In the metaverse, people are buying land, creating digital representations of themselves, and interacting with others. While many industries are dipping their toes into this new world, experts say the gaming industry has become a major mover in the space. A new study reveals what is possible for the gaming industry in the next dimension. Scott Porter, EY media entertainment consulting services leader, joins Cheddar News to discuss. 

Cheddar's News Wrap

How the Metaverse Impacts the Gaming Industry

Welcome back to cheddar new snap Now, whether you understand it or not, the metaverse is here, people are buying land, creating digital representations of themselves and interacting with others in this three dimensional virtual realm, while many industries are dipping their toe into this new world, experts say one particular industry has become a major mover in the space gaming and a new study reveals what is possible for the gaming industry in the next dimension A. K. A. The metaverse joining me now to discuss is scott porter. Ey media entertainment consulting services leader and scott give us an overview of how the gaming industry has evolved just in the past decade and where we are right now. Yeah, no, it's gaming has really experienced a significant growth over the last 10 years. Today we have almost three billion gamers around the world. And um what we've seen in just the last couple of years is there has been this explosion of gaming content on mobile platforms. And so as you look at the trends, we we envision that this is going to continue to be the case. Um you are seeing more widespread adoption of the mobile games that are out there. It's also bringing in its broadening out the community that it's attracting. And so now you have what we would call the nontraditional gamers, you have more women and young women who are now participating in the games. And so we think that this is going to continue to be the trend in the future. It has definitely become one of the fastest growing segments within the media entertainment sector. So you surveyed a bunch of gaming executives, what kind of questions did you ask? What kind of answers did you get? Yes. So um back in late 2021, uh my colleague Adrian and I we we were talking about what do we think is gonna happen to gaming in the future, especially in light of this now uh kind of the adoption of the mobile platforms now that everybody has a mobile device. And as we were going through that working with Oxford Economics, We started to uncover that there was a lot of discussion around what gaining in the metaverse was going to look like and how one was driving the other. So we went out, we surveyed 200 companies and the executives of those companies globally and the staff were quite revealing. So 97 believe that the gaming sector is in the center of everything that is metaverse related. So it is the technologies that the gaming companies are developing that are driving what we're starting to now see in these digital spaces. Um Then the uh you know, the companies are also recognizing that as you have more and more competition, they're being forced they they have to come up with new gaming experiences. So 83% of the survey respondents said that you know, they are being forced uh to innovate um and to come up with those experiences to keep people interested in on their platforms. So it was a we we wanted to understand whether or not this had staying power, was this just gonna be a just a period and then it was going to quickly die out. And what a lot of the executives came back with is that they all recognize gaming has been in this metaverse kind of concept for some time. You have the interactive games like Fortnite and roadblocks. Um And you know, it is a way in which it allows people to experience kind of this community. Um There's more time that's being spent on these platforms and you know, it's again the trends that we see happening and over the last two years within the pandemic that only accelerated it. It was a cheap form of entertainment and the minutes and and actually hours on the platforms increased drastically over the last two years alone, as you know, when it comes to gaming, there's a big focus on digital assets. So how do N. F. T. S. And things of that nature play into this? So it's interesting. N. F. T. S. We've heard a lot about them recently. We've gotten some good press and some bad press uh in light of what's happened here just in the last couple of weeks with the crypto markets and the N. F. T. Markets. Uh there's a lot of skepticism out there, but the the N. F. T. S. Are these non fungible tokens in the game environments? They are the wearables, they are the digital assets that actually enhance the gameplay. And so while when we look at the current trends of the current noise in the system that, you know, N. F. T. S. Are are a bad, you know, investment. Um that is really um you know, a different story than what you see in gaming that is actually enhanced uh the uh the experience of the players, it's actually drawing people into gaming. Um they're allowed to actually take on, you know, a different personality and uh and that's what makes that create creativity is what makes it so exciting to be part of it. So in the report, you said that there was three steps that these companies have to take to be successful in the future of gaming. What are those three steps? So when we we think about it, you know, first now um companies are going to have to really understand, you know, what role they're going to be in in this metaverse. So um it's it's really what can gaming, due to, you know, create a clear competitive advantage. Uh And so what is that metaverse vision going to look like, and once you've got that worked out, it's going to be then the operating model and again with kind of what we've seen here in the last few weeks, um I actually would say that it's less about um you know, companies going away, I think it's gonna be more about how companies are going to adapt to the new realities that are out there and how that is going to help them then be competitive uh expand their customer base, drive new revenues. Um And then it's you know, you've got these other things around, how do you then utilize the content that you've been collecting the start of the data that you've collected and you know, how is that going to help you gain insights into what are the preferences of your customers, your player base and what can you do to offer them a better experience? So when it comes to challenges, I mean gaming you think it's easy but their supply chain challenges, there's also constraints on say gpu s I mean you can go and try and buy a PS five. Good luck. So what kind of challenges are the gaming industry facing not only now with traditional gaming but also gaming in the metaverse. As as we were talking to you, it's becoming hyper competitive. And so one of the big challenges that the companies are gonna be facing is how do you attract and retain the talent that you need to offer that compelling product and service to your consumers so that we're seeing a lot of that being a you know, area of focus for the gaming companies. The second area is there's a lot of concern around data privacy and the cybersecurity especially as you start having more economic activity taking place, how are you going to be able to protect the players that are on your platform? Um and then the third is, you know, when you look at the spaces and what people doing, there are unfortunately some elements that are taking hold within the gaming communities that it isn't always the safest environments for people to operate in. And so one of the things that companies and gaming companies and those that are actually gonna be entering into these digital landscapes are going to have to really focus on is how do we protect uh the individuals who are there playing, looking for engagement, looking to participate in these communities and have them in a safe environment because if you do not do that, they will leave and there were going to be other options out there for them to go to that's right retaining and interest are key scott porter. Ey, media, entertainment consulting services Leader scott thank you so much for being on the show and sharing the future of gaming with us