Major Games Publishers Are Feeling The Impact Of Peaking Attention

Just last week (February 5th) Electronic Arts (EA) reported disappointing quarterly results, now Activision has laid off nearly 800 staff, mostly in marketing and sales.

As MIDiA has reported multiple times before, engagement has declined throughout the sector, suggesting that the attention economy has peaked. Consumers simply do not have any more free time to allocate to new attention seeking digital entertainment propositions, which means they have to start prioritising between them.

This downward trend in engagement has persisted for a while now, and the latest quarterly results from some major games publishers confirm that a revenue slowdown will ultimately follow consumer behaviour. Arguably sooner than most of the games industry would have thought.

Causes of the Slowdown Go Way Beyond Just Fortnite
Publishers will be quick to blame declining engagement and revenues on Fortnite. While the title indeed intensified the manifestation of the peak attention economy dynamics among gamers, the coming slowdown is part of a much bigger challenge – how to capture attention in an increasingly attention-scarce landscape.

Gamer Behaviour Penetration, Q4 2018, US, UK, Canada, Australia

Fortnite-esports-gamesvideos

 

Top publishers are facing several headwinds at the same time. Fortnite is only one of them, and arguably one of the less harmful ones to the long-term outlook of the games industry:

  • Fortnite’s model utilises the attention economy dynamics: It’s a high-grade gaming experience and it’s free to play, which means there is little barrier for consumers to allocate attention to, compare to its paid counterparts. While it has undoubtedly cannibalised some revenue and engagement from other major publishers, Fortnite engagement still contributes to the bottom line of the global games industry.
  • More gamers engage with games videos and events than Fortnite: Not only is engagement declining across mobile, PC and console gaming, at the same time, video is winning the race against gaming in capturing attention on multipurpose devices such as PC. Between Q1 and Q4 2018, gaming on PC declined faster than TV show viewing on PC among gamers. While all eyes are on Fortnite, the advent of games-related video content and e-sports is arguably just as, or more culpable, for the ongoing slowdown. 31% of console gamers watch games-related videos (monthly), compared to just 5% of console gamers playing Fortnite weekly. Furthermore, e-sports attendance captures about the same audience as Fortnite’s weekly active users.
  • Focusing too much on competing against Fortnite is short-sighted: In traditionally siloed industries, companies typically tend to focus on successful competitors in their market. The games industry needs to wake up to the fact that its competition is currently sitting across entertainment formats and that competitive powers within gaming may not be the most important drivers of engagement and revenue slowdown. Unfortunately, publishers have so far mostly blamed competition within their own industry (Fortnite, RDR2 in large part). This in turn has led to several releases of Fortnite lookalikes, be it in form of mini-games of established franchises like GTA, or fully-fledged titles such as EA’s Apex. However, not much has happened in games companies competing for attention across entertainment formats yet.

To make matters even more urgent, it is getting harder to target gamers via traditional advertising techniques, because an increasing number of consumers spend more of their digital days behind paywalls, where there is often no advertising. These are also typically the most engaged and most-spending audiences. To win some of the attention back, games companies must target gamers behind paywalls, be it through product placement or original content on video streaming services or podcasts and playlists on music services.

While publishers battle it out among themselves, external propositions like video streaming, digital news, podcasts, music, social media and e-commerce keep eating away at consumers’ attention, and will likely dilute games engagement (and revenues) further.

The time for games companies to understand and focus on competing in the attention economy across all entertainment formats (rather than just with other games) is now.

If you’d like to learn more about the attention economy and ‘Making Free Pay’, make sure to register to our free event in London on the 27th March. 

 


Tagged in: Activision Results, Activision Staff, Attention Economy, Ea Results, Fortnite, Games Industry, Gaming, Peak Attention

50 thoughts on “Major Games Publishers Are Feeling The Impact Of Peaking Attention”

  1. Trump news has over saturated people with media as well. I think at least for Americans, media burn out is playing a big role. I find myself craving anything but a screen.

  2. Avatar Liliana says:

    These companies cater to the necessity of the groups and might possibly arrived at prepare a game within your party if you prefer.

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