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Growth Strategy Framework in the Video Game Industry

Growth Strategy Framework in the Video Game Industry

New Release Elden Ring Makes Fantasy Gameplay Accessible for All Adult Gamers

A growth strategy framework is important for any brand seeking fame and fortune, including this example from the world of video games. New release Elden Ring shows how FromSoftware, Inc. achieved significant growth with new players, while still pleasing its core audience.

The benefits of trying to sell a product to new categories of customers can seem ephemeral, or like the risks outweigh the rewards. But, it can be done, and with great results. For the video game industry, one challenge in the growth strategy framework is to expand that framework to include uninitiated customer groups. 

Customer Segmentation is a Crucial Element of the Video Game Growth Strategy Framework

While there is debate on the exact size of the revenue of the video game industry, there’s no debate it’s larger than that of any other single entertainment industry, i.e., film or television. In the US alone, about 65% of adults play video games– that’s 227 million Americans.

Unsurprisingly, there are distinct customer segments within this large block of gamers. One way to segment gamers is by style of play:

  1. Hardcore: an expert who spends hours gaming 
  2. Casual: non-experts who play for fun
  3. Mobile: players looking for portable, episodic fun on their phones
  4. Online: plays as part of a team, often expertise in one game
  5. Observer: nonplayer who likes to watch others
  6. Armchair General: interest in one genre, like history games

Game developers have also organized gamers into the Bartle’s Player Taxonomy, as shown below.

Growth Strategy Framework in the Video Game Industry

Market segmentation and sizing is fundamental for all industries, as seen in these growth strategy examples.

Growth Strategy Framework: The Issue of Video Game Literacy

One unique obstacle to segmentation growth in the video game industry is “video game literacy” – the high level of familiarity with common video game mechanics that popular video games expect from their players. It’s difficult for a game to appeal to, say, both hardcore and casual gamers because they have different skillsets honed over time.

In order to grow their own business, video game developers should ideally try to reach, not just their existing players, but newcomers, too. One powerful example of the rewards for doing so is obvious with the video game developer FromSoftware’s recently released Elden Ring (2022).

Until Now, FromSoftware Appeared Satisfied with the Existing Growth Strategy Framework 

FromSoftware is uniquely well known in the video game industry for releasing “difficult” games. This reputation for making “difficult” games was, up until recently, intentionally cultivated, for example, when FromSoftware released its remastered Dark Souls (2011). It was marketed and sold under the name: Dark Souls: The Prepare To Die Edition (2012). The fact that you could expect to fail and die frequently was, for better or worse, considered a real selling point.  FromSoftware scaled back its promise of failure a bit with the release of Sekiro: Shadows Die Twice (2017).

Growth Strategy Framework in the Video Game Industry

How FromSoftware Challenged the Growth Strategy Framework to Welcome New Players

Yet, FromSoftware seemingly no longer cultivates a reputation of difficulty for its own sake. In interviews preceding the release of Elden Ring, the creative director of FromSoftware, Hidetaka Miyazaki, noted that although difficulty matters in his studio’s games, he also genuinely wants

“as many players as possible to experience the joy that comes from overcoming hardship.”  

Miyazaki’s desire to make new games with newcomers in mind has paid off with Elden Ring. FromSoftware offers a beginner’s starter guide with all the tips and tricks gamers need to know before playing.

In the three weeks after its release, Elden Ring made $12 million in sales, which vastly exceeds the amount prior FromSoftware games made in the space of years. This smashing financial success seemingly hasn’t come at any obvious cost of alienating existing FromSoftware fans, and is arguably a result of FromSoftware’s intentional choice to make and market Elden Ring as less intimidating and more newcomer-friendly than Dark Souls or Sekiro

One of the unanticipated benefits of Elden Ring’s success is the amount of discussion it has provoked about how the game offers more accessibility towards both those with disabilities and gamers with different styles. In future releases, FromSoftware will need to continue balancing the needs of existing fans with welcoming new segments. 

But if Elden Ring’s release shows anything, it reveals that the rewards of thoughtfully designing a product for new customers are not ephemeral, and can change how an entire industry thinks about itself. The traditional growth strategy framework can expand– and FromSoftware proved it.

Visit Insight to Action’s Growth Strategy resources page for more articles, or join the conversation at one of our Open Office Hours events.