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Tourism Review

ISSN : 1660-5373

Article publication date: 26 April 2018

Issue publication date: 1 May 2018

This paper aims to expand the media-related tourism literature in a new domain of application by highlighting a connection between the world of video games and tourism.

Design/methodology/approach

Through deductive content analysis, this study looks at 137 online comments posted on popular gaming and travel websites that connect two popular video games (Assassin’s Creed II and Assassin’s Creed Unity) and travel motivation.

Results establish that video games share similar travel motivation elements with film and should be considered as a driver of tourism. It argues that destinations should consider video games as a platform for motivating tourists before they consider investing in virtual reality. It outlines opportunities for destinations interested in video game-induced tourism and calls for more research and case studies that link video games with destinations.

Originality/value

This is, to the authors’ knowledge, the first paper to investigate this connection. As such, it outlines untapped opportunities for destinations interested in video game-induced tourism and opens up a new line of research within media-related tourism literature.

• Video games
• Film-induced tourism
• Media-related tourism
• Travel motivations

Dubois, L.-E. and Gibbs, C. (2018), "Video game–induced tourism: a new frontier for destination marketers", Tourism Review , Vol. 73 No. 2, pp. 186-198. https://doi.org/10.1108/TR-07-2017-0115

Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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Here are the top gaming, tourism headlines for 2023

After a fair record for predicting 2022, my 2023 crystal ball sees gaming success here and in Macao, new flights to Japan and an F1 letdown.

Every January, we look back at the joys and failures of the previous year.

Years ago, I decided to write a New Year’s column predicting the top stories of the coming year and produce a scorecard showing how well I did previously.

Although my crystal ball has a few cracks in it, I soldier on. Here’s how I did for 2022:

The Oakland Athletics will abandon plans for a Strip baseball stadium to stay in Oakland. Technically wrong because two Strip locations continue to be in the running for a potential stadium. But I continue to believe the A’s won’t ever make it to Las Vegas.

All the major transactions that have been announced on the Strip in 2021 eventually will be approved and the deals closed. Maybe this one was too easy, but I scored 80 percent on deal closings. MGM Resorts International bought The Cosmopolitan of Las Vegas, Hard Rock International acquired The Mirage, Apollo Global Management took over The Venetian, Palazzo and The Venetian Expo, and Bally’s manages the Tropicana Las Vegas. I missed on Caesars Entertainment announcing the sale of Planet Hollywood Resort, as the company backed off from selling any Strip asset.

Nevada regulators will have a showdown with Penn National Gaming Inc. over business partner David Portnoy of Barstool Sports. Wrong. No application from Penn, and thus no showdown.

COVID-19 and the omicron variant will continue to play havoc on the city’s convention industry. Turned out to be accurate as convention attendance still hasn’t reached pre-pandemic levels.

The NFL will stage its most successful draft in history in Las Vegas and vow to return. Nailed it.

The NBA will announce that it is awarding an expansion franchise to Las Vegas to begin play in the 2024-25 season. It hasn’t happened — yet. This most likely is a prediction worthy of extending into 2023.

2023 headlines

By my count, that’s a record of three wins, two losses and a tie. So here are my predictions for 2023’s big headlines:

Nevada’s casinos will record 12 more months of gaming win revenue in excess of $1 billion. That would extend the current streak to 34 straight months, assuming that December 2022 beats the mark. The Las Vegas marketing machine has too much going for it to see a slide, with its emphasis on entertainment and sports. The new MSG Sphere at The Venetian is bound to attract even more visitors when it opens by the end of the year.

Convention attendance in Las Vegas finally will surpass 2019 levels. It has been a struggle with COVID and nonstop international flights to Las Vegas still not up to pre-pandemic levels.

The Nevada Gaming Control Board’s bid to discipline Steve Wynn will fail. Nevada regulators have said they are building a case against the former Wynn Resorts Ltd. CEO for damaging the reputation of gaming in the state from allegations that he sexually harassed and assaulted Wynn employees. Wynn has denied the allegations against him, and the company was disciplined with a record $20 million fine in 2019. Wynn believes he’s no longer under the jurisdiction of Nevada regulators because he left the company. Regulators argue that he remains under Nevada jurisdiction and won a court case over that issue. I believe it’s highly unlikely that regulators ever conduct a hearing and, if they do, that Wynn will show up.

An international air carrier will announce nonstop flights between Las Vegas and Tokyo. The Asian market is underserved, and after last year’s Routes World conference in Las Vegas, it’s logical that some airline — maybe not a familiar brand — will fill that need.

Attendance and revenue projections for November’s Formula One race will fall short of expectations.

Gross gaming revenue in Macao will more than double in 2023 from 2022 levels. That’ll be great news for Las Vegas Sands Corp., Wynn Resorts Ltd. and MGM Resorts International, which all recently were retendered to operate for 10 years in the Chinese enclave.

Three gaming companies with ties to Las Vegas will win licensing in New York.

My crystal ball and I are now officially ready for 2023.

The Review-Journal is owned by the Adelson family, including Dr. Miriam Adelson, majority shareholder of Las Vegas Sands Corp., and Las Vegas Sands President and COO Patrick Dumont.

Contact Richard N. Velotta at [email protected] or 702-477-3893. Follow @RickVelotta on Twitter.

An expert who monitors sports wagering nationwide thinks Nevada may need to change its in-person registration policy to keep up with competitors nationwide.

It’s been 47 years since the IRS established $1,200 as the level at which W2G tax forms are issued. Is that dollar amount finally about to change?

The convergence of Olympic curling triumphs, a Canadian fan base and a nonprofit club have laid the groundwork for a new local facility.

While MGM’s lawsuit against the Federal Trade Commission and a “60 Minutes” story offered new details, there are still unanswered questions about last year’s cyberattack.

Two companies, Z4Poker and MGM Interactive, ask regulators to extend the activation of their licenses a 14th time so that they can enter a lackluster market.

The transition of The Mirage to Hard Rock Las Vegas will generate nostalgic memories, but it’s part of the Las Vegas way of constantly evolving to what’s next.

A legal expert says Fontainebleau’s response to Wynn for poaching employees sounds more like a divorce proceeding than a business lawsuit.

The typical Las Vegas visitor in 2023 was younger than in the past, spent more money, chose different activities over shows — and had a great time while here.

Gaming industry analysts applaud return of IGT to Nevada with $6.2 billion spinoff and merger with Everi Holdings Inc.

Former Nevada Sen. Harry Reid — the same person for whom our airport is named — had a pivotal role in backing high-speed rail instead of an innovative maglev project.

Gaming & Esports: Media’s Next Paradigm SHIFT

Creating a New Reality: The Metaverse in MENAT

Charting Economic Opportunities in the New Digital Paradigm

Beyond The Network: Policy Measures to Position 5G as a Launchpad for the Digital Economy

Technology, Media, and Telecommunications

/ report, game changer: accelerating the media industry’s most dynamic sector.

By  Dr. Alexander Schudey ,  Pavel Kasperovich ,  Adeel Ikram , and  David Panhans

The gaming sector is unique. Originally viewed as a children’s diversion, attracting limited attention compared to TV, movies, or music, gaming is now by far the fastest growing sector of the media industry. With the average player age recently exceeding 30 years old, gaming is now the second largest media sector that is about to reach $200 billion. 1 1 Newzoo, Ovum Notes: 1 Newzoo, Ovum Gaming IP has become key to attracting new audiences, indicating future growth potential. As part of BCG’s series of gaming reports, following on from ‘ Gaming & Esports Media’s Next Paradigm SHIFT ’, this report aims to map gaming’s current spectacular journey, highlighting some key trends and opportunities both globally and in the Middle East, which business leaders and companies can leverage to join this dynamic sector.

Key Insights

• Gaming is the #2 media sector after TV: $184.4 billion in 2022 with a path to reach >$210 billion in the next 3 years.
• Mobile is the #1 gaming segment (>50% in revenues): driven by casual gamers with easy entry (smartphone) and free-to-play model, enjoying mostly “time-killer” games. e.g., smartphone penetration in Indonesia drove significant Mobile Legends: Bang Bang (ML:BB) adoption
• PC/Console are still strong: major platforms for core gamers that demand full immersion and advanced gameplay. Live game streaming sustains interest from a wider audience. e.g., Elden Ring was #1 in streaming after its release and sold 12M copies in 2 weeks
• Mobile and PC/Console have started to converge: main trend is in IP as many PC/Console games are adapted to Mobile (League of Legends (LoL) – LoL Wild Rift, Diablo – Diablo Immortal) or even go Mobile-first PlayerUnknown's Battlegrounds (PUBG). Cross-play is a 5+ year trend due to vast differences in gameplay.
• Game publishers adopt a “less is more” strategy: main focus is on games based on proven IP, often free-to-play, that can be sustained and evolved for 10-20 years. e.g., Activision-Blizzard builds around core IP for 25+ years (Warcraft, Diablo, Call of Duty)
• Microsoft is the closest to building a “future of gaming” offering: hardware (Xbox, HoloLens), content (publisher – Activision-Blizzard; user-generated – Minecraft) and infrastructure (Azure cloud) that can be bundled into a single subscription (Xbox Game Pass).
• Highest gaming penetration: >60% of the population are game enthusiasts, resulting in the highest share of gaming mobile app downloads (50% vs 40% globally of total app downloads are gaming apps).
• Long-term commitment to the sector: Saudi Arabia recently announced its gaming and esports strategy, and UAE has created two gaming centers to attract global companies.
• Unprecedented government investments: Saudi Arabia's Public Investment Fund (PIF) allocated $38 billion to Savvy Games Group to invest in gaming and esports across the full value chain (and potentially more funds for other levers to develop the gaming ecosystem) with multiple acquisitions in gaming (Embracer Group, Scopely) and esports (ESL, FACEIT, VSPO) have been already executed; Abu Dhabi Gaming created a dedicated gaming and esports hub with strong incentives.
• Leader in game streaming growth: while China will be the largest market for streaming, reaching a ~265 million audience in 2025, Middle East & Northern Africa will grow 3 times faster (24.5% vs 7.6% CAGR) to reach ~200 million people in 2025. 2 2 Newzoo “Gaming’s Live Streaming Audience Will Hit 1.4 Billion by 2025” Notes: 2 Newzoo “Gaming’s Live Streaming Audience Will Hit 1.4 Billion by 2025”
• Direct investment is a straight-forward path followed by many VCs like Bitkraft and Hiro Capital.
• Media can build content on gaming IP: e.g., Netflix creates content around gaming IP (Arcane, Cyberpunk 2077, Dota to name a few) and games on own IP (e.g., Stranger Things).
• IP owners can build flywheels: e.g., Tencent promotes IP through media content (gaming, video, books) and beyond (e-commerce, travel, F&B).
• Technology companies can utilize multiple synergies: e.g., Apple created one-stop-shop for games, video, music, fitness, and cloud storage (Apple One); Meta experimented with live gaming streaming integrated in its social network (Facebook) and will likely leverage gaming technology for its Metaverse play.
• Telecom operators (telcos) can leverage gaming to strengthen brand for its audience: some telcos integrate gaming into their offering (e.g., KPN offers its customers access to in-game items; Deutsche Telekom and LG Uplus offer cloud gaming services to their customers), while others follow audience’s attention (e.g., SK Telekom and Ooredoo invested in esports clubs).

Middle East Expert Perspective: Interview Paul Dawalibi

Paul Dawalibi is a technology entrepreneur, investor, and gaming & esports expert. As the CEO of Holodeck Media, Paul is building exciting metaverse, gaming and web3 projects. He also hosts Game Changers, a gaming and metaverse show on CNBC Arabia. He is a frequent speaker at metaverse and gaming conferences, and co-authored the book ‘Metaverse Dream’. Paul, you recently moved from US to the Middle East. What excites you about the gaming sector in this region? Paul Dawalibi: For years now, I’ve been saying that the world is sleeping on a massive gaming opportunity in the Middle East. Everyone talks about Asia, but the real gaming powerhouse will be the GCC region due to several factors.  There’s a confluence of factors that gets me excited about gaming in the Middle East.  First, the Middle Eastern populations, especially Saudi Arabia, are young and digital savvy. Seventy percent of Saudi Arabia’s population is below the age of 30. Average disposable income is higher. The hot weather means people spend more time inside, which makes gaming an obvious choice of activity and recreation. The second factor that gets me excited is the significant government commitment. Saudi Arabia has committed to investing $38 billion in gaming companies. Abu Dhabi provides strong incentives and benefits to gaming companies that set up shop in the emirate. The third factor is tourism. The UAE is obviously a tourism hotspot already, so there is a significant opportunity to provide visitors with gaming and esports related experiences. Saudi Arabia is also making a big tourism push, so gaming and esports would provide something unique to market to the world. Finally, gaming is a global industry, and the Middle East is truly at the crossroads between East and West. This gives gaming companies operating in the Middle East a distinct advantage in being able to serve North American, European, and Asian customers with equal ease.   Paul, focusing on the gaming and esports efforts in the Middle East: what’s your view, and how do other major sector centers see them? Paul Dawalibi: A lot of the conversation around gaming in the Middle East has been dominated by Saudi Arabia, which isn’t surprising given its large-scale financial commitments to boost the sector. Most of the western world is not aware at all of what’s going on in the Middle East when it comes to gaming, beyond a few – not always favorable – press releases. While the path forward for Saudi Arabia is bright, it still needs to address several challenges to realize its ambition. It especially needs to attract experienced human capital with deep industry knowledge, and redouble marketing efforts to the West and East to draw both partners and talent. But Dubai and Abu Dhabi have a major opportunity to compete with Saudi Arabia. The UAE has great infrastructure and easy access to talent from around the world. What the UAE lacks is a cohesive emirates-wide gaming vision and strategy backed by sufficient funding. As interests might diverge in Abu Dhabi, Dubai, and other free zones, it could be more challenging to reach the required scale. Over the past decade there has been a lot of buzz around the gaming opportunity in China, and Asia in general. But this region faces a number of challenges and hurdles. While the population sizes are large, disposable income and average spend per player in this region are actually quite low. China has also spent the last couple of years restricting gaming, and approving only few new games for distribution in the country. In fact, we’ve seen Asian gaming companies like Tencent and Netease building their presence in the Middle East because they realize that the opportunity in the region is greater.  Paul, we see more and more industries getting interested in gaming. Gaming IPs are leveraged for Hollywood blockbusters. Technology companies and VCs make major investments. Just hype, or the beginning of a longer journey? Paul Dawalibi: Gaming and gaming principles (gamification) will inevitably either intersect or completely disrupt every industry on the planet. So we are just at the beginning of a very long journey for the sector as a whole.  Content and IP will be important pillars of this multi-trillion-dollar sector. Technology and infrastructure will also be key growth areas. Brands and traditional entertainment embrace gaming because of the still massively untapped value of the gaming audience. It’s also inevitable that we will see an increase in investment and venture capital to match. If the next few years bring recession, gaming will once again demonstrate that it’s one of the most recession-proof industries on the planet.  In fact, all of the hype and talk around the metaverse is fundamentally just gaming. The metaverse is just a fancier word for gaming (especially if we define gaming as the creation of virtual worlds). The word “metaverse” feels more “adult” than gaming, which is often perceived as a hobby just for kids. The result is that billions have been poured into companies that are fundamentally gaming businesses (but calling themselves metaverse). The metaverse concept also makes it far more palatable to bring gaming into the workplace, or into education or government - all areas where metaverse has seen tremendous penetration but is still just gaming or gamification.  AI also has deep connections to gaming. The same underlying technologies that enable virtual worlds (e.g., GPUs built by Nvidia) also power the biggest AI models. The breakthroughs in parallel computing that enable AI wouldn’t have been possible without gamers spending money to make their games look more realistic. AI will give back in equal amounts to the gaming industry, as virtual worlds get populated with NPCs (non-player characters) that are so realistic they become indistinguishable from human players. Paul, any closing remarks? Paul Dawalibi: The one consistent trend over human history is that as technology progresses, our leisure time increases. As machines and AI do more work for us than ever before, we will have more free time to spend on recreation. This is how gaming becomes the biggest industry on the planet. And the Middle East is best positioned to capture trillions of dollars of new value that will be created by gaming and metaverse over the next decade.

The Drivers of Global Gaming Growth

The COVID-19 pandemic spurred growth in various media and technology sectors in 2020. Within media, gaming outpaced other segments with an 8% growth rate to reach $198 billion (versus TV's 1% decline to $408 billion 3 3 Newzoo, Ovum, Omdia Notes: 3 Newzoo, Ovum, Omdia ). The sector’s growth slowed in 2022 for several reasons, including the end of pandemic shutdowns and Apple’s privacy changes affecting mobile gaming ads. The market size dropped to $184.4 billion 4 4 Newzoo "The Global Gaming Market Per Segment 2022 ” Notes: 4 Newzoo "The Global Gaming Market Per Segment 2022 ” , with mobile gaming accounting for 50% of revenues.

However, the industry is expected to resolve these challenges and recover in mid-term, as games become more embedded in everyday life (Exhibit 1). Games have consistently held a 40% share of global mobile app downloads over the past 5 years. The number is even higher in the Middle East, reaching 45-50% in 2020. 5 5 App Annie Notes: 5 App Annie

The Middle East is a unique market for gaming. Governments in the GCC region have invested heavily in the industry and recognized its potential, implementing strategies to attract gaming companies. In Saudi Arabia, a National Gaming and Esports Strategy plans to create 40,000 jobs and develop 30 games by 2030, while in the UAE, AD Gaming and DMCC Gaming Center aim to attract global businesses and support local talent.

Gamers on PC/Console vs. Mobile

The gaming sector is expanding and changing, which makes the definition of a “gamer” more nuanced. While mobile dominates the gaming market, the split of revenue across different platforms does not always match the preferences of the core global gaming community. According to a BCG survey of 10,000 participants from 10 countries, most core gamers primarily play on PC and console. This is because only PC/console games enable high-engagement AAA titles, demanding more player’s focus and dedication.

However mobile games absorb twice as many hours per week as PC/console games, and the mobile gaming market is more diverse (Exhibit 2). It attracts casual players who enjoy “time killer” games like Candy Crush but may not identify themselves as "gamers." Nevertheless, these casual players contribute substantially to the growth of the mobile gaming market.

The Middle East is a significant market for both core and casual gamers. Saudi Arabia leads, with a market of ~$1.8 billion (Exhibit 3). It is a skewed towards mobile gaming which accounts for >65% revenues, though this is partially explained by a stronger presence of non-casual mobile games like PUBG Mobile, Free Fire and FIFA in the top-10 downloads (versus only Free Fire in the top-10 globally). 6 6 App Annie Notes: 6 App Annie

Changing Gamer Preferences

While PC/console and mobile experiences are different, they have started slowly converging. Mobile devices can now offer very high-quality graphics and gaming experiences, while smartphone evolution increasingly reflects and enables the sophisticated gameplay that was previously available on PC/console only. Also, as smartphones are tailored to communication, mobile games can integrate social gaming features better than PC/console.

This has led to more popular PC/console (though mostly PC) titles being adapted to mobile, including leading games like League of Legends (LoL – mobile version is LoL Wild Rift), Call of Duty (CoD Mobile), Diablo (Diablo Immortal). Some leading games are even going with mobile first (e.g., PUBG). And many titles initially released on PC or consoles, such as Minecraft, FIFA, Genshin Impact, and even Fortnite are experiencing resounding success on mobile. Another example is Square Enix, which acquired Eidos and reimagined popular games like Hitman, Tomb Raider, and Deus Ex by releasing IP-driven mobile puzzle games.

However, true convergence resulting in cross-play is still far from being fully implemented. While it can be easily realized in some game genres (e.g., the collectible card video game (CCG) Hearthstone), it is difficult to ensure the same experience for shooters or RPGs whose gameplay is heavily optimized for PC. An additional challenge for cross-platform development is the need to optimize a game for an increasing number of devices. 7 7 Dirox “Mobile Games Trends and Business Opportunities” Notes: 7 Dirox “Mobile Games Trends and Business Opportunities” While publishers try to solve both challenges, it will likely take 5 years or more to reach full convergence.

Growth Drivers in Mobile

The mobile gaming industry has experienced significant growth in recent years, with the widespread adoption of smartphones and the increasing power of mobile computing. And PC/console game publishers are actively investing in this trend. Factors contributing to this growth include:

• Mobile gaming has outpaced other platforms over the last two decades, particularly after the launch of smartphones, which enabled mobile gaming growth.
• One example of this is the mobile multiplayer online battle arena (MOBA) game called ML:BB - Mobile Legends: Bang Bang, which dominates in Indonesia with 69.7% smartphone penetration and 192.15 million users. Its release coincided with the smartphone boom in the country.
• Platforms serve different purposes. For example, mobile gaming may be used during commutes, while console gaming is the preferred platform for AAA games with high-quality visuals and engaging storylines.
• Platforms already converge by leveraging the same gaming IP, which will accelerate with cloud computing in the mid- to long-term.
• The rise of casual games, which are designed to be played in short periods of time, has driven innovation in the monetization of mobile games, making them affordable for a wider audience.
• Mobile gaming is mostly monetized through advertising, which is technically free for a player, while PC/console games are yet to realize the potential of this model (Exhibit 4).

Unique market conditions are accelerating mobile segment growth in the Middle East. With half its population under 25 years old and tech-savvy, these countries require localized content. For example, Chinese publisher Tencent deployed an Arabic version of the Battle Royale game (PUBG Mobile) in the region. It is now one of the most popular games in the Middle East 8 8 Entrepreneur “The Middle East is Key for Gaming” Notes: 8 Entrepreneur “The Middle East is Key for Gaming” (top-5 in mobile app downloads in Saudi Arabia and top-3 in UAE 9 9 App Annie Notes: 9 App Annie ).

What About the PC/Console Market?

Despite mobile being the top-line driver of the gaming market, it does not mean that the PC/console is in decline. Core gamers still prefer playing on PC/console as games are more immersive and complex.

Constantly improving visual and game content and leveraging popular IP (e.g., the recent Hogwarts Legacy) have traditionally formed the heart of gaming’s strong appeal to a young audience. Today there is an additional growth factor for PC/console market – the rise of game streaming as separate content, run by both professional players and casual gamers.

The growth of gaming streams is a global phenomenon, which increased markedly during the pandemic. Streaming’s audience will exceed one billion people in 2023, increasing with a CAGR of +16.3% from 2020 to reach 1.4 billion in 2025 10 10 Newzoo “Gaming’s Live-Streaming Audience Will Hit 1.4 Billion by 2025” Notes: 10 Newzoo “Gaming’s Live-Streaming Audience Will Hit 1.4 Billion by 2025” (Exhibit 5). Twitch, the leading platform, reached 140 million monthly active users (MAUs) and 31 million daily active users (DAUs) in January 2023.

While streaming growth has slowed, viewership is still up 6% from its COVID-19 pandemic peak in 2020, and 164% higher than 2018. Live streaming slightly decreased in 2022, but Twitch was the least affected, dropping only 6% YoY and keeping its strong leadership position. Facebook Gaming was hit the hardest in 2022, dropping 56% YoY from 2021. While YouTube Gaming has also seen a decrease in hours watched, it has since pulled away from Facebook as the definitive second most-utilized live streaming platform in the West. 11 11 Stream Hatchet Video Game Streaming Trends - 2022 Yearly Report Notes: 11 Stream Hatchet Video Game Streaming Trends - 2022 Yearly Report

Game streaming is why popular titles like LoL or Fortnite stay relevant for the community as it allows interaction with top streamers. Game publishers also reward those who watch streams with “drops” – giveaways of unique digital items to people who watch a stream for a certain time. Both elements incentivize people to watch their favorite streams and strengthens their commitment to the game.

Streaming platforms also play a significant role in discovering and promoting new games. Since Epic Games’ success with Fortnite, when it cemented its leadership position by paying top streamers to play, more games follow same approach (often even without direct payments to streamers). Some newer titles strongly benefit from streaming at the time of release, like Elden Ring which became a leader in streaming right after its launch. This resulted in 12 million units sold in first 2 weeks and significant time spent within game. 12 12 Ginx: “Elden Ring Players Breaks Game Clock With 1000 Hour Play Time” Notes: 12 Ginx: “Elden Ring Players Breaks Game Clock With 1000 Hour Play Time”

The importance of these platforms is hard to overemphasize as viewers tend to stay on platform rather than follow top streamers. For example, a popular streamer Ninja left Twitch for Mixer for an estimated $25 million dollars; however, most viewers stayed on Twitch, which was one of the reasons for Mixer's closure. 13 13 Distractify: “Fortnite’ Streamer Ninja Returns to Twitch After Signing an Exclusive Deal” Notes: 13 Distractify: “Fortnite’ Streamer Ninja Returns to Twitch After Signing an Exclusive Deal” That is why game publishers need to rely on these platforms and work closely with them rather than create their own.

China is expected to remain the largest market for live streaming audiences (forecast CAGR of 7.6% from 2020 to 267.5 million people by 2025 14 14 NewZoo: “Gaming’s Live-Streaming Audience Will Hit 1.4 Billion by 2025 ” Notes: 14 NewZoo: “Gaming’s Live-Streaming Audience Will Hit 1.4 Billion by 2025 ” ). However, the overall growth comes from Middle East & North Africa. The audience for live-streaming games in these markets is expected to increase with 24.5% CAGR reaching 202.3 million by 2025.

Publishers Adapt to New Trends

With such dynamic changes in the industry, game publishers and developers are adjusting their strategies.

New Business Models

Innovation in the mobile market incentivized publishers to explore new monetization methods, in particular "free-to-play" with in-game monetization instead of upfront purchase. Electronic Arts released its flagship shooter franchise Battlefield with a free-to-play version called 2042. 15 15 Gamesradar Notes: 15 Gamesradar

The potential to extend the life cycle of their titles through new content and in-game purchases makes this shift attractive compared to developing completely new games every few years. However, publishers must carefully design monetization to ensure it supports the game and its community, not harm it with:

• "Pay to win" mechanics that impact gamer experience and become similar to gambling.
• "Play to earn", which has potential, but success depends on the ecosystem and can be risky. Earning crypto currency through blockchain based gaming has attracted companies like Gala games, which will be releasing multiple titles in the near future. Axie Infinity is game that had players earning crypto currency and saw a spectacular rise, particularly in the Philippines, but has also suffered a significant drop in fortunes during the recent technology recession. Like any new technology, it needs to be tested over time to know what will work.

Growth in Gaming Budgets

Extension of a game’s life cycle as well as the demand for more immersive and high-quality experiences drive publishers to invest more time and resources in developing their games. AAA games require tens or even hundreds of millions of dollars in investment. For example, Rockstar Games' GTA V had a budget of $260 million and CD Projekt's Cyberpunk 2077 had a budget of over $300 million. 16 16 Screenrant “How Much Cyberpunk 2077 Cost To Make” Notes: 16 Screenrant “How Much Cyberpunk 2077 Cost To Make”

Considering the variety demanded by core players, it is not realistic for publishers to shift to few games with longer life cycles in near future. Instead, hundreds of high-profile AAA games are released each year, though only a handful of those have budgets at the level of GTA V or Cyberpunk 2077.

While this model expands opportunities to generate a return on investment over a longer shelf life, major games still require large upfront investment and long development periods, which can delay cash inflows for several years.

Competition for Popular IP

Focus on proven IP is a strong media industry trend, extending well beyond gaming. Considering the significant investments required to create blockbusters and high audience expectations, recognized IP reduces commercial risks. In film and video, franchises like Fast & Furious and Marvel have gained substantial investments and extensions. Gaming follows the same path, with publishers such as Activision-Blizzard, Naughty Dog, and Tencent aggressively building on their existing IP. For example, Activision-Blizzard has focused on its Call of Duty, Diablo, Warcraft and StarCraft IP for many years.

Over last decades major IP franchises have created active, loyal communities. As with comics two decades ago, the movie industry noticed this trend and has turned to gaming IP as a source for new content (Exhibit 6). In return, this provides an opportunity for game publishers to extend the community for their games and attract new audiences. Beyond movies, publishers are also leveraging gaming IP in other segments like amusement parks, toys, and retail. These further strengthen the connection with IP fans and benefit the games.

Future of the Gaming Market

 How will the gaming sector change moving forward? There are multiple technological, demographic, and media industry trends, many mentioned above, that will continue to play major roles. Among those, four will likely have the largest impact:

Audience growth and demographic shifts

Innovation from players, m&a activity, new use cases.

On one hand, gaming industry growth continues with wider demographic appeal. Mobile gaming is now attracting all ages, particularly in Western markets. In the US, games appealing to Gen X and Baby Boomers (45+), make up nearly 25% of top grossing games in 2021, a 6% increase from 2019. 17 17 Data.ai "2022 Gaming Spotlight: Mobile Extends Lead Over PC and Console as Gaming Market Hits $222 Billion” Notes: 17 Data.ai "2022 Gaming Spotlight: Mobile Extends Lead Over PC and Console as Gaming Market Hits $222 Billion” Gen Y who grew up with computer games are entering their 30s, changing the perception of gaming as just for kids. The average gamer age is now 31 years old.

On the other hand, children and youth still account for most of the sector’s audience growth. Gen Z is the first demographic cohort that spends as much time gaming as watching video content (Exhibit 7). As each child adds to the gaming market, the audience will continue to grow. 18 18 Nielsen Games - U.S. Report; 2021 Essential Facts - ESA Notes: 18 Nielsen Games - U.S. Report; 2021 Essential Facts - ESA There will be a "tipping point" where gaming becomes the dominant form of entertainment in terms of absolute numbers and time spent.

Innovation in the gaming market is very different from other media segments, with a much stronger contribution from consumer communities:

• Consumers have historically been the key innovators. One distinctive characteristic of the gaming sector and community is that innovation is often driven by consumers, rather than major developers. This has been a trend throughout the sector’s history. For instance, in the 2000s, the MOBA genre (#1 today with games like League of Legends and Dota 2) emerged as players’ modifications to Warcraft 3. Similarly, in the late 90s, Valve's highly successful Counter-Strike franchise originated as a user modification of their Half-life game.
• Platforms today are making innovation easier. User-generated content in games is set to grow with platforms like Roblox and Minecraft actively promoting it. Examples include Squid Game’s success leading to a similar game on Roblox, and advancements in game engine technology by Epic (Unreal) and Unity making game creation easier for players.
• Publishers are on the front foot adopting innovative ideas from users. Game publishers are often quick to adopt and commercialize innovations from players. The MOBA genre is a prime example, as players created it first, but then publishers led incorporation of unique features from MOBA into first person shooter (FPS) games like Activision-Blizzard's Overwatch which included multiple heroes with unique skills.

It is expected that this trend will continue, especially with platforms like Roblox and Minecraft that ease game development and innovation for gamers.

The gaming industry is already highly consolidated. Further consolidation is expected to continue in the medium-term as major publishers, media companies, and technology firms acquire studios and other gaming-related assets on a global scale (Exhibit 8). More than 650 gaming M&A or investment deals were announced or closed in the first six months of 2022, and gaming companies such as Epic Games raised billions on the strength of the market. 19 19 A.list Daily “Analysts: Gaming Gaming Growth Expected In 2023 Despite Recession Fears” Notes: 19 A.list Daily “Analysts: Gaming Gaming Growth Expected In 2023 Despite Recession Fears”

Today top-10 players already control more than 70% of the market. The top 3 players (Tencent, Sony and Microsoft) 20 20 Newzoo “ Top 25 Companies Game Revenues Notes: 20 Newzoo “ Top 25 Companies Game Revenues comprise ~40% (contingent on Microsoft completing the acquisition of gaming company Activision-Blizzard).

Game publishers follow two main paths in their M&A strategies:

1. Consolidation of game development Gaming companies are consolidating to achieve economies of scale and support the increasing costs of game development. Such scale also facilitates experimentation with new intellectual properties to ensure success in the medium- and long-term. Both Microsoft and Sony are building gaming ecosystems:

• Microsoft's move to acquire Activision-Blizzard is a direct play to strengthen its gaming portfolio, which already includes cloud services and the Xbox console, and to provide a seamless gaming experience across mobile devices.
• Sony is focusing on acquiring studios such as Bungie, and mobile developers like Savage Game Studios, to expand its offerings and enhance its console business with a single pass experience.
• Other players in the industry are also acquiring promising studios, sometimes as a means of entering the mobile market. For example, Take-Two and Zynga have both acquired studios, and EA has acquired Glu Mobile.

2. Extension of internal capabilities

As games become more complicated, game publishers also seek to extend their reach along the value chain, especially parts related to technologies embedded in the games.

One good example is in-game advertising. As games become even more immersive, lengthen their life cycles, and encourage players to spend more time, it highlights the opportunity to leverage space in PC/console games for advertising. Currently games either do not have ads (mostly AAA PC/console games) or feature pre-agreed product placement. However, new technology can allow personalized advertising in real time, and thus boost games’ advertising revenues (e.g., a billboard in a game can contain actual ad that is personalized to a player). Game engine Unity and app economy developer AppLovin's attempts to merge with IronSource illustrate this trend. 21 21 Calcalistech “Unity chooses ironSource merger over AppLovin takeover” Notes: 21 Calcalistech “Unity chooses ironSource merger over AppLovin takeover”

Another example is motion tracking and facial animation technologies. As PC/console games rely on these technologies to build an immersive experience, access to advanced and unique solutions is a critical success factor. That is one of the reasons behind game publisher Take-Two Interactive’s acquisition of Dynamixyz, a company focused on cutting-edge facial recognition technology.

Gaming is not just affected by technologies, but also drives innovation and experiments with new offerings. This is especially true in areas like cloud solutions, the Metaverse, and blockchain:

• Cloud-gaming. Enterprises employ cloud solutions to lower IT costs, but consumer use is limited. Popular MOBA, FPS, and BR games requiring low latency may drive increased consumer cloud adoption as it eases end-user device requirements and allows top game play even with inexpensive hardware. This trend is long-term, requiring significant infrastructure investments like 5G networks and edge data centers. Gaming company growth and market growth may accelerate consumer adoption of cloud technology once such infrastructure is in place.

The Metaverse. The concept is a virtual world with its own economy, built upon Virtual Reality, Augmented Reality, and Non-Fungible Tokens (NFT). Gaming has a significant influence on the Metaverse, having first created the concept decades ago. Games like Second Life and World of Warcraft established compelling places for players to spend time and multiple digital items to acquire, which the Metaverse seeks to re-establish with more advanced technology. Today there are many potential Metaverse use cases, though games remain central to driving early adoption and attracting a wider audience. Recent examples of the intersection between gaming and the Metaverse:

• Since 2020, the music industry has taken new notice of platforms like Fortnite, Roblox, and Minecraft. Epic Games’ Fortnite has held virtual performances for Travis Scott, Ariana Grande and Charlie Puth – with players convening in-game to attend a concert.
• Part game platform, part game creator, Roblox (which allows users to create their own “worlds” and games for people to interact with) has nurtured a community of 164 million consumer-creators with over 58 million DAU, 22 22 Statista Notes: 22 Statista developing and sharing content with one another.

In addition, the gaming sector is instrumental in making the Metaverse a reality. The Metaverse faces several challenges, such as enabling multiple people to interact in virtual reality simultaneously. Gaming technology is crucial in overcoming these challenges. For example, game engines like Unity or Unreal Engine are essential for real-time 3D rendering, while rendering and tracking technologies like OptiTrack or Vicon are vital for proper functioning of VR cameras.

• Play-to-Earn Gaming (NFTs/Blockchain). In 2017, CryptoKitties introduced a new model for gaming with NFTs. Dapper Labs raised $725M in 2022 for the game . Web3 games, like CryptoKitties and NFL Rivals, use blockchain and a decentralized approach but face challenges with speed and usability. The play-to-earn gaming ecosystem saw a drop in user activity in 2022, but companies are still working to create games that reward players with tokens. The play-to-earn crypto games' success is worth observing closely.

How do these play together?

Many factors and different dynamics move the gaming market. Microsoft is a one example to look at as we try to imagine the gaming offering of the future. The company is currently building on all the key trends, with the result that:

• Xbox is one of the leading consoles, with multiple games offered.
• Activision-Blizzard can enhance the games offered.
• Minecraft is the source for user-generated content in games and innovation.
• Microsoft Cloud Azure provides infrastructure to boost the cloud gaming offering.
• HoloLens allows experimentation with the Metaverse, building on gaming use cases and technologies.

Its portfolio of assets allows Microsoft to create a single convenient subscription to access all of its offerings at a better value price for the consumer. It also gives Microsoft a "flywheel" with multiple data and income streams increasing the value of its overall offering.

Entering the Playing Field

Companies from many different industries are expressing strong interest in entering the gaming sector. Their rationale ranges from opportunistic investments to participate in the growth opportunities, to strategic investments to drive synergies with core businesses through IP and technology, brand positioning, or additional monetization.

Investors can consider gaming companies to diversify their portfolio and participate in the promising sector growth.

• A strong catalyst to growth was not only the increase in demand for gaming during the pandemic, but also the U.S. money supply increase which led to a 2020 spending rally. Investment in gaming went from $1.6 billion in 2019 to $4.7 billion in 2020 23 23 Maddyness “Pitchbook Data” Notes: 23 Maddyness “Pitchbook Data” .
• Gaming focused VC funds are growing around the world. U.S. based VC Bitkraft raised $165 million against a $125 million goal in 2020. Luxembourg based Hiro Capital and an Indian based fund called Lumikai similarly exceeded their targets. Venture capital firm Griffin Gaming Partners has launched a mammoth and oversubscribed $750 million fund focused on the gaming business and adjacent sectors such as tools and platforms, including the fast-emerging blockchain-based segment 24 24 Forbes Notes: 24 Forbes .

Media companies can benefit from incorporating gaming IP and broader gaming concepts into their offerings. Netflix serves as a prime example of this strategy, having:

• Created multiple videos based on popular game IPs (e.g., Witcher, Arcane, Cyberpunk 2077) to attract new audiences and keep them engaged.
• Included exclusive games in its subscription video on demand offering, like Minecraft: Story Mode and Stranger Things 3: The Game. It also boosted its gaming division with the Next Games acquisition, already offering 48 games on mobile.
• While the success of this strategy is yet to be determined, it shows a potential opportunity for media companies to explore.

IP owners can benefit from acquiring gaming companies and using their IP to create a strong, diversified revenue stream across various channels. For example:

• Tencent grew the popular game League of Legends in China, and created an ecosystem where the same IP is leveraged across different media channels and licensed to both internal and external parties for e-commerce and other purposes.
• Disney actively leverages its IP across media platforms, including its amusement parks and Disney+ subscription bundle.
• IP owners can also follow this trend and build on it, as seen with the example of The Witcher, which started as a book, became a game, and then a successful TV show.

Technology companies can find synergies between their own assets and the gaming industry by creating a compelling ecosystem value proposition. For example:

• Amazon has leveraged its acquisition of Twitch, a popular live streaming platform for gamers, by incorporating it into its Amazon Prime offering. This not only provides benefits for gamers, but also increases spend and boosts retention among its members.
• Apple has bundled its various services, including music, video, magazines, gaming, fitness, and cloud storage, into one subscription in order to boost retention. They have also invested heavily in a mixed reality headset, with gaming being a key use case.
• Facebook -owned Meta has infused game streaming into its social network as a type of content that users can browse for and see in their thread. It also has the most advanced VR headset and actively promotes Metaverse topics, where gaming is a critical use case.
• ByteDance , the company behind TikTok, is planning a strong push into gaming, 25 25 Reuters Notes: 25 Reuters exploring the opportunity to drive more gaming content on its platform through dedicated challenges with game-related themes. It has already acquired Moontoon, which developed a very popular game called ML:BB (Mobile Legends Bang Bang).

Telecom operators (telcos) have various options to enter the gaming field, though selection largely depends on their specific circumstances. For example:

• Partnership with leading gaming companies to provide customers with access to exclusive game releases, in-game advertisements of the operator's own products, direct carrier billing (DCB) for popular games, or making unique access to some games a part of their tariffs (e.g., KPN in the Netherlands offers tariffs with access to in-game items).
• Cloud gaming offering by partnering with international providers, leveraging existing network infrastructure (e.g., LG U+ partnered with NVIDIA, Deutsche Telekom offers a cloud gaming service offering with over 100 gaming titles).
• Own gaming business, though there are limited successful examples among telcos (e.g., Telkomsel launched Shellfire, a popular mass online battle arena and FPS game).
• Investments in esports to promote the brand to a younger audience (e.g., SK Telecom built their own esports team that has won multiple global tournaments; Ooredoo followed the same path in the Middle East)

Irrespective of the sector, one important factor to consider is the geographical market for such investments. While China and Western markets seem to be obvious candidates, the Middle East has growth potential driven by two fundamental factors. Firstly, its demographics trend toward a young digital savvy audience that actively consumes gaming content. Out of 35M people in Saudi Arabia, 23.5M (67%) identify themselves as game enthusiasts. This creates a sizeable market not only for gaming, but also for many brands that target this audience.

Secondly, we see substantial governmental efforts to establish a thriving gaming industry. For instance:

Saudi Arabia’s Public Investment Fund (PIF) invested over $3 billion in 2022 to develop the sector, which is part of a significantly bigger $38 billion commitment by PIF to be deployed by its company Savvy Games Group (SGG) for M&A only. 26 26 Alarabiya Notes: 26 Alarabiya Savvy already started utilizing those funds with acquisition of game developers (8.1% stake in Embracer Group 27 27 Owner of 120 game studios and IP rights for Lord of the Rings Notes: 27 Owner of 120 game studios and IP rights for Lord of the Rings for $1 billion, Scopely 28 28 Develops and publishers free-to-play games such as Marvel Strike Force Notes: 28 Develops and publishers free-to-play games such as Marvel Strike Force for $4.9 billion), leading esports events operators globally (ESL and FACEIT for $1.5 billion) 29 29 Operates major esports events in multiple games such as CS:GO, Dota2 and multiple mobile games Notes: 29 Operates major esports events in multiple games such as CS:GO, Dota2 and multiple mobile games and China (became the largest equity holder in VSPO 30 30 Operates major esports leagues in Asia (King Pro League, Honor of King) and has long-term partnerships with all key Chinese game publishers (Tencent, Garena and Krafton) Notes: 30 Operates major esports leagues in Asia (King Pro League, Honor of King) and has long-term partnerships with all key Chinese game publishers (Tencent, Garena and Krafton) for $265 million), and technology companies (Vindex). 31 31 Offers content production for events and analytics in gaming, streaming and esports Notes: 31 Offers content production for events and analytics in gaming, streaming and esports In addition, SGG has multiple other initiatives that will be delivered through five of their subsidiaries: 32 32 Venturebeat Notes: 32 Venturebeat

• Nine66, a professional services provider for game developers
• VOV, an architectural firm specializing gaming and esports venues
• An upcoming studio that will publish mid/core games
• ESL FACEIT Group (EFG), the esports tournament conglomerate formed from the merger between ESL Group (ESL and DreamHack) and FACEIT
• Savvy Games Fund – Savvy’s investment arm that will focus on establishing developers in Saudi Arabia.
• Abu Dhabi Gaming aims to make Abu Dhabi a leading hub for gaming and esports. They collaborate with regulators on dedicated legislation and provide infrastructure for companies. AD Gaming partners with industry players like Ubisoft and Unity, offers in-house support, and organizes events like Yas Gaming Month to build the community. 33 33 Abu Dhabi Gaming Notes: 33 Abu Dhabi Gaming

Looking Forward

Satya Nadella, CEO of Microsoft said: “Gaming is the most dynamic and exciting category in entertainment across all platforms. We’re investing deeply in world-class content, community, and the cloud to usher in a new era of gaming that puts players and creators first.” 34 34 Microsoft News “Microsoft to acquire Activision Blizzard to bring the joy and community of gaming to everyone, across every device” Notes: 34 Microsoft News “Microsoft to acquire Activision Blizzard to bring the joy and community of gaming to everyone, across every device”

Gaming has been on the rise and is destined to outperform other sectors in the media industry in the next decade. And while gaming is itself evolving quickly, it will also shape other media and technology sectors due to its:

• Access to a wide audience (especially Gen Z) and new ways of interacting with them
• Valuable IP
• Immersive content and storytelling
• Advanced technology stack that can enable a variety of Metaverse and other use cases.

As part of BCG’s series of gaming reports, our next report will focus on Esports, an important part of the sector that is revolutionizing the way consumers engage with video games.

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Gamification in Tourism – Benefits & Use Cases

Tracy Watson

The tourism industry has been one of the hardest-hit sectors by the COVID-19 crisis. Not only are people restricted in the places they can visit, but they are also not motivated to get back out there and start exploring. Therefore, to avoid shutting down completely, many museums and other sites have developed travel and tourism games to peak people’s interests and motivate them to start coming back. Today we will take a closer look at gamification in tourism and how it could be a viable solution to gaining new visitors and retain existing ones. 

What is Gamification Tourism?

Gamification in tourism uses gaming methods to digitally engage with consumers and motivate them to achieve specific goals or objectives. This significantly increases the overall experience since it makes the entire visit to a particular site a lot more fun, engaging, and interactive. Since pretty much everybody has a smartphone or tablet nowadays, it is easy to start engaging with visitors via: 

• Challenges – Ask people to solve a puzzle or visit certain areas of the site and submit a photo to complete that aspect of the assignment. 
• Score – When you assign a certain task the user needs to complete, it stimulates them to collect points along the way. They also know how well they are advancing towards the end goal. 
• Leaderboards – People love to compete with their friends and are motivated to score higher, which adds even more fun to the experience. 
• Rewards – These can be virtual or real ones. If the user accumulates certain points, they can unlock new levels or be awarded with badges and titles. 

These are just some of the ways  gamification services  can help tourist sites attract new visitors. Now, let’s take a look at all of the benefits gamification can offer. 

More Engaged Visitors

We touched on this a little bit already, but we mustn’t underestimate the immersion level that games can offer. This way, they will be able to enjoy the full experience of being at a particular venue or site and, by doing so, you will make this trip an unforgettable experience. Since people are so hesitant to start exploring new places, you need to provide them with some incentive, and by giving them an experience they will never forget will go a long way towards encouraging them to visit new places. Keep in mind that gamification can be used to make the trip more fun, but it can serve many educational purposes as well.  Serious game development  helps visitors or students learn more material and retain it through gamification mechanics. 

Increased Visitor Loyalty

When somebody is truly satisfied with their experience, they are much more likely to come back. This could be accomplished in many ways. For example, parents want to take their children to the museum, but they are worried that the kids will be bored and want to go home soon after arrival. If the museum offers interactive games that keep the children motivated and make the entire trip more fun, and take some of the stress off the shoulders of the parents, then they are much more likely to visit this museum as well and recommend it to their friends. 

Improved Marketing for Hospitality and Tourism

As we mentioned before, tourism and hospitality have been the biggest ones impacted by all of the lockdown restrictions. They are using all kinds of marketing methods to motivate people to start traveling. We already talked quite a bit about gamification in tourism, so let’s focus on the hospitality sector. Gamifying reward programs help brands increase customer loyalty via better engagement and by making their overall stay a pleasant one thanks to gamification. While this is not a new concept for the hospitality sector, incorporating digital tools and social media requires a new and innovative approach. 

Start Using Gamification to Motivate Potential Visitors 

If you are looking to increase the attendance of a particular venue or improve the effectiveness of your travel digital marketing a boost, consider using gamification. This new approach helps you build stranger, longer-lasting relationships with your customers. Nowadays, people are looking for new experiences, and brands who can deliver on this are sure to win the business of their clients. The traditional advertising methods will not be effective in helping you get through this crisis, which is why you need to try a new and innovative approach. Start gamifying the user experience today and see for yourself the difference it can make. 

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Horizontal Digital

How the gaming and hospitality industry is evolving the way they connect with customers

by Arturo Mendiola

Worldwide, the casino and hospitality industries are expected to grow at a rate of 5.14%

The continual rise and introduction of newer, bigger and more enticing property options, and the competition flooding the market has left guests with an abundance of options.  Casinos and resorts are continually finding new, innovative ways to attract and retain guests – from exciting entertainment and dining options to incentivizing loyal gamers with special perks and rewards. 

Below are the current trends affecting the gaming and hospitality industry today, and the impact that they will have on guests: 

1. Sports betting remains strong  

Due to a high sportsbook win percentage and solid growth in existing markets, sports betting set a new quarterly revenue record of $1.68 billion, up 80.6 percent year-over-year.  This surge in demand has spurred technological advancements, such as mobile betting apps and live-streaming services, enhancing the overall gaming experience. 

2. iGaming popularity shows no signs of slowing down  

There was a significant drop in patrons visiting brick-and-mortar casinos in the U.S. in 2022 following COVID-19 and growing economic instability. This decline of on-property visits has led to a 15% increase in opening online casinos. (Slotegrater).  iGaming offers convenience, accessibility, and a variety of games attracting new players. On the other hand, traditional casinos face increased competition, necessitating diversification and technological investment.  

3. A wave of younger demographic players is on the rise and older audiences are on the decline  

As noted above with online gaming and sports betting, mobile gambling has enabled younger digital-native players to enter the market. Casinos with online gaming and sports betting are seeing a move by younger demographics to brick-and-mortar properties due to cross-pollination from digital and traditional database sources. (Tribal Gaming and Hospitality). The increasing presence of younger players is likely to drive the demand for more technologically advanced and innovative gaming experiences.  

4. Self-service and mobile technology are now baseline  

The integration of mobile reservations and check-in/out features has become an indispensable part of the guest experience in the hospitality industry. With the advent of smartphones and the growing reliance on digital solutions, guests now expect the convenience and flexibility that these mobile services offer. Hotels, resorts, and other accommodation providers have recognized this shift in consumer behavior and have responded by adopting these technologies to stay competitive. Mobile reservations and check-in/out features are table stakes for guests as part of the experience.  

5. Lodging rates have gone up, but amenities have not  

Between January 2022 and January 2023, hotel rates have increased by 54%. This is largely attributed to high-demand and inflation. With increased competition in the hospitality industry, guests have more choices when it comes to accommodation options. If they feel that they are paying more for the same amenities, they may be more inclined to explore other hotels or lodging options, leading to reduced customer retention and loyalty. 

6. Leisure travelers want to experience more out of their destination  

According to American Express Travel, travelers are seeking vacations with personalized experiences 88% of respondents say they like to seek out local experiences and learn about culture when they travel. Providing personalized experiences presents opportunities for hotels to not only gain customer loyalty, but also to upsell additional services and amenities.  

Connected guest experiences, a sure bet

While the industry will be constantly evolving and innovating, placing guests at the center of the business strategy and building a foundation of truly knowing your customers is key. This includes knowing their preferences and interests, as well as where they’ve been with your brand experience, including past stays, their favorite amenity or game.  

Which is why collecting, mining and analyzing data to make intelligent decisions to inform guest journeys will give your brand the best chances of positioning itself as the preferred destination and/or property.    

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Casinos worldwide - statistics & facts

Casinos in the united states: placing all bets on las vegas, is macao the new las vegas, key insights.

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Top selected casino companies worldwide in 2022, by revenue

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• Premium Statistic Key information on the global casino and online gambling industry 2023
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Gaming machines and table games

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• Basic Statistic Gross gaming revenue of casinos in the U.S. 2022, by state
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Casinos in Macao

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Impact of Gaming in Nevada

The economic contributions of the gaming and resort industry are second to none.

The tourism industry was responsible for over $90 billion in total economic output during 2022. Although employment in the industry is still recovering from the COVID-19 pandemic, the industry was responsible for supporting over 385,000 jobs and more than $21 billion in wages and salaries. Overall, the tourism industry's impact is roughly 43 percent of the state's total gross domestic product, 23 percent of the state's total wages and salaries and 27 percent of the state's employment.

The gaming and resort industry is Nevada's most vital sector, supporting more jobs, paying more wages and salaries and generating more economic output than any other sector.

Total Economic Impact

Economic Impact

43% of state's total gross domestic product

Wage Impact

23% of state's total wages and salaries

Job Impact

27% of state's total employees

The Leisure & Hospitality Industry is the Largest Employer in Nevada

The leisure and hospitality sector directly employs 330,000 people. While the overall count of employees is still down from pre-pandemic levels, recovery is expected to continue.

Nevada Employment Distribution

Fiscal Year 2022

The Ripple Effect of Employment Through Other Industries is Impressive

The tourism industry's reach extends into other sectors of the economy, ranging from professional and business service employees to transportation providers.

Resorts Spend More on Health Insurance Than Any Other Industry in Nevada

The tourism industry is responsible for not only the largest number of employees in the state, but it also insures the largest number of employees in Nevada. Overall, the leisure and hospitality sector spends more than $4,000 per employee annually on health insurance.

Total Payroll Expenses

Total Payroll Wages and Salaries

78.6% of payroll expenses

Total Payroll Employee Benefits

21.4% of payroll expenses

Resorts Continue to Become Less Dependent on Gaming

Gaming revenues are at an all-time high in Nevada; continuing this pace appears unsustainable as stimulus funding subsides and economic concerns loom on the horizon. Nevada experienced the largest increase in gaming revenue in history, reaching a historical peak of $14.6 billion in fiscal year 2022. Despite impressive activity, resorts are less dependent on gaming than a decade ago. Although gaming revenues trended north in 2022, the industry itself continues to diversify, offering a wider range of amenities and experiences for consumers.

Gaming Revenue as a Share of Total Revenue

Gaming Revenue

Share of Total Revenue

Tourism's Rebound is Accelerating the State's Broader Economic Recovery

Despite overall visitation lagging pre-pandemic levels, Nevada is experiencing all-time highs in terms of airport passenger volumes, average daily room rates and consumer spending.

All-Time Highs During the Recovery

LAS Airport Passenger Volume

Average Daily Room Rates

Visitor Spending

The Resort Industry Funds More Public Services Than Any Other Industry in Nevada

The tourism industry is responsible for roughly $2.1 billion in industry-specific taxes and fees that support state and local governments.

Industry Impact on State General Fund

Total General Fund Tax Revenue

Hotel-Casino Industry Contributions

Hotel-Casino Industry Share of Total

The Industry's Contributions Ensure a Low-Cost Operating Environment for All

Nevada residents benefit from the tourism industry and its fiscal contributions by reducing each household's tax burden by approximately $2,700.

Although visitors contribute substantially to Nevada's overall public funding, they do not require the same resources as full-time residents.

Tax Burden Reduction

The resort industry is responsible for nearly $23b of capital investments on the horizon.

Southern Nevada has $20 billion of tourism-related investments either planned or under construction, and Northern Nevada plans to invest an additional $3 billion. New investments help to stabilize the economy and create jobs.

Nevada's Tourism Development Pipeline

Planned and Under Construction Tourism Investment Expenditures

Planned and Under Construction Tourism Investment Projects

Share of Projects Located in Las Vegas

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Beyond Gaming: How VR Can Help the Ailing Tourism Industry

F ew industries experienced the sudden, massive impact of Covid-19 quite like tourism. In the earliest days of the pandemic, flights, cruises, and hotel reservations around the world were abruptly cancelled, leaving major tourist hot spots eerily void of the crowds that economically sustain them. According to the  World Economic Forum , the global tourism industry is estimated to have lost close to $1 trillion in 2020 alone. And while it still may be many months before travelers feel comfortable enough to book a cruise or plan that European vacation, tourism marketing folks are looking to a high-tech tool to keep these destinations top of mind: virtual reality (VR).

When most folks think of VR they likely picture video game designers creating some alternate fantasy universe. But the technology has grown far beyond gaming. A PwC report estimates that 23.5 million jobs worldwide will use VR for training, work meetings, or to provide better customer service by 2030. The global VR category is forecast to grow to $14.8 billion by 2023, up from $3.9 billion in 2018, according to ARtillery Intelligence. Using VR in tourism is a natural offshoot of this growth as the industry scrambles to recover from the crippling effects of the pandemic.

VR technology typically involves the use of a VR headset, which helps to virtually transport people to other places—both real and simulated. Users can take tours of their favorite cities and visit national landmarks, or even explore the  surface of Mars . (After the pandemic put the kibosh on a long-planned trip to Italy, I consoled myself with a VR-enabled "visit" to Venice, exploring the streets, visiting old churches, and of course, going for a gondola ride.)

That virtual trip—and presumably the subsequent desire to make it a reality—is what’s really at the heart of VR’s role in tourism. Yes, it can provide an entertaining escape for folks exhausted from the isolation and boredom of the pandemic. But it can be especially useful in helping consumers plan for an actual vacation again. In other words, it has the potential to enhance a person’s desire to go on a vacation, rather than be a wholesale substitute.

“The tourism industry isn’t interested in promoting ways to not travel,” says Daniel Nahoopii, president of the  Travel and Tourism Research Association . “But VR is a really good way to explore in detail where they want to go, and to see, in real time, how that location is faring, especially since we’re still dealing with the pandemic.”

A number of countries are taking that approach. Germany, for instance, has introduced several immersive offerings to spotlight the country’s potential as a vacation destination. The German National Tourist Board (GNTB) created 360-degree video “trips” across the country as well as its Baltic and North Sea coasts that can be accessed using an Oculus Rift headset. Another set of videos, that use Microsoft’s Hololens smartglasses, take travelers to some of the country’s most famous castles and palaces.

“Digital applications cannot, and are not intended to, replace the experience of real-world travel,” GNTB CEO Petra Hedorfer told the BBC late last year. “But VR and AR (augmented reality) applications are essential elements in keeping interest in Destination Germany alive during travel restrictions.”

These more immersive VR visits are also a vital tool in helping consumers get comfortable again with traveling by giving them a detailed look at a city or other destination. Travelers can see health and safety measures being taken, Covid-19 protocols for check-in at a hotel, and even the boarding process for a cruise ship. “VR technology can be a cost-effective way to help people feel comfortable with traveling again,” says Nahoopii.

Using this technology to generate interest in tourism destinations can solve two challenges, experts say. First, it can help to reignite the appeal of existing markets, and expand interest in new places. But it can also allow people to explore more inaccessible sites or allow them to “visit” places that are environmentally fragile, such as coral reefs. “VR offers the potential to create substitute experiences that may be extremely useful for heritage and natural preservation,” says Ralph Hollister, a travel and tourism analyst, and author of the report, “Virtual Reality in Travel & Tourism.”

Growth in the VR market has become easier with the introduction of lower price headsets. When Facebook bought VR headset maker Oculus in 2014 and introduced the Oculus Rift headset two years later, the nearly $600 price tag was a bit much for most consumers. Since then, other tech companies have jumped in, including Google, Samsung and Sony and lower-priced VR headsets have hit the market.

Virtual travel will likely never replace real travel, but the use of VR technology in tourism looks like it’s here to stay—even after travelers feel comfortable enough to start exploring the world again. “Destinations will continue to use VR to promote their offerings, but they’re always going to tell consumers that in-person is the best way,” says Nahoopii. “VR is whetting their appetite.”

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Susan Caminiti

Susan is a writer and senior editor whose work covers a wide range of business and social topics including corporate profiles, personal investing, entrepreneurship, health and wellness, work/life issues, and wealth management for both editorial and corporate clients. She is a former staff writer for Fortune magazine and her work appears in Fortune, Fortune.com, CNBC.com and in a variety of other print magazines.

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Pass the controller. London-listed video game services company Keywords Studios is weighing a £2.2bn offer that more than doubles its undisturbed share price. On Scotland’s east coast, Dundee, once famed for its production of jute, is styling itself as the gaming capital of Europe , replete with cluster effect and specialised university courses . Shares in Cambridge-based Frontier Developments, home of big budget games, such as Rollercoaster Tycoon , have more than doubled in the past two months.

Britain’s $5.5bn gaming industry, which took off after the introduction of tax breaks in 2014, could use a change in fortunes. The boom sparked by Covid-19, which saw more players spend more time gaming and prompted a record re-rating in valuations, unwound sharply last year.

Companies were left with bloated cost bases, designed to keep abreast of the 10-20 per cent annual growth rates of 2020 and 2021. They had other battles on their hands. Big shot titles, such as Gran Turismo 7 , postponed by Covid, entered the market, pulling eyeballs away from less glitzy indie games. Microsoft and Sony cut contributions to developers from subscription deals.

Result: investors took a bath as the flurry of turn-of-the-decade listings, and concomitant lofty growth expectations, started to look as fantasy-like as some of the games. Cash ran dry — witness tinyBuild’s $12.3m fund raising in January — and rich multiples shrank faster than Super Mario encountering an enemy.

Hence, while that offer for Keywords looks rich at a prospective price/earnings ratio of 24 times, it basically unwinds the losses of the past 13 months or so.

Still, as putative buyer EQT’s interest suggests, the plot lines are changing. First up, swingeing cost cuts. MIcrosoft’s gaming division is cutting 1,900 of its 22,000 staff; Riot Games and Twitch are all pruning headcount. Industrywide, maybe a tenth of workers will be shed this year.

Other steps are under way to shore up balance sheets. Frontier Developments this year sold the rights to hit game Roller Coaster Tycoon 3 to Atari for $7mn, lifting its cash position to £23.4mn at the end of March.

Next, companies are reining in their ambitions and shrinking games pipelines. This is not as detrimental to earnings as it sounds: as in the music industry, back catalogues have a long shelf life. Patrick O’Donnell, analyst at Goodbody, reckons some 60 per cent of player engagement is in titles more than six years old.

Besides, it still leaves ample footprints. Indie developer Team17, for example, bought Ireland-based StoryToys in 2021, bringing in the pre-schooler market. Others have diversified into educational games and simulated experiences, like train driving.

Keywords itself occupies a more peripheral space; it provides services to gaming companies, making it a useful proxy for the sector. Investors, fearing AI would eat its lunch, have been selling down the stock. That looks overdone, at least in the short term. 

The group’s long acquisition streak — more than 65 since floating in 2013; of which 22 were bought for a total €572m since the beginning of 2020 — means it has legions of engineers and facilities in 26 countries. That leaves it ready to take on the work that pruned-down studios will now be more minded to outsource, such as translation, quality control and ensuring seamless play when users switch to a different device.

Clearly, private equity sees value. EQT’s bid for Keywords is its fifth. Just a few months earlier Europe’s CVC Capital bought  UK video games maker Jagex, home of the long-running RuneScape franchise, for about £910mn in a private equity flip. Game on.

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Gaming tourism

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The Oxford English Dictionary defines gaming as playing games for stakes. Early usage of the word was almost always pejorative, but today it is used in a more neutral fashion. Sometimes used as a synonym for gambling, gaming implies notions of skill and strategic management of gains and losses not present in gambling.

History and availability

Gaming has long been part of human society. People play games of chance for intrinsic reasons (stimulation, risk-taking, achieving a sense of accomplishment) and for extrinsic reasons (seeking wealth, gaining status, creating a setting for desired social outcomes). However, in many parts of the world, the ability to engage in gaming was highly restricted with various levels of prohibition emerging in the nineteenth century. Since the 1970s, these restrictions have been relaxed in many jurisdictions, leading to wider availability. This pattern of geographically restricted availability made gaming an important part of the tourism experience,...

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Latitude varies from −90° to 90°. The latitude of the Equator is 0°; the latitude of the South Pole is −90°; the latitude of the North Pole is 90°. Positive latitude values correspond to the geographic locations north of the Equator (abbrev. N). Negative latitude values correspond to the geographic locations south of the Equator (abbrev. S).

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Elektrostal , Moscow Oblast, Russia