A new report by MIDiA Research underlines the opportunities for the music industry within gaming.
The subject came under discussion at last month’s Music Week Tech Summit on a panel featuring Roblox, Warner Music and UTA.
The report in partnership with Twitch, Music & Gaming: A New Way To Play, shows that games revenue was almost four times the size of the global music industry last year.
While the music industry has traditionally generated income from gaming syncs, there are now huge opportunities from in-game monetisation, such as Roblox and Fortnite virtual merch, as well as collectibles. Of the gaming industry’s £138 billion valuation, 68% is based on in-game monetisation.
“The real challenge for the music industry will?be to reimagine and expand the way it currently participates in the gaming opportunity, building above and beyond sync and standard licensing,” stated the report. “Music experiences in games have also too often been focused on marketing and promotion, for driving streams and ticket sales. To realise the full potential, music needs to become part of the game experience itself and thus tap audience demand and unlock in-game spending, which is where the real money lies.
“The time is right to explore deals and strategies that are designed to be more native to gameplay environments, whether it be revenue share on in-game items, or ‘renting out digital real estate’ for a digital festival, with the right to sell items inside the virtual festival environment. If the music industry wants to truly capitalise on the gaming opportunity, it needs to become a part of it, not just settle for supplying it.”
The time is right to explore deals and strategies that are designed to be more native to gameplay environments
According to MIDiA Research, dedicated gamers spend 10.8 hours a week gaming and 7.6 hours streaming music – more than double the average consumption of music (3.6 hours) for all consumers. It’s also above the 6.9 hours for music subscribers.
The study also found that 20% of gamers (versus 8% consumers overall) buy music merchandise. MIDiA suggested that gamers are “highly acclimatised to the fandom monetisation models prevalent in the games economy, from in-game purchases for cosmetic items, through to tipping games streamers”.
MIDiA’s global consumer data reveals that 10% of consumers watch ‘games-related videos every month’, but this rises to 18% among music streaming subscribers.
During the pandemic, the livestream business has boomed with revenue reaching $0.6 billion last year. As well as ticket sales, artists have also made income from virtual goods, donations and badges from concerts within gaming platforms.
The report includes a case study on Mxmtoon and how she has monetised Twitch performances.
Mark Mulligan, managing director at MIDiA Research, said: “For many, livestreaming started out as a solution towards creating a live experience between artists and fans in the midst of the pandemic. However, its rising popularity as well as growing opportunity calls for the music industry to take a page out of the games industry and understand that digital intimacy is the key to opening the box to monetising fandom.
“The benefits can be multiplied when they are taken to music fans who are also gamers, audiences that will most quickly understand and translate the concepts of digital fandom across to music.”