The entertainment industry is often viewed through the lens of Hollywood blockbusters and streaming giants. Yet, a colossus quietly dominates in revenue and innovation: gaming. Outpacing movies, music, and books combined, the gaming industry is not just entertainment; it’s an economic engine. For businesses seeking to navigate disruption and understand future consumer trends, the gaming world offers a wealth of strategic lessons. In a recent interview, Ian Bateman, CEO of cloud gaming startup High Score, shared key insights into this often-misunderstood market.
Here are five critical takeaways about the gaming businesses:
1. Content is King, Ecosystem is Queen.
Google’s failed Stadia venture provides a stark reminder: technology alone isn’t enough. Despite Google’s infrastructure and resources, Stadia faltered due to a critical lack of compelling content. As Ian noted, “ultimately Stadia’s failure boils down to games… in gaming at the end of the day it’s all about the games.” Stadia’s limited game library and the difficulty of porting titles to its platform created a content desert.
The Lesson: In gaming, content is paramount. A robust and constantly refreshed content ecosystem is crucial for user engagement and long-term success. Focus on content acquisition and curation as much as – technological innovation.
2. Compatibility Trumps Proprietary Systems.
Stadia’s closed ecosystem, requiring games to be specifically ported to its platform, proved to be a major impediment. In contrast, High Score is leveraging the vast existing library of Windows-compatible PC games, accessible through platforms like Steam. This approach immediately offers users a massive content catalog without relying on developers to create new, platform-specific versions.
The Lesson: Prioritize compatibility and interoperability. In fragmented markets, offering seamless access to existing content and platforms can be a powerful competitive advantage. Avoid walled gardens that limit user choice and content availability.
3. Democratization Drives Innovation.
The gaming industry is experiencing a indie game boom, fueled by increasingly accessible game engines like Unity and Unreal Engine. These tools empower smaller teams and individual developers to create high-quality games, fostering innovation and experimentation outside the confines of large studios. This mirrors trends in other industries, where democratization of technology empowers smaller players to disrupt established markets.
The Lesson: Embrace and leverage democratizing technologies. Lower barriers to entry foster innovation and create new opportunities for smaller, agile players to compete and disrupt established giants. Look for ways to empower individual creators and smaller teams within your own industry.
4. Ride the Right Platform Wave.
The PC gaming market, while massive, is heavily Windows-centric. This creates a significant accessibility gap for users of macOS and ChromeOS. High Score is directly addressing this by offering cloud-based Windows gaming PCs, effectively bridging the compatibility gap and unlocking the vast PC game library for a wider audience.
The Lesson: Identify and capitalize on dominant platforms. Understanding platform dynamics and addressing accessibility gaps can unlock significant market opportunities. Look for ways to leverage existing infrastructure and ecosystems rather than always building from scratch.
5. Gaming is the New Media Frontier.
Major media and tech companies, including Netflix, YouTube, and LinkedIn, are increasingly investing in gaming. This isn’t simply a fleeting trend; it’s a recognition of gaming’s immense market size and its evolving role as a primary form of entertainment and social interaction. Gaming is no longer a niche; it’s becoming central to the digital media landscape.
The Lesson: Recognize the growing importance of interactive entertainment. Gaming is not just for gamers; it’s shaping the future of media consumption and user engagement. Explore opportunities to integrate game-like elements, interactive experiences, and gamified strategies into your own business to capture attention and drive engagement.
Nataraj is a Senior Product Manager at Microsoft Azure and the Author at Startup Project, featuring insights about building the next generation of enterprise technology products & businesses.
Listen to the latest insights from leaders building the next generation products on Spotify, Apple, Substack and YouTube.