“Someone has to do something!” – Winston Overwatch
What if I told you video gaming has the potential to be even more popular than it already is?
This month I am plugging Ranken Jordan Pediatric Hospital. To donate, please visit https://rankenjordanfoundation.org/donate/
SOURCES:
https://www.g2a.com/news/features/gaming-by-the-numbers-how-many-people-play-video-games-worldwide
https://www.vice.com/en/article/us-gamers-arent-buying-video-games-anymore-new-study-reveals/
https://www.thegamer.com/marvel-rivals-players-hate-its-ads-now
PICTURE SOURCES:
https://archive.org/details/Nintendo-Power-Magazine-The-SNES-Era-1991-1996
https://collection.sciencemuseumgroup.org.uk/objects/co8094261/nintendo-famicom-games-console
The Marketing Gateway is a weekly podcast hosted by Sean in St. Louis (Sean J. Jordan, President of https://www.researchplan.com/) and featuring guests from the St. Louis area and beyond.
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TRANSCRIPT:
The global video game industry is worth close to $300 billion globally, with at least a fourth of that coming from the United States alone. That is nearly five times the size of the global movie industry, by the way, and twice the size of the global book market.
Video games are big business, enjoyed by over 3.32 billion people globally – 45% of women and 55% of men.
And among the online population, which includes anyone listening to this show, that’s 72% of women and 81% of men.
52% of all gamers subscribe to at least one video game service like Xbox Game Pass, PlayStation Plus or Nintendo Switch Online, and while about a third of gamers play on a dedicated console like the PlayStation 5, Nintendo Switch or Xbox Series S and a third also play on a PC or Laptop, the most popular platform for gaming is actually the smartphone, which is used by 54% of gamers.
I mention all of this up front because gaming is one of the top entertainment industries in the world, and it’s not the domain of teenage boys dwelling in their basement – it’s truly an activity that almost everyone who touches technology engages in at least some of the time. But gamers are a fragmented audience with three main groups.
There are the casual gamers, who make up 41% of the audience and who mainly play what we call casual games – stuff like Wordle, Block Blast!, Royal Match, Candy Crush, and Monopoly Go.
There are the core gamers, who make up 34% of the audience and who mainly play the really popular games – Mario, Sonic, Call of Duty, Madden Football, Grand Theft Auto, Resident Evil, Fortnite, PUBG – games that tend to be on popular platforms, have a bunch of installments and which may have an online component to keep people coming back.
And there are the hardcore players, who make up 25% of the audience and who tend to play a lot – on average, around 37 hours a week – and to either specialize in certain types of multiplayer games, like Helldivers 2 or Overwatch or Final Fantasy XIV or who have a large and varied gaming diet across multiple platforms. This is what most people thing of when they think of a gamer, by the way, because these are the folks who are most likely to make gaming a part of their personal identity.
So, with all these gamers making up this $300 billion industry, you’d assume everything’s going gangbusters for all the companies involved, right? Not even close. At least once a week for the last several months, there’s been a major announcement about a game studio closing its doors or game creators getting laid off. There were several high-profile games in 2025 that failed to meet sales expectations, and Nintendo’s Switch 2 console had such a rocky launch Nintendo’s been offering big discounts on it to help it sell through the holidays.
These are not the signs of a healthy industry, and a lot of the reason why the video game industry is struggling right now is due to a lack of good strategic marketing. But I’m not blaming the video game marketers for this one – I’m blaming the people who have gotten too cozy coasting off the wonderful marketing apparatus that previous marketers had built.
And like a roller coaster that badly needs maintenance, the video games industry needs to reset its marketing strategy before something goes really wrong.
I’m Sean in St. Louis, and this is the Marketing Gateway.
So, here’s a crash course in how video game marketing has worked over the last 50 years – and yes, video games have been around for over 50 years now as consumer products! The Atari Virtual Console System, later known as the Atari 2600, launched in 1976, and before that, there were game systems like Pong! Consoles and the Magnavox Odyssey.
And back in the 1970s, video games were primarily carried in department stores like Sears in the electronics department, the same place you’d go to buy televisions and stereos and eventually, home computers.
And so the marketing for video games was primarily done through advertising circulars, catalogs, in-store demonstrations and promotional displays. Video games were new and they were relatively expensive, so price mattered more than anything, and that’s what a lot of the old ads would showcase.
But the games themselves didn’t look like much due to the limited graphics of the time, and so the product packaging itself had to really sell the idea that these games were fun and interesting.
Video games got super popular and became a huge fad in the early 1980s, and major game makers like Atari, Coleco, Activision, Mattel and Parker Brothers were making a ton of money off of them. You’d even see TV commercials for video game systems and the new games coming out for them, and retailers would often advertise sales specifically for video games in their circulars. But then in 1983, the market crashed, and retailers didn’t want anything to do with video games. Many of them thought home computers were going to be the next big thing. And so the only advertising you’d really see for video games was for clearance sales as retailers attempted to unload their inventory.
But a Japanese company called Nintendo saw an opportunity to launch its Family Computer video game system in North America. Unfortunately, they found that the Family Computer – or Famicom, as it’s more often known – wasn’t viable in the North American market without some serious retooling. Nintendo hired a marketing agency called Worlds of Wonder to help them find a pathway to sell it. Worlds of Wonder had already successfully marketed the Teddy Ruxpin bear and the Laser Tag play set, so they were a great fit for this challenge, and they saw an opportunity in the toy market.
So Nintendo redesigned it to look more like a VCR with a tray in which you’d load game cartridges, added a toy robot and a zapper light gun accessory, and convinced toy stores like Toys ‘R Us and Kay-Bee Toys that this was not a video game system like an Atari – it was the Nintendo Entertainment System, a product that every kid was going to want. They supported it with a smart marketing campaign that included the advertising tagline, “Now You’re Playing With Power!”
The Nintendo Entertainment System was a big success, and it revitalized the video game market in North America. Nintendo’s Game Boy and Super Nintendo Entertainment System were also quite popular, and Sega’s Genesis and Sony’s PlayStation and, later on, Microsoft’s Xbox helped to show that video games were a growing market that could go beyond children and appeal to teens and adults as well.
And the video game market has long followed the trend of other entertainment industries like music and movies where surprise hits have come out and increased demand exponentially. One of the biggest and most surprising hits in the 1990s was the Japanese game Pocket Monsters, released in North America as Pokémon for the Nintendo Game Boy. That series not only unleashed a mania nobody really expected, including Nintendo, but it’s still going strong today 30 years later!
So let me pivot a little bit now to talking about how video games were marketed in the 1990s, because this is where the apparatus for game marketing was truly built. In the 1980s, video games tended to just appear and people would buy them and try them, but because they were so expensive per unit and since unsold inventory clogging up the shelves was what had killed the Atari-era industry in 1983, Nintendo took tight control of the market and restricted the flow of games, limiting most publishers to no more than five releases per year.
This gave publishers more of an incentive to strategize and market their titles to build anticipation, creating a cycle of building hype before release to try to maximize the potential of day one sales.
So, you’d see game publishers use four main tools. The first was pre-release advertising, which was primarily done through print media and television. Video gamers had their own dedicated magazines to read, and ads in these magazines carried a lot of weight. Most television advertising appeared on after school syndicated shows or Saturday morning cartoons. Nintendo even had its own magazine, Nintendo Power, through which it would feature games in detail, and it would work with publishers to market games through editorial content.
The second pillar of marketing was trade shows. The Consumer Electronics Show, or CES, was held four times a year and it became a hotspot for upcoming video game news. Publishers would show off previews of their games to the press and build anticipation for what was coming. Video gamers, in turn, would read about these upcoming games in magazines or see them on news segments and build excitement for them through word of mouth. The games industry eventually build its own annual North American trade show, the Electronics Entertainment Expo, or E3, to reduce the number of shows publishers needed to attend in a year. But there were other trade shows in Japan and Europe as well to support those markets.
The third pillar was media relations. Video game publishers tended to work with PR firms to help secure previews and reviews in magazines and on news segments to help further build the hype for new and upcoming games. Because these games often required specialized development hardware to play, it became more and more common to sponsor junkets and preview events to showcase upcoming demonstrations. And many magazines that covered video games tended to send freelance writers interested in the topic of video games to these events, leading to favorable coverage much of the time. Media relations personnel would also distribute official artwork, talking points and press releases to magazines to further build up the hype and newsworthiness of upcoming games.
The fourth pillar was in-store point of purchase displays, which often were set up and merchandised by the companies that made the actual video game platforms – Nintendo, Sega, Sony, Microsoft – and supported with promotional in-store materials showcasing the latest games. As specialty retailers like Electronics Boutique, Funcoland and Babbage’s began focusing on games, they received even more of this attention. I know at my EB Games store, I was frequently changing out posters, putting up POP displays and updating endcaps to match the latest promotional plannograms.
So, here’s the thing. This four-pillar approach worked pretty well until the last 10 years or so, and the reason it stopped working is because the market itself shifted.
Up until around 2010, games were primarily sold as physical releases, with digital games purchased online and downloaded from the internet really being a minor sliver of the distribution process.
Until they weren’t, and over the 2010s, gamers got more and more comfortable with buying games digitally. By 2017, when the Nintendo Switch debuted, many people were already used to buying their games online, and by 2020, when the pandemic had us all stuck indoors, gamers got even more comfortable with buying games online since going to the store was a lot harder than just clicking a few buttons.
You also had a rise in what are known as “live service games,” and the easiest example I can offer is Fortnite, a game that’s constantly changing and adding new updates to keep its audience engaged. Fortnite is also free to play, which means Epic Games has to convince some proportion of its players to spend actual money on the game. They do this by offering cosmetic items that don’t impact the game in any way, but allow players to dress up as characters from popular franchises ranging from The Simpsons to the Power Rangers to the K-POP Demon Hunters to Marty McFly from Back to the Future.
Gaming has also seen a huge increase in what are known as “indie game developers,” which is generally smaller teams who self-publish their games digitally for budgetware prices. Some of these games are mega-hits – the $15 poker-style game Balatro came out of nowhere in 2024 and sold over 5 million copies within a year! – but most are modest sellers at best and have to rely primarily on social media and word of mouth for marketing.
These changes all happened during an erosion of those four pillars I mentioned. Video game magazines are pretty much dead now, killed by the internet and largely just produced in UK and exported to the rest of the English-speaking world.
The trade show E3 died off in 2021 as video game publishers realized they could market directly to consumers at public expos and on the internet instead of going through the press. But even E3 was trying to pivot – it opened up to the public between 2016-2019, but was killed off, like so many trade shows, during the pandemic.
Point of purchase displays are increasingly rare at major retailers, and even the video game chain GameStop – which swallowed up all those other stores I mentioned – barely does point of purchase anymore. They’re so focused on selling merchandise and ancillary products that they aren’t really a destination for games anymore.
Video game advertising has also changed a lot. Sure, you’ll still see ads for big games like Madden Football or Call of Duty or anything produced by Sony, Microsoft or Nintendo, but often, these are far less visible and impactful than they used to be because they’re on during sporting events or other televised programming where people time-shift or mute during commercial breaks. Instead, there’s been an increased focus on just uploading video game trailers and production videos online and trying to spread them around through social media – an increasingly ineffective strategy for most games because there’s just so much content to see.
On mobile, you also see a lot of commercials for live-service games that are just trying to grow their install base, often by using the playbook the gambling industry has traditionally used, like showing people playing the games badly so viewers will think the games are really easy, or promising big bonuses for first time players. It’s kind of gross.
And so what we’re left with is the hype cycle that other marketers built, and let me be honest – the data say it’s not working out so well, either.
A study from Circana came out in 2025 that found that US gamers are, on average, buying two games or fewer per year. Only 4% of gamers buy a new game more often than once per month, and a third don’t buy any games at all – they just play what they already have or stick to free to play games.
And of those gamers who only buy two games? They’re most likely to be long-running series like Call of Duty and Madden football. Call of Duty, by the way, did so poorly in 2025 that Activision Blizzard, now owned by Microsoft, is considering not releasing a new edition every year like the have for the past decade and a half.
And Madden NFL football, which is produced by EA Games, is sold as little more than a roster update with slight improvements each NFL season, and it’s an anomaly as video games go. Its mobile counterpart, which gets more and more popular every year, is a live service free to play game with microtransactions, and it’s not unthinkable that it will one day be the main version of the game.
The declining interest in buying new games is a big problem, because it means that a lot of those $300 billion a year revenues are not going to people creating things that are new and different, but things that are old and familiar and which are offering microtransactions or subscription fees. To put it in context, it’s analogous to the music industry where album sales are way down for everyone but Taylor Swift and Vinyl collectors, but Spotify is making a killing selling access to backcatalog songs.
So, how can marketing fix a problem when you have an industry that’s growing, but where actual unit sales are down?
Those four pillars I mentioned before – advertising, trade shows, media relations and point of purchase – were all part of a broader strategy to build awareness and excitement for game releases, and that’s where the hype cycle really spun up.
Many game developers have ceded this ground today in favor of metrics measuring online engagement and playtime, and this leads to situations where a big game will come out, engagement will never reach the numbers the publisher was looking for and the game’s development team will get fired or the game will get cancelled.
Just recently, this happened with a game called Highguard, which got nearly 100,000 concurrent players when it launched, but then dropped down into the low thousands when the hype wore off and the studio, Wildlight, announced it was lay off most of its staff on February 11th.
So, why was Highguard such a flop? The team developed it pretty much in secret, making the big announcement for it during a live show called The Game Awards that aired on December 11, 2025. This built up unbelievable hype for it, but there was no follow-up from a media relations team or a marketing campaign to guide that hype in a productive direction.
The game also wasn’t very well-tuned to the type of players it was trying to attract when it arrived and it caused a lot of gamers, who are often quite vocal about what they do and don’t like, to leave negative reviews and to start rooting for the game’s demise. The toxicity that formed around Highguard tainted the game, and if it manages to survive past this year, I’ll be surprised.
Compare this to Marvel Rivals, a similar game from NetEase that stars anime-style takes on popular comic book characters. And I’ll be honest – the game’s just OK. It’s not my cup of tea at all, though my son loves it.
Even so, this game has a strong marketing push behind it that’s doing everything right. The marketing cycle for this game involved alpha and beta tests to tune the game to players, building relationships with online content creators to build hype for the game’s impending release and a constant cycle of announcements, updates and in-game events. There are also ancillary media like comic book tie-ins and merchandise.
And even though there’s been a lot of online chatter about how terrible game’s ads are, there is an advertising budget associated with growing the game, and any publicity is good publicity, right?
All that marketing made the game a big hit when it launched and has kept it viable. Much like Highguard, the game dropped off in popularity after its launch window, but good marketing has kept it viable and growing since its debut in December of 2024 – it’s actually one of the most popular games in the world right now. Not bad for a game most people feel is perfectly average at best.
This all points to what marketing can do for video games, and that’s what it’s always done – build hype and excitement so that people really get invested and excited in the experiences they’ll get to have. That has always been what’s driven video game sales and marketing, and if you want people to plunk down real money instead of just loading up free-to-play games or games they already down, that hype cycle is important.
But we also need to recognize that now that the market’s shifted, release day is only part of the equation. Building up hype and excitement for launch is just the start of the race, and having a sustained marketing plan in place to keep sales going after launch is just as important as day 1. And that requires pivoting the story to, “yeah, you can do this NOW, but just imagine what you’ll be able to do SOON with our next update…”
That might sound exhausting, but it’s how the game is being played now, folks. And if you look at the most popular video games of all time – Minecraft, Grand Theft Auto V, Red Dead Redemption 2, Mario Kart 8 and Pokémon among them – every one of them has made a strong case for why you should buy it even after the game’s been sitting on the shelves for awhile.
And in this era where people have more games than they can ever hope to play, the message doesn’t need to be, “hey, this is a great way to spend your money!”
It needs to be, “hey, this is a great way to invest your time!”
I’m Sean in St. Louis, and this has been The Marketing Gateway. See ya next time!
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