The number of people who play video games is expected to surpass 3.8b in 2027, up from roughly 2.4b in 2017. 

We can attribute much of this growth to the pandemic’s stay-at-home orders and people’s desire to escape the stress and isolation—nearly two-thirds of Americans played video games during the pandemic. 

Gaming companies benefited. 

Nintendo announced record profits in 2021, which increased by over 80% YoY. Meanwhile, game streaming viewership nearly doubled during the pandemic. 

While the amount of time people spend gaming is dropping, it’s far from falling out of grace with advertisers. 

Here’s how gaming advertisers spent in 2022 and what 2023 may hold as people resume their normal, out-of-the-house lives.

MediaRadar Insights on Gaming Advertising in 2022

Despite a dip in gaming in 2022, more than 2k companies still spent nearly $1.6b to promote gaming products, representing an increase of 6% YoY. 

The most significant increase came in Q3 when advertisers boosted spending by 22% YoY to more than $370mm. A level deeper, spending in July and August was up by more than 32% YoY, while September remained flat. 

The spending spree in Q3 makes sense as advertisers geared up for the perpetually busy holiday season. Despite the down economy and layoffs, holiday spending grew by 7% YoY.

Spending in Q4 increased as well—this time by 9% YoY and 46% QoQ. 

Much of this increase came thanks to considerable investments from advertisers at Activision Blizzard (Call of Duty: Modern Warfare, Overwatch 2, etc.) and Ubisoft (Just Dance, Mario + Rabbids Sparks of Hope, etc.), who both increased spending by more than 500% QoQ. 

At the same time, Bluehole Studio (The Callisto Protocol) and Nuverse (Marvel Snap) were up by 1,000%+ QoQ. Blue Studio’s ad investment was 100% digital media, with 73% purchased programmatically. 

Game Titles Drove Ad Spending in 2022

While advertisers across the gaming world invested in ads in 2022, more than half of them (64%) came from those promoting game titles. 

Last year, 1,035 companies promoting more than 2k games invested $1b, representing a 28% YoY increase from 2021 (a 10% YoY decrease in the number of advertisers). 

Advertisers for Activision Blizzard (Candy Crush, Call of Duty, and World of Warcraft), Playrix (Fishdom, Manor Matters, and Township), and Tencent Holdings (Fortnite, Lab Rat, etc.) were front and center.  

The spending from advertisers at Tencent Holdings comes in the wake of the continued success of Fortnite. While it’ll be impossible to replicate Fortnite’s surge in popularity during the pandemic, the game still has a firm grip on society. In December 2022, people watched 46.1mm hours of Fortnite streams on Twitch.

Advertisers for Tencent Holdings are spending to maintain their illustrious status—99% of Fortnite’s investment went to video ads across nearly 50 properties—but also to fend off the competition. 

PUBG: Battlegrounds, for example, reported more than 425k concurrent streamers on Steam in November 2022.  

At the same time, advertisers for 1047 Games promoted its debut game, Splitgate, on the heels of a $100mm round of funding. 

While advertisers for Playrix opened their wallets especially wide in 2022 to promote Fishdom, Manor Matters, and Township, a reallocation is possible as the mobile gaming market declines.

Other gaming advertisers in 2022 

Advertisers for game titles weren’t the only ones who spent millions in 2022; the other $575.3mm (36%) of gaming ad spend came from a mix of online games, video game consoles, gaming systems, simulation gaming systems, video game websites, etc. 

However, most of that spending ($411.5mm) came from advertisers promoting online games, video game consoles, and gaming systems. 

Despite spending millions, 2022 was a down year for many of these advertisers. 

The 320 online game advertisers, for example, reduced spending by 10% YoY to $217mm. 

Advertisers for Tencent Holdings, Square Enix (Final Fantasy XIV Online), and Microsoft (The Elder Scrolls, Fallot 76, etc.) accounted for 53% of the investment to promote online games. 

The decline in spending from online game advertisers is likely two-fold: people are spending less time indoors and more time cutting their budgets, which could impact ad spending in 2023. 

Meanwhile, spending on video game consoles dropped by 19% YoY, while spending to promote gaming systems was fairly flat at $50mm. 

For console advertisers, the decrease isn’t an indication of their dwindling status but a result of a year lacking substantial launches; Sony and Microsoft launched their next-generation consoles in 2020.

Don’t let the declining ad spend paint the wrong picture, however. Sony shipped more than 7mm PS5s in December 2022. Millions welcomed this news after over two years of supply shortages that made headlines. 

While Xbox Series X and S sales trail those of the PS5, Microsoft is okay; the company’s gaming revenue reached $16.23b in 2022, up from $15.37b the year before. 

Record sales of these consoles despite a reduction in ad spending paints a clear picture: people will buy consoles whether they see ads or not. 

Further proof: The Nintendo Switch became the third-best-selling console ever, passing the lifetime sales of the PS4 and Game Boy. 

The Recession Could Put a Cap on Gaming Ad Budgets

No one will deny the popularity of video games. But, at the same time, no one can ignore the financial pressure and anxiety caused by the down economy. 

So, what will give in 2023? 

Will video games’ popularity spur ad spending, or will less consumer spending put a cap on budgets? 

Time will tell, but given the number of people who’ve expressed financial anxiety due to the economy, the latter seems more likely. 

That said, gaming advertisers will still open their wallets in 2023, especially as the holiday season nears. 

For more insights, sign up for MediaRadar’s blog here.

Gaming’s popularity soared during the pandemic as millions flipped on their consoles to connect with others and regain a sense of normalcy. 

That said, gamers weren’t the only ones having a good time; the video game industry is set to surpass $200b in revenue this year.

Although the number of gamers is normalizing as other activities become possible, gaming advertisers aren’t deterred, and they’re spending more than ever. A lot more.

MediaRadar Insights on Gaming Advertising in 2022

Through October 2022, 1.6k gaming advertisers spent nearly $1.2b on digital, print, and T.V. ads, representing a 367% YoY increase from last year.

Spending increased every month by at least 119%, with the two biggest spikes coming in April (up by 850% YoY) and August (up by 600% YoY). 

Interestingly, these two increases came in tandem with a surge in COVID cases, at least by 2022 standards. 

As the winter months and tridemic (a combination of the flu, COVID-19, and RSV) brew the perfect storm for more indoor activities, gaming advertisers may find themselves continuing their spending ways as gamers dust off their consoles. 

Spending continued into Q4, increasing by 34% MoM from September. Budgets kept climbing in preparation for the post-Thanksgiving rush but fell in December by 33% MoM.

While we can attribute much of the increase to existing advertisers spending more, we also have to give credit to advertisers joining the party. 

Through October, the number of advertisers increased by 257% YoY, many of which were dipping their toes in for the first time (they didn’t advertise in 2021).

Top Gaming Advertising Categories 

Advertisers from five categories drove the increase in gaming ad spend: game titles, online games, video game consoles, gaming systems, and other.

Most of that, however, came from advertisers promoting game titles and online games, with advertisers in these categories spending more than $924mm or 78% of the total investment.

Microsoft, Playrix, and Tencent Holdings were three top advertisers in the game titles category, collectively spending $212mm or 28% of the category’s spend.

A level deeper, Playrix promoted Fishdom, Manor Matters, and Townships with a digital-exclusive strategy on Instagram (75%) and Facebook (24%). MediaRadar’s insights show that 68% of the company’s Instagram ads were between 16 and 30 seconds long.

While Playrix and other gaming companies leaned heavily into their ad strategies recently, a reduction could be in the cards as player behavior shifts and consumer spending declines.

Meanwhile, Tencent Holdings promoted Fortnite by Epic Games with online video ads ranging between 16 to 30 (34% of spend) and over 60 seconds in length (23% of spend).  

Finally, advertisers for 1047 Games split their dollars across Facebook and online video as they rode the wave of their successful debut, Splitgate, and a $100mm round of funding.

Where Are Gaming Advertisers Sending Their Money?  

Gaming advertisers spread their wealth; however, their presence in three ecosystems—retail media, social media, and YouTube—creates the most compelling storylines. 

Retail media 

Retail media, which has gained widespread popularity among CPG brands, is spreading its wings into the gaming industry. 

Through October, gaming advertisers have spent more than $22mm on retail sites, including Target (47%), Best Buy (27%), and Walmart (17%). 

While gaming advertisers are branching out, Microsoft, Nintendo, and Sony accounted for $13.7mm of those dollars, making it clear that retail media is still very much in its infancy. 

That said, it should gain steam in 2023 as retailers up their game and prove their networks have value outside of CPG.

In fact, Forrester projects ad dollars dedicated to retail media networks will double in the next four years. 

Even more telling of retail media’s promising future is the fact that 74% of brands have separate budgets for them. When Google closes the door on third-party cookies, the first-party data powering these networks will become that much more valuable. 

That said, only slivers of the retail media world will appeal to gaming advertisers. 

For example, B.J.’s Wholesale Club, which recently launched its network, could be an enticing option.

Lord & Taylor? Probably not so much.  

Social media

Retail media is early in its evolution, especially in terms of how gambling advertisers are using it. The major social media platforms are the opposite, with more than 850 advertisers investing $274mm across Facebook, Instagram, Snapchat, and Twitter. 

To put that into perspective, advertisers spent 1,145% more on social media than on retail media, but that’s par for the course given social’s reach. 

During a time when advertisers are looking to maximize budgets and limit risk, social media will remain a safe haven. This is likely why we see just a fraction of gaming advertisers invest in retail media. 

All major social media platforms could warrant spending in 2023, but those with closer ties to gamers may get more attention. 

Twitter, for example, continues to establish itself in the gaming community. In 2021, there were more than 2.4b Tweets about gaming, representing a 14% YoY increase from 2020 and a 10x increase from 2017. 

More Twitter-exclusive strategies may be on the table for 2023—at least for advertisers who can stomach the uncertainty that comes with Elon Musk’s tenure. 

YouTube

Gaming advertisers spent $641mm on YouTube, with nearly half going to gaming channels (47%), which makes sense given the platform’s entrenchment in the gaming community. 

In Q1 2022, people watched 1.13b hours of video on YouTube Gaming Live, with an average of 523k concurrent viewers. 

YouTube has an undeniable stranglehold on gaming advertisers right now, but 2023 may bring unprecedented pressure from Twitch. 

In June, Twitch announced it was opening its ads program to more streamers and increasing payouts. For Twitch, this move is undoubtedly a response to losing some of its most popular streamers, including Valkyrae, to YouTube.

More recently, the gaming O.G. pushed chips into ultra-competitive live video shopping, which allows viewers to buy the products they see on the stream and gives advertisers a more authentic way to connect with consumers. 

Gaming Advertisers Rack Up Points in 2023

Will gaming advertisers increase their budgets by another 367% in 2023? That’s unlikely, especially with so much economic uncertainty.  

That said, increases are inevitable, namely from those promoting the never-ending stream of gaming titles and online games.   

Most of those ad dollars will likely go to the tried-and-true channels, but the emergence of retail media will continue as the world phases out third-party cookies and gaming advertisers wake up to the power of first-party data. 
For more insights, sign up for MediaRadar’s blog here.