Music Has a Monetisation Problem - Are Video Games The Answer? [Game Music Digest March 2024]
Is the music industry really missing out on about 75–80% of revenue value from the gaming industry?
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Music Has a Monetisation Problem - Are Video Games The Answer?
Is it time for the music industry to start taking lessons from the video game industry? Rob Abelow, editor of Where Music’s Going, seems to think so. He raised some fantastic points on LinkedIn and in his latest newsletter about the monetization opportunities surrounding interactive social experiences and how the music industry, for the most part, is missing out on them.
For what it’s worth, I agree with everything that Rob said, and wanted to weigh in with some of my own thoughts (and plenty of delicious data) from the gaming side.
Despite significant layoffs in recent months, the global video game market was estimated to generate $184 billion in 2023. Goldman Sachs’ optimistic Music in the Air 2023 report valued the music industry at $94.9 billion.
There’s a long list of reasons the video game industry continues to go from strength to strength. I could throw more figures at you about how younger demographics are embracing gaming or how the global rollout of 5G networks in developing countries is fueling mobile gaming, but I believe the video game industry continues to thrive because:
It understands how to utilize, market and diversify IP (its own and external) to appeal to broad demographics of gamers
It understands how to monetize and is constantly innovating with new monetization mechanics
Similarly, it understands the techniques and necessary strategies to acquire and retain users
It’s quick to pivot and adapt to the latest trends (new game genres, gameplay mechanics, monetization models, etc.)
I was surprised by some of the negative comments on Rob’s LinkedIn post suggesting video games and music are not the same and have completely different demographics (can you put ‘music listener’ into a demographic?!). This couldn’t be further from the truth.
They’ve been working together since the ‘80s, and while the relationship has dipped from 2010-2020ish (demise of Guitar Hero/ Rock Band; unrealistic sync fee expectations; expensive development fees making licensed games like 50 Cent Bulletproof and Def Jam impossible to recoup on), the music industry has made a concerted effort in recent years to do more with video games.
After the excitement surrounding one-off virtual concert experiences in Roblox wore off, we’ve seen major labels, Electric Daisy Carnival and TWICE embrace ‘persistent music experiences’ and ‘fan hubs’ on the platform instead.
Similarly, the arrival of Fortnite’s Unreal Editor for Fortnite (UEFN) in 2023 means developers can build and publish their own experiences in the Fortnite ecosystem (Avenged Sevenfold is one of the latest bands to experiment). Fortnite’s new music mode, Festival Stage, lets players tap along on their controllers to songs from music idols such as The Weeknd and Lady Gaga, while the game’s Jam Stage means you can form a band with up to three other players and experiment with music stems from licensed song kits.
Elsewhere, Sony Music continues to push its artists for sync opportunities in first-party PlayStation games such as Gran Turismo, Spider-Man and God of War, while studios such as EA, Krafton and The Pokemon Company are collaborating with the likes of Post Malone, Karol G and Ed Sheeran on promotional campaigns.
And let’s not forget Warner Music Group published its first video game, Invector Rhythm Galaxy, last year. While this isn’t the first label to pursue wider gaming activities – South Korean entertainment company and record label, HYBE, has its own development studio building mobile games for HYBE artists like BTS – it will be interesting to see if WMG decides to do more in the space (it should).
It sounds impressive when you lump all of this together. But the music industry could be doing way more with monetization and engagement. Japan and Korea are currently leading the way on this front.
According to SensorTower data, HYBE’s 'BTS Island: In the SEOM Puzzle' and Rhythm Hive games were downloaded 3.7 million times last year, making $16 MILLION in revenue. Similarly, Mobile games based on Kpop stars Blackpink and NCT developed by Korean studio Takeone Company picked up 1.6 million downloads in the last year, making $2.1 million in revenue.
Perhaps most impressive of all: Sony's mobile game for the Japanese idol group Hinatazaka46 only had 20k downloads in the last year but has managed to make $6.8 MILLION, mostly from Japan. Why is this impressive? The game was released in 2020. This means rather than relying on new downloads to generate revenue, Sony is fostering a highly engaged player base to keep them spending.
Another rhythm game based on Japanese idols Sakurazaka46 and Hinatazaka46, Uni’s On Air, made $12.7 million in the last year despite only being available in Japan. The average revenue per download is $97.
Video games provide more opportunities to monetize music IP than any other medium. When Blackpink collaborated with the battle royale shooter PUBG Mobile (19.2m daily active users at time of writing) in 2022, players could buy limited-time gachas, subscription plans, a special event currency, accessories, skins, outfit boxes, and emotes - all of which were themed on the band.
I eagerly await more news on WMG’s ‘Super Fan App’ to see what lessons it will take from gaming (more on this in a future newsletter). For now, Avenged Sevenfold deserves a special mention for its recently launched and video game-inspired Season Pass. It’s a direct-to-fan loyalty platform which rewards fans with points that can be redeemed for IRL prizes for engaging with their music.
Last year, ex-chief digital officer and EVP of business development at WMG, Oana Ruxandra, told a panel the music industry is missing out on about 75–80% of revenue value from the video game industry. I believe this is largely down to limited knowledge of the video game industry on the music side (at least in the West), which struggles to see opportunities outside of major sync placements and ‘metaverse activations’.
Mobile games are often ignored, despite generating 49% of global gaming revenue. Monetization and gameplay mechanics are misunderstood, and many of the most exciting game x music initiatives are dreamed up by video game studios rather than the music industry (shout-out Riot Games and Krafton for leading the way on this front).
In my opinion, labels need to set up dedicated (not ‘new media’) video game teams rather than relying on a couple of knowledgeable individuals to ideate and work more closely with the game industry. A thorough understanding of the various ways in which IP can be monetized and diversified to maximise engagement will only become more important in the future.
And in other music and gaming news…
EDM DJ and producer, Zedd, joined esports pros and VC firms in a $30m funding round for the development of a new first-person-shooter from Mountaintop Studios [founded by Oculus co-founders]. Alongside his creative contributions to games such as League of Legends and Valorant, this funding round indicates Zedd’s wider business interests and partnerships in the gaming space, such as his position as ‘global brand ambassador’ for gaming gear brand HyperX. [Source]
In 2022, The Grammys introduced a category for best video game soundtrack score, and this year’s winner is EA’s Star Wars: Jedi Survivor composed by Stephen Barton and Gordy Haab. The composers made the game’s sheet music free to download, but my favourite thing about the Jedi Survivor score is the 16 diegetic songs written for the Cantina bar DJs.
The Final Fantasy games are celebrated for having some of the best video game music in the world, and the latest game, Final Fantasy VII: Rebirth, features more than 400 songs! [Source]
Extreme metal publication, Decibel, has a monthly video game column where they interview artists about their love of video games. Dragonforce’s Herman Lee had some great advice for artists interested in gaming partnerships: “If you want [your music] in a video game, you’ve got to go and get it yourself… Don’t get your manager to do it—do it yourself. You’re the gamer. If you really want to do it, talk to [game companies]. Talk to people, because you’ll end up finding out there are a lot of people that work in this game company that have the same interests as you."
Warner Music Group’s rhythm game, Invector Rhythm Galaxy, finally arrived on PlayStation, Xbox and Nintendo consoles after its July launch on PC. Invector Rhythm Galaxy picked up solid reviews at launch but PC sales have been mediocre, with only 3000 purchases so far, according to SteamSpy. My thoughts: WMG should have made the game free-to-play to reach more players, who could be monetized through in-game song purchases. [Source]
Nintendo’s in-house composer and sound director, Koji Kondo, was inducted into the Academy of Interactive Arts and Science’s Hall of Fame at this year’s D.I.C.E. Awards. Kondo was handed his award [vid here] by Hollywood composer Brian Tyler, who worked with him on the score for the Super Mario Bros. film. Tyler was ecstatic in the presence of Kondo, which is no surprise given his love for all things video games, which I explored in my NME interview with him.
More Kondo greatness - Gene Park from Washington Post published an excellent profile on the composer exploring his 35+ tenure working for Nintendo, inspirations, and the time he was invited backstage by Paul McCartney and serenaded by his own music. [Source]
The asymetric survival game, Dead by Daylight, launched its collaboration with Iron Maiden. The update introduced four legendary outfits for the killers, band merchandise for the survivors, and Iron Maiden’s ‘Fear of the Dark’ as new menu music. This is a major sync for the band, given Dead by Daylight has more than 60 million registered players. If you check out the YouTube video for Fear of the Dark, the top-rated comments at the time of writing are all from Dead by Daylight fans! [Source]
Metalcore band The World Alive released a re-recording of ‘Rise,’ which was written for Riot Games’ League of Legends as the 2018 Worlds Anthem. [Source]
Singer-songwriter Maalavika Manoj’s latest song, ‘Semi Automatic Butane’, is now available in Fortnite’s Radio Underground in-game radio station. It’s worth reminding people that Fortnite has seven in-game radio stations, accessible when you’re driving vehicles in-game. [Link]
Can you imagine a world where FIFA games didn’t have music? Well, that nearly happened. Time Extension reporter Jack Harlow has the story on how a couple of tickets to the World Cup final prevented a licensing nightmare for Blur’s iconic Song 2 sync in FIFA ‘98. [Source]