five, 10 years if at all. But if we look at universes, if we take Halo as a franchise, that's a universe because everything within that game and the ecosystem within that game is all aligned to the master chief and the space exploration and the quest that they're on. Whereas with Roblox, it's a multiverse because players have the opportunity to operate in a world where they can pretty much do and create anything, whether it's dragons or making their own store. But the reason it's a multiverse is because aesthetically, graphically, everything still looks the same. It's still very square, very polygon based in terms of how it looks. So where a metaverse, if we looked at it from a Steven Spielberg ready player, one point of view would be all manner of games all interacting with each other with no limits. And that's why that can't exist at the moment. But for Roblox, yeah, they've done a great job. They've done a great job. I mean, I have my issues with some of the advertising that goes into it, but I think overall they create fun gameplay environments for children.

Kiran Kapur (09:20):
And companies are using Roblox, aren't they? I was reading that Ikea has got a coworker game launched last June, which allows you to see what it's like to work for Ikea, but within Roblox,

John-Paul Burke (09:30):
Yeah, they have great executions like that where players can kind of almost do that. I dunno if you ever heard of KidZania that was in Westfield shopping centre in West London before they had a whole system set where children could come to the shopping centre and do jobs like a radio presenter or a journalist or a firefighter or whatever that might be, and they can create a play in those jobs that they've got actual tasks to do. Same thing's happening in Roblox where you have children going in and it's ageing up increasingly, but predominantly you have children going in and exploring these virtual worlds and seeing what it's like to work in IKEA for the day and how fun it is. And the good thing about that is it's about building brand affinity with people when they're young. So there's the kind of big story about how Mercedes doesn't just take the last time you clicked on an ad to build attribution to that ad.

(10:29):
Mercedes is advertising to you from when you're four years old by you having posters of a car on your wall or your friend's dad turning up and you getting into a luxury car to go to training or whatever that might be. Mercedes understands that attribution begins very early on. So by the time you get to 20 years old, then you want to buy a Mercedes. It's already ingrained in you. And then to do this with brands in those kids space as well is it just builds really strong brand affinity with stores like Ikea where children then may want to go to that store and influence their parents to go to that store because they've seen products in that virtual space that they like and they might be like, I love that for my room and this table does this and those lights have four different settings on them and I want my computer desk to look like this. So it's a really good way of what I used to call when I worked for a kid's website myself is ambient advertising. You're not saying to them click here, do this and go there. You're saying spend time in this environment, interact with what you want to interact with. It will respond to you if it responds. And that way it's a much gentler way to introduce brands to children.

Kiran Kapur (11:45):
That's really interesting. And then the other type of, I think the other word you used was universe, wasn't it like an open world? And that's where advertisers can also get involved but in a different way, if I've understood that correctly.

John-Paul Burke (12:01):
Yeah, it depends on the game that you are looking to target. So if you are a brand and you want to communicate with an audience, let's say for Over Wolf, we're looking at 1834 adults, you can simply run, and I don't want to get too deep into this, I dunno how much your listeners know about the advertising space, but you can run what are called display advertising spaces. So if you were to imagine a website and at the top of a website you would have what's called a banner, and that banner runs across the top and then down the side you would have a skyscraper, and then you might have a square shake that sits in the middle of a website that's called an MPU, which debatable about what it's actually means, but let's say a mid page unit. Some people call it a multiplayer unit, something like that.

(12:53):
Effectively we can do that very same thing, but in front of big games like Fortnite, call of Duty, six League of Legends, Roblox, Minecraft. Depending on the audience that you're trying to target, we can show them advertising in apps that creators with oul apps can build and enhance a player's gameplay. So to rewind on that slightly, OUL is a technology company that allows creators to build apps where players, let's say playing Fortnite can have an additional help where the app opens up the game players as normal, but they have stats down the right hand side that say your headshot is 2% off or your shot is increasing or your teammates aren't performing as well. You need to step in and it can give coaching tips to make players better. Now within that space, we can show advertising because our audience trusts us to link those games and their experience to the right advertiser.

(13:54):
Now, when you are running advertising and gaming, you have to respect the player first because as I kind of always say from my time in gaming, if we lose the player, we lose the business. Fundamentally, what we do is to support our creators over Wolf North Star as a business is to generate a billion dollars for the creators that make the apps. We want to give more money back to people for the work they do to get players in. So when we show advertising, they make 70% of that revenue themselves from the ads that we show to them. So we've got this creator economy that we're generating and by showing ads, the players that we have know that we are focused on the creators, that it's not just about us. So they give us, they kind of allow us the ability to show them ads in front of this.

(14:44):
What we can also do is more in-game activation type things for let's say Call of Duty if I don't want to sound too graphic about it, but let's say you are working with KFC and you are playing and you've signed up to play in a tournament where KFC has sponsored it and you hit someone with a headshot and it's a real clean headshot. We might say Gigi plus 10 points towards a zinger berg at your local KFC and motivate them to play more so that they can get free meals or they can win once in a lifetime trip somewhere. There's so much that we can build within this working with brands and advertisers that is beyond simply showing an ad to someone.

Kiran Kapur (15:26):
So this is less ambient advertising and more actual, as you said, display advertising, so it's obviously advertising.

John-Paul Burke (15:33):
Absolutely, absolutely. So the reason we do it that way is because if you were to work with one of the big games and you wanted to put your brand within that game, I don't want to speak for Activision here, but it's just an example. If you wanted to put your brand within Call of Duty six, it would cost you seven figures to do that and you'd have to have about a year's worth of planning. Whereas we worked with Monster Energy I believe last year, and they wanted to be in a recent launch of the last iteration of Call of Duty, and we had that in there within 46 days because we knew how to get it live in the game authentically so that the players knew what was coming in. We ran a competition for them to win a whole PC setup that was worth extortion amounts of money, but it was a way that the brand didn't have to spend over a million dollars to access. So we're kind of making it more cost effective to work with us to access these big titles and still reach the same audience as you would if you are within the game.

Kiran Kapur (16:40):
But it's also, you're sort of indicating the sheer amounts of money that advertisers can spend just to get within a game

John-Paul Burke (16:47):
Easily millions of dollars a year go into it. I mean, if you look even at Unilever and p and g, how much they spend in the gaming space, what I'm trying to communicate to people as well is the fact that the players are within an audience profile. They are 1830 fours in our space, the attention that we have. So we do things called attention scores where we work with companies like Adelaide to get those attention scores. The attention that Overwolf has is greater than Twitch, it's greater than Instagram and TikTok and other social media platforms. The only thing that has greater attention at the moment would be podcasts and let's say YouTube and tv. So we are winning that attention game. We have greater engagement because our players when they play are in a flow state where they're not distracted by what's around them. They're focused on the screen. Because when you are playing a game like Call of Duty or whether that be Fortnight or even you are racing in let's say need to speed, you cannot take your eye off that screen because if you do, that's how you lose. So when we can communicate with them in a way that they understand and appreciate, we don't detract from the gameplay. We're offering it as a way to enhance that moment for them.

Kiran Kapur (18:03):
Yes. You mentioned Unilever. I was really interested, I was on the Unilever website earlier and they're talking about tripling their investment in gaming and saying that Gen Z spend more time gaming than watching tv. And then the bit that got me was that 70% of gamers are actively interested in personal care products. So it's worth Unilever's while getting those products within the game.

John-Paul Burke (18:25):
Well, yeah, it's someone in the head of AOPs at Overworld, a lady called Taylor Kelly. She said to me, they walk among us. Everyone thinks that these players are different, but they're not because it's 3.5 billion people globally and we can address a hundred million of them globally. You really can talk to all of them. There's research that shows that they're very interested in sports away. People that play sports games are also playing sports in real life. The interests that they have are the same as anyone else. It's almost sometimes confuses me that people think, oh yeah, we'll advertise in football, but we wouldn't advertise in gaming. Well, why would you think that a football tournament has better ROI for you than people that are actually in market able to buy and in gaming have high disposable income? The investment that they make on their PC setups with our audience is huge.

Kiran Kapur (19:32):
I was reading also earlier that, I mean I wanted to come on to eSports a little bit, but for Jen's said and Jen Alpha, that is the equivalent of, it's the same as going to a game. You watch an eSport game, it's as equally immersive. It's equally interesting. So as you say, why would that be any different from marketing to football or sponsoring football or sponsoring eSports? Yeah, I was just going to ask a little bit more about eSports and how that works. Sometimes you can drop, as I understand it, you can drop a competitive element within a game and companies sometimes sponsor those in order to enhance the advertising

John-Paul Burke (20:11):
Bang on. That is the sort of thing that we can do with Oul, and I'm not here to sell Oul, I'm just giving the context. If you wanted to engage an audience and build brand affinity with them, which is really what you want to do in this modern age is build a relationship with your audience so that they respect you because you've respected their time. Then doing things like tournaments like that is a really good way of doing it because then you can have leaderboards, people wouldn, see how well they're performing with the over Wolf apps. We can tell them how they can improve their game. So there's a way that we can help them to become better and hopefully achieve that kind of top prize. So yet those kind of tournaments are very important for players. But when you talk about eSports, that is a whole other level of involvement and the player skill is incredible. It's just fascinating because the attention that these guys have, the quick response is the thought process, the awareness there is so much that goes into players that people don't recognise. The cognitive speed is just wonderful

Kiran Kapur (21:20):
And companies are getting in by sponsoring the teams, but also sponsoring the eSports themselves. I was noticing some of the main America's Cup, for example, actually had an E-Series that went alongside it. So there is a real understanding from companies that you do need to pull the video gaming side alongside the sort of physical and in-person side.

John-Paul Burke (21:43):
Well, and you've also got Formula One teams who train their drivers on a video game setup because the realism of the game can help them to shave milliseconds off their times on a track where they can just practise, practise, practise. The applications of this are huge, and especially as it gets better, more and more sports teams will use this to hone their skills, especially things like golf, et cetera. It just makes sense. But may I say just on the advertising bit for a second that there is a right way and a wrong way to do it. So what we want to do is we want to respect the player, we want to market to them in the right way, that we're not forcing our agenda on theirs. In this space, you get more when you give more. So you want to build brand affinity, you want to be consistent with people because that consistency builds trust.

(22:41):
There's a kind of example that I always say to people about how not to do it, but in a sense of everything was written correctly. So when Meta at the time Facebook bought the company Oculus, which is now the Meta Quest, they ran a two minute commercial in the latest version of NBA 2K, right? So you've got the right audience. People with disposable income, they've just spent $80 on a game, so they have the money to buy a tech and enjoy it. They're already playing video games and it's a top quality game that's just been released, right? So you would think a two minute ad in between play. So in between the kind of periods of a basketball match, they showed the Oculus wrist ad, it was unskipable, and the response that they got was unbelievably bad. The communities which you have to deal with in gaming turned against them and were saying, I never want to see this again.

(23:43):
I don't think I'll ever buy an NBA game again, an NBA 2K game again, how dare you, I paid $80 for this. Why did you do this? I didn't ask for this. You've already taken my money and now you're using my data. Things like that. They're the things that can go against you. Now, what I believe they could have done is Facebook could have invested their money into creating a new court for someone to play on that was sponsored. So it could have had Meta Quest on the court. You could have created new sneakers that gave you a 10 cent boost when you are playing with the meta team or something like that. It could give you access to legacy players like Michael Jordan or someone's have in your team. You could have shirts with Oculus Rift on it so that people would know that you've completed certain challenges and that you were great at the game.

(24:30):
There are a number of ways that you can add value to the player without making them watch something or making them click somewhere and go away from the thing that they came here to do. And then if you add that value within the game and you use your other marketing efforts to drive back into there to say, you saw us in NB 2K, now come and play it for real at your local Oculus store, whatever that might be. And that way you'll have a much better response from the audience who will have got the value. They're not kind of numb to what advertisers are trying to do. Everyone now is aware of how they're being monetized. So you can either go in and say, look, we want to communicate to you, but in doing that, we're going to invest 2 million into this game and that $2 million doesn't just go into 2K games pocket, that $2 million, yes, there's some profit, but a lot of it goes into getting new developers, developing new parts of the game, expanding the game, so it's reinvested into the kind of happiness of the player because then the player will in turn spend more money in micropayments in the store, buying a new kit, buying new players.

(25:47):
So there's an ecosystem to respect there as well. And that's why when Marxs are going into this, sometimes they're a bit daunted about how should they approach video gaming. Fundamentally have a goal in what you want to achieve and reach out to a company that works in video games and just brief them, give them a solid brief, say, we want to speak to 18 to 34 year olds. We want 'em to go and buy this product. These are the formats that we've got. We'd love to hear something kind of more intuitive and more interactive for the community and then get the feedback. And the great thing about video games is you can always download it. You can always invest in buying it and test it for yourself to make sure it's the right environment. There's lots of things that you can do, but buying gaming is no different than buying any other media, whether it's TV or digital or out of home or connected tv. It's all bought the same way.

Kiran Kapur (26:39):
That's absolutely great. Thank you. Before we finish, I do want to ask how you got into this industry. I can imagine people are listening and go thinking, wow, this sounds like a really great job and really a great industry to work in. So how did you get to where you are?

John-Paul Burke (26:55):
I've always had an interest in it. So I used to work for one of the global media agencies called Mindshare, and I remember a company called IGN coming in one day and they were presenting to us, this was back in 2005, they were presenting having billboards in a game called Burnout Paradise. And I used to love playing burnout. Burnout three takedown, if you haven't played it, it's phenomenal game. And I was like, wow. So they're going to run ads. I was working on Nestle and IBM at the time, and they're going to run ads in this game. How amazing is that? And then a couple of years later, there was a chap called Mike Crosby, who unfortunately has passed away. He's an amazing madd. He had created a three-dimensional virtual world for kids called Ben Weevils. And it was based on a Nickelodeon show that they had made that was hugely popular on Nickelodeon, and they kind of ported it over to being a three-dimensional world.

(27:53):
And Mike was just fantastic. He loved creativity. And he would often say to me, well, in my interview, he said, imagine I'm Sky. How would you advertise me in this area? So I would just describe without knowing anything and did it. And he said, unless the Pope walks in with a million pounds, the job's yours, and I loved it. You could be as creative as you wanted to in the gaming space because we built the game. There was nothing we couldn't really achieve within the framework that we had. So when we spoke to brands at first they were like, what are you doing? And this was in 2010, and I'd have to say it's three dimensional virtual worlds for kids, effectively, real avatars and real players interacting with your brand in real time. And you can go on there now and you can see them moving around this area that you built, which fascinated them.

(28:41):
And that's what led us to win Fall BAFTAs for our website as Best Kids Website because we always put the player first and the safety of that player first and then many years later. So I went back to agencies after that. I spent five years there, went back to agencies and then another company, game Loft used to come in and see me. I was planning a buyer for 25 toys and games clients across TV and digital, and it was Game Loft. And I'd been playing game Loft games since 2005. So I knew their product really well. Once I showed my passion to them about what I loved about their games, I then went on to become managing director for UK Island and Nordics, and then again going and taking mobile gaming to market to brands to get them into that space. And I've just loved, loved the industry that whole time.

(29:32):
To be that creative in those spaces and really take a brand and just think what's the biggest thing we could think of? And you boil it down to, let's say budget or timings or whatever, but you should always think as big as possible. And then after that, I have been running my own business for five years working in digital advertising. And then recently I was speaking with Overwolf. The reason I left gaming for five years was there wasn't anything in this industry that excited me as much as Gameloft did and as Bin Weils did until Oul came along. And to have the ability to advertise in top tier games and be creative about how you can interact with the players, again, with putting them first and putting their needs first and asking them if we're allowed to show them advertising and them responding well, just excited me so much that I joined the business and now I'm heading up the UK for them.

Kiran Kapur (30:30):
That's brilliant. And you said throughout that you enjoyed games, but would you say that somebody had to be a gamer in order to be able to work in this? Or is it sufficient to be a player and have some idea?

John-Paul Burke (30:44):
No. One of my old bosses at Gamelot, he had worked. So Gamelot was Ubisoft before, and then there was owned by Five Brothers, and one of the brothers created Game Loft. And my old boss, a fantastic guy called Anol, he had been there from the start and he was self-professed. He'd never play his games, but he was such a good project manager that he knew how to get things done. He knew how to make sure that everything was in the right place. He knew how to get salespeople motivated. You should focus on what you are good at and apply that because that's what will help the industry. And if you can understand what the audience is doing, then even better. But I wouldn't say it's a prerequisite to entering this market because yeah, if you are good at marketing or you're a great coder or voiceover artist or whatever that might be, the opportunity exists for you within gaming, and you should reach out and show real passion because passion will get you far coming in and saying, what would you like me to do?

(31:48):
Who wants a coffee? Who wants this? And just being on hand and listening will take you extremely far in any industry that you focus on. I would say gaming just has such a special place because in the next couple of years we will see a transformation where retail media becomes sort of phrase coined by a company called Scte, which was G Commerce, which is gaming commerce, which I reckon will in the next four years will be both a trillion dollars globally. People will still be shopping in the games and buying products outside of there, but that is potentially a whole other podcast about taking screen wear to streetwear all three, one click of a button.

Kiran Kapur (32:29):
John Paul Burke, head of Overwolf uk. Thank you so much for your time and your insight there. I found that absolutely fascinating and mind blowing. I had no idea it quite such a large industry and quite the number of areas of the industry as well. So thank you very much indeed.

Announcer (32:45):
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