What E3 Can Teach Marketers About Connecting With Their Audience

Worth $90 billion globally each year, the console and PC gaming business is a goldmine. And E3 is its annual showcase. But it's not just products for sale, it's new lessons in engagement and relevance, says Spaceship CEO Kumar Manix.

Video gaming is seriously big business. Raking in more than $90 billion globally each year (and counting), it's a major growth industry, especially in Australia and Asia. Yet, somehow, it remains something of a mystery to most marketers, who often struggle to build a meaningful connection with the vast but poorly understood gaming community. Which is perhaps why E3 - the Electronic Entertainment Expo hosted in Los Angeles each year - is such a huge deal. The expo is the Super Bowl of the video gaming industry, attracting more than 40,000 guests.

Creators, retailers, advertisers and industry folk all rub shoulders at the three-day event that sets the agenda for the industry for the coming year. It's the place to find out the hot trends and to see what the industry leaders have tucked up their sleeves. This year, it's all about new hardware, virtual reality, blockbuster games - and the services that hold it all together. So far, Sony has unveiled the release date and price for its new virtual reality headset, as well as a slew of blockbuster games. Xbox has shared its vision for the future with a new family of Xbox One Devices. Electronic Arts, Ubisoft and Bethesda all premiered new games to an ecstatic audience.

A few mainstream brands exhibited, including Doritos, who offered punters an 'experience zone' in downtown LA and Lamborghini who showcased its new supercar - featured in Xbox's Forza Horizon 3, which invites gamers to race at iconic Australian locations.

So what does this boil down to? Here's a quick rundown of the big takeaways from this year's E3:

Co-creation with Fans

It's a no-brainer that fans are essential to the success of any product, but many of the big gaming franchises are actually building this idea into their creative process, and using beta programs (in which new games are first tested out on a sample of fans before being fully released) as a vital step in their development process.

What does this tell us? For one thing, there's no shame in doing thorough market research. In fact, taking the time to really listen to fans can be the key to a successful product.

Using fans as co-creators has two benefits: you can use their feedback and data to make your product better and, by providing early (and free) access to the product you build a connection with fans ahead of the release of the final finished product.

Video Fuels The Gaming World

It's important not to underestimate the value of video in the gaming world. It's not just an optional marketing extra but a crucial part of the system.

The week of E3 alone more than 1000 videos - including trailers, short-form documentaries and gameplay footage - was released by the major gaming companies, and the production standards for these videos is absolutely top-notch. In fact, many have used Hollywood to help produce the videos with state-of-the-art CGI and gameplay cut throughout.

Why plunge so many resources into video? Because gamers adore video of every kind, from the highly polished trailers to the scrappy user-generated offerings peppered across social platforms - and the smart companies are feeding this in a big way.

Xbox has used this year's E3 to herald its foray into Snapchat. Twitch (owned by Amazon) is the official broadcaster for E3, plus YouTube and Facebook Live both have a strong presence. Through fans, creators, celebs, influencers or brands, hundreds of millions of hours of video is being shared and viewed this week alone.

Engagement Not Sales

Every video gamer has downloaded games for free at some point. They have their fun with it, then maybe pay for a few add-ons to improve the experience. Or they buy a full game from the outset and enjoy everything it has to offer. These are the models that have sustained the industry thus far - but this is all about to change. The future is games as a subscription service, with game creators continuously offering updates by releasing expansions and patches, with the goal of driving retention and engagement. It'll no longer be about chalking up how many games you've sold but rather how many active users you have.

The Esports Hype Is Real

There's been plenty of chatter about eSports (with talk of it joining the Olympics and of $20 million in prize money) and what's crystal clear from E3 is that it's here to stay - and growing rapidly. Video gaming is no longer a solo pursuit.

To prove this, EA hosted an eSports contest at E3 and invited some splashy names to join in. Jamie Foxx, Zac Efron, Snoop Dogg, plus NFL, NBA and various music stars all joined forces with pro-gamers and YouTubers for a 64-person multiplayer match of the soon-to-be-released World War 1 video game Battlefield 1. And, while this was as much a press stunt as it was a contest, there are plenty of other leagues and tournaments being set up every week. Twitch is the official broadcaster of many of these tournaments, and attracts huge audiences, as well as bigger prize money and fresh new personalities, which all add up to prime opportunities for commercialisation.

These opportunities are currently dominated by tech brands, but there's undoubtedly a future for non-tech brands to integrate through on-site branding and streaming sponsorships. eSports have the potential to offer a level of engagement so high that it would make any marketer weak at the knees. But it's essential everyone involved gets the integration absolutely right and it feels authentic.

VR Comes In All Sizes - But It's Not For Everyone

The gaming industry has been the primary driver of virtual reality as gamers search for more immersive content beyond their consoles, PCs and phones. This week Sony showed off its new VR headset with blockbuster IPs like Batman and Star Wars and the next 24 months will see this space explode with more top end experiences.

Brands really need to consider scalability as consumers are exposed to more options and, as adoption grows of VR and experiences get richer, they need to understand the space they're playing in. Do they want to play at the entry level with 360 videos (which is scalable, thanks to Facebook and YouTube) or at the top end with immersive high-fidelity VR (which is still limited to early adopters)?

For the time being, the best strategy is to only invest in a rich VR experience if you are in a well-established industry such as automotive or tourism - or you might not get bang for your buck. The hype, excitement and passion behind E3 makes this the breeding ground of the future of innovation and fan engagement. It's a bubble where dedicated fan engagement comes first and any announcements made can set the tone for consumer reactions and marketers for the year ahead.

Without a doubt, the tech innovations behind gaming revealed at E3 will continue to set the tone for other mainstream brands and marketing campaigns over the next 12 months.

Source: What E3 can teach marketers about connecting with their audience - Kumar Manix, Mumbrella, June 2016