The Crossover Potential Between Music & Gaming Is Clear – But It Requires a Thoughtful Approach (Guest Column) 

It arguably wasn’t until 2019 when the crossover between music and gaming produced its peanut butter and chocolate moment: Marshmello’s DJ set in Fortnite, which turned heads after drawing an audience of 10 million people. Following subsequent blockbuster integrations with artists like Travis Scott (Fortnite) and Lil Nas X (Roblox), the power of gaming finally hit home in the music industry — and executives and artists began scrambling to capitalize on it.

Given the stark contrasts between the two industries, that’s easier said than done. The gaming business thrives on low friction, low barriers to entry, free access, high engagement and small, incremental micro revenue streams, derived from broad global distribution to gamers around the globe. The music industry delights in friction, enjoys high barriers to entry with unintelligible rights, rules and norms, abhors the word “free” and prefers just a handful of enormous revenue streams from partners who can be readily controlled.

Historically, these differences caused a gap between the two industries. Many viable music-centric games died on the vine or floundered endlessly in the licensing process, resulting in years of lost opportunities. Gaming studios hired composers to create original compositions rather than stumble through the morass of music rights or risk giving up too big a share of revenues. Music companies insisted on trying to license entire catalogs of music to gaming companies and were perplexed as to why these studios opted not to sign up for market share-based deals.

Vickie Nauman
Vickie Nauman

Along the way, the gaming industry exploded. According to one estimate, about 3 billion people are active gamers globally, and revenues will exceed $200 billion in 2023 — larger than the music and film industries combined. Recorded music is also on a growth trajectory, with 616 million subscription streamers (Q2 2022; Midia) and easily over $40 billion in value in 2022 — if you extrapolate from the $39.6 billion 2021 valuation economist Will Page gave the industry in a report released last November.

While the crossover potential may now be clear, engaging with the gaming community requires thought, patience and matchmaking. By considering the five principles below, music companies can put themselves in the best position to profit from it.

Understanding gaming culture is the first step to capitalizing on it. Gamers have strong existing communities and preferences — and the music, the artist and the culture(s) they represent must fit with these preferences. Music companies owe it to themselves to talk to gaming teams in order to better understand their users; only then can they determine which artists are best suited for that specific title. For example, if a game’s users see themselves as part of underground culture, it would be a mistake to propose a big commercial act. Music companies should also find out which of their artists are gamers themselves, as this will drive interest from performers and composers who are looking to embed their music in a gaming context.

A licensing fee is only the start of gaming integration. Music is like the salt and pepper on the gaming meal, unlike its role as the main course on a digital service provider (DSP). That may mean modest licensing fees for a one-off game integration, but revenue can grow via in-game purchases, branded skins and emotes, deeper integrations in gameplay and more. Traditional synch licensing structures are the baseline of games now, but as technology and gaming engines evolve, we will see an emergence of new experiences that require new business models and licensing opportunities. Beyond the revenue stream, partnering with gaming companies opens the door to a vast, diverse audience for artists. The sheer volume of gamers globally includes the next generation of music fans, as Gen Z and Millennials increasingly find meaning in online communities and video games.

Recognize the power of engagement in gaming. Gaming methodologies work so well at engaging people that they’re being adopted by businesses in areas as diverse as enterprise human resource training, instrument learning, education, language skills and empathy building. The gamification of our lives is underway, and music stands to gain in diverse ways when it’s woven into something as sticky and immersive as a game. In fact, gaming’s power to hook an audience is transforming music discovery: 49% of gamers, or nearly 1.5 billion people, say they often discover new music via games (Deloitte). Placing their music in a more engaging context can help artists win new fans.

Watch the metaverse, where gaming and the creator economy are colliding. Recent data showed that 44% of gamers watched a virtual music concert on a gaming platform in the last three months (IFPI, 2022), and this is just the beginning. The creator economy has been in full force for years, fueled by self-releasing musicians and artists of all kinds who can grow their audiences through social media sites and benefit from increased streams on DSPs. Creator tools are increasingly being built into every platform to attract, cultivate and retain individuals who want to express themselves. This phenomenon is a foundational layer of Web3, with nearly all Web3 companies embracing creator tools but adding gamified engagement around rewards, scarcity and recognition. This powerful crossover between creators and gaming is going to be central to tomorrow’s metaverse experiences and token-based economies.

Keep an open mind to generational shifts. Gaming communities, virtual worlds and the gamification of online society mark a generational shift for Gen Z consumers and younger — blending user-generated content, co-creation, virality and social belonging into a potent mixture. These are also the hallmarks of music culture, and the same young fans who are playing games and socializing online will be buying concert tickets, artist merch and music subscriptions as they age. Older generations may not completely understand it, but inserting music and artists into these worlds and communities is also an investment in the future of our business. We know a well-placed soundtrack or artist activation can enhance the experience and differentiate a game, but the gaming community can also boost awareness of the music in turn.

Vickie Nauman is founder and CEO of the Los Angeles-based boutique music tech consulting and advisory firm CrossBorderWorks, where she has been working with a portfolio of gaming companies, Web3 projects, streaming platforms, apps, hardware, start-ups and industry consortiums since 2014. Her experience in digital music includes MusicNet (RealNetworks), KEXP, 7digital and Sonos.

Chris Eggertsen

Billboard