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There is hardly any industry with such a high rate of innovation as in the games industry

As part of the research initiative on “Digital Transformation and Value Creation”, Prof. Marchand studies among others marketing of digital games. Researchers of different disciplines such as marketing, information systems, psychology and economics are engaged in various aspects of the “digital transformation” of the economy and society. Just in time for Gamescom, world’s largest fair on interactive entertainment, we talked to Professor André Marchand.

Professor Marchand, among others subjects you are researching digital games and you are present on this year’s Gamescom in Cologne. Which current trends do you observe?

Just a few years ago, there was a trend towards mobile games and so-called browser-games. These games have been produced with a relatively small budget and were financed by advertising mainly. Now, with fewer games being produced but marketed at a high budget, this trend seems to be reversing. Production costs in range of a few hundred million euros exceed those of expensive movies in some cases and even the box-office results of very successful game titles are in the billions. I think this is quite impressive for an industry, which has been a niche industry 20 years ago. Worldwide, turnover in the gaming industry is more than 100 billion US dollars. In addition, gamers are not all male and under 18 years anymore. On average, gamers are 35 years old and on one third female. Target groups keep on diversifying. This is also reflected in the fair’s audience, as more and more visitors are female.

What was particularly exciting for you as a researcher?

For me, it was particular exciting to talk to mangers of the games industry. These conversations can be used to check whether the marketing topics examined by researchers are relevant for the managers in this industry and which topics are currently particular challenging for managers. Taking into account that the product cycle of a digital game is up to five years, being a manager of digital games is not an easy job. If one starts producing a future blockbuster game, it is vague whether the current generation of games console (Sony PS4/Pro, Microsoft Xbox One S/X and Nintendo Switch) is still up to date when the game is published and how many potential customers possess a matching console.

Target groups keep on diversifying. This is also reflected in the fair’s audience, as more and more visitors are female.

Prof. Dr. André Marchand

What fascinates you about video games?

The high dynamics of the industry. There is hardly any industry with such a high rate of innovation as in the games industry. I used my fair visit also to test new applications of virtual reality and I was impressed with the current state of the art. However, whether virtual reality will be successful in a large mass market or whether the a so-called "augmented reality", in which one perceives its physical environment as opposed to virtual reality, will be more successful is still one of the unanswered questions of the industry.

Do you play video games yourself?

Of course I do! In my opinion, you can only understand and examine an industry if you engage with its products and services. However, I have to admit that as a university professor and farther of two children, I do not have much time for digital games. Nevertheless, I test important games at least for a few minutes to get an impression about them.

Are there any special characteristics that need to be considered when dealing game marketing?

Games are digital products and their users have been familiar with the digital world for long. Correspondingly, this customer group has little understanding if game publishers can only be reached by mail or fax, not digital and live via social media. In addition, we often see digital innovation at games at first, before these innovations are adapted in other industries.

Which new developments in game marketing or in the games industry in general do you expect?

Because of the broadband expansion, joint gaming with other people via the internet becomes increasingly important. Additionally, I expect an increasing concentration on a few very successful games, at least in the next year. Afterwards, new innovations could change this trend and lead to a new boon, Therefore, from a business as well as from a science perspective this industry remains very interesting.

Professor Marchand, thank you very much for the interview!

(Questions asked by Sarah Brender)