Connected TVs: Evolution for the Gaming Industry

At present, more than 34% of householdsaround the world own a Smart TV, and this number is only expected to keep rising. CTVs have become a part of daily life for many people. Streaming platforms and CTV companies continue to develop new ways to provide diverse content for their users. Now, both have set their sights on the video game industry.

Currently, big-league companies are continuing to make inroads into the CTV arena and sign new contracts with Smart TV companies. Microsoft launched its Xbox App on Samsung smart TVs in June 2022, and LG is luring customers with a Google Stadia trial. Amazon is also continuing to develop its Prime program, launching Amazon Luna in March of this year. After these recent developments, we can expect other companies to follow suit and join the market in the near future.

Accessible Gaming

While video streaming remains the most popular category on virtually every CTV platform, gaming often comes second by usage or even the number of applications with examples including Fire TV, Roku, and Apple TV. It is important to note, however, that there is a huge gap between these categories, and games represent only a very small percentage of entertainment options. Roku, for example, takes up only 1.16% of overall content with 427 titles published. Amazon Fire TV has introduced twice as many games, but it is still a very small segment compared to the number of shows it offers.

Looking at popularity charts on both devices, we can see that the most popular titles include SNAKE, Crossy Road, and a large number of other arcade games. Social games are a big hit too, with Roku increasing the number of titles in this genre by 17% compared to last year. This statistic shows that these games cater almost exclusively to a hyper-casual audience. Bearing this in mind, a shallow entry point and ease of use are key factors that continue to attract this audience.

In addition, companies such as Microsoft and Amazon have found another way to make CTV gaming more accessible. Game streaming makes it possible for customers without specific and often quite expensive consoles to play exclusives through Smart TVs. The lower quality of image and feedback times means the experience is not yet comparable to consoles. However, this is an affordable option for people hesitant to splash out on an expensive device. This means customers are able to enjoy titles they wouldn’t necessarily be able to play any other way. This means the companies are engaging a demographic that would otherwise miss these titles.

The reaction of key players

Сompanies like Amazon, Google and Microsoft are filling in the cloud-gaming niche just as quickly. The main selling point of this approach is a variety of high-budget games available for a monthly subscription. Stadia draws customers with big names like FarCry, Darksiders, and Assassin’s Creed, while Amazon Luna offers titans like Resident Evil and Devil May Cry. Seeing how several offers for CTVs have been successful this summer, we can only expect more cloud-based services to try and fill in the CTV gaming niche with their own exclusive offers.

Some media streaming giants have already taken an interest in this market as well. The most notable example among them is Netflix, which has lately been trying various approaches to maintain and even boost its subscriber numbers. At the moment, it has a very limited library with only 26 mobile games, but Netflix plans to double this number by the end of the year. While no doubt innovative and potentially rewarding, this idea is “going to be experimental,” according to Netflix COO, Greg Peters. Even though it is far too early to estimate the success or failure of Netflix games, with less than 1% of its users trying out the category, one can not underestimate the appeal of game tie-ins to its most streamed shows. Another way would be to make more interactive series, with Black Mirror already setting the example with their game-like additions to the film, Bandersnatch.

Any of those options may significantly increase the popularity of Netflix's gaming market. Creating a symbiotic relationship between TV series and games can lead to the simultaneous growth in popularity for both these fields.

Pitfalls and detours

Despite its positive features and room for growth, CTV gaming is yet to gain a major following. At the moment, smartphones among the hyper-casual public are still preferable to almost any alternative Smart TVs can provide. On the other hand, cloud services, while still successful in the niche market, especially when comparing the raw numbers, are still not a mainstream way to enjoy games — data shows that it brings only 3% of the global game market revenue.

There are certain risks in both approaches. The main pitfall is hidden in the word “alternative”. With a smartphone in our pocket, we are simply not interested in the mobile games Netflix or Roku can provide. Regardless of whether the game is an all-time classic or an intriguing tie-in to a show, there is simply no point in using your CTV or streaming app to play one – not while there is an infinitely more convenient way to enjoy it. But even if we forget about the smartphone factor, neither Netflix nor Roku can offer its users a unique experience. Tetris, Match 4s and Solitaire are too well-known to strike an average person as something they should try out for novelty. Most games are simply too bland, even for the likes of hyper-casuals.

Cloud-based gaming has encountered its own problems — most people interested in trying out new releases already own the corresponding device, be it a high-end PC or a new-gen console. Consequently, the cloud gaming users consist mostly of those lacking the traditional alternative or opportunistic gamers on free trials.

There is a possible solution to these problems. Using platforms like Roku and Netflix to bring in new, exclusive titles would increase public interest — provided the games themselves are interesting enough. The niche for creating games uniquely for OTT devices and Smart TVs is barely explored, and pioneers like Playcent Games see this as an opportunity to bring clients in en masse. The exclusivity drives the interest, and should just one game prove itself to be the next big thing, the CTV gaming industry itself could experience a significant boost in demand.

Takeaways

Although it still has some drawbacks, CTV gaming is here to stay — in one form or another. While it is doubtful that Smart TV games can overwhelm the gigantic presence of PC and console gaming; they attract another specific audience. As Smart TVs continue to dominate the market, we can assume that the public's interest in playing via their CTVs will only increase.

So far, this field is still uncharted, and most companies prefer to travel down the safe path, porting existing games from Android or iOS-based devices or simply streaming the games through applications. However, smartphone gaming proves this to be ineffective, and it is only a matter of time when Smart TVs will have their own line-up of exclusive titles to choose from.

It is doubtful that the CTV game industry will cast a shadow over consoles or PCs, but it does not need to. It already has a dedicated following of casual players who would love nothing more than to see novel solutions in a genre familiar to them.

Some, like Playcent games, have already picked up on that, and it is likely that soon media giants will start to try and diversify their content with unique deals. This, in its turn, may increase the competitiveness of CTVs in the market and provide their users with an alternative not to be found elsewhere.