Video games aren’t just a major cultural force. The technology that powers them is being used to foster innovation in a surprising range of industries—from architecture to aerospace engineering. There are now many exciting commercial opportunities for companies that embrace the innovative technology behind video games. 

The growth of video game play on smartphones has been a strong driver of the new wave of game creation. In Europe, mobile games attracted EUR253.1 million of investment in 2022, with significant sums also going to the metaverse and Web3 technology (EUR179.7 million), esports (EUR67.6 million), and tech platforms (EUR46.5 million).¹ The UK is Europe’s most active video games investment hub, with double the investment rounds of Germany, its nearest competitor. The UK’s cloud gaming market is also growing rapidly, with monthly active users tripling in 2022; by 2026 the sector is projected to be worth GBP1 billion in the UK, and GBP11 billion globally. ²

“The video game industry has been growing rapidly for decades and large parts are shifting away from a hit-driven model to one where there are very consistent revenues; from micro transactions in mobile games, to games-as-a-service and subscription models like Xbox Game Pass,” says Ed Cave, Associate Director, HSBC Private Banking.

Making an impact far beyond gaming

The global video games sector has surpassed USD200 billion³ in value and is now bigger than Hollywood. Video games don’t just have a major economic footprint, they are making their mark on popular culture; as shown by the success of titles like Netflix’s The Witcher and HBO’s The Last of Us.

“But what’s more surprising is how the evolution in video game technologies offers widespread commercial applications for a whole range of industries, from product design to corporate training,” Cave adds.

Companies have an opportunity to streamline processes, boost customer and colleague engagement, and drive down costs by applying technology and design concepts that have been honed by video game developers to other industries,” he explains.

One piece of video games technology is particularly significant: game engines. Unreal Engine, with a free-to-use tier and flexible licensing options, is one key example. It is the game development engine behind popular titles like Fortnite and PlayerUnknown’s Battlegrounds (PUBG) and features a powerful suite of rendering, physics simulation, editing, animation and landscaping tools with many applications. As well as providing the architecture behind a wide range of big budget and independent games, Unreal Engine is also used to render CGI graphics for TV and film, including the blockbuster Rogue One, Disney Plus’s The Mandalorian and HBO’s Westworld.

Beyond the world of entertainment, Unreal Engine is used in architecture, product development, engineering and construction; where it rivals many industry-specific design and visualisation tools. Notable examples include Audi, who used it to create a digital showroom, and General Motors, who used it to design its digital cockpit display software in its Hummer electric vehicles. It has also been used in the world of fashion. French design house Balenciaga used the engine to create an urban adventure computer game to showcase its Fall 2021 collection⁴.

These video game engines can be used to build out wider AR (Augmented) and VR (Virtual Reality) use cases, such as helping retailers track shopper’s attention and preparing their staff for busy shopping periods⁵. Aerospace manufacturing company Boeing uses VR to train its engineers to assemble specialist aircraft components, which it says cuts training time by 75 per cent⁶. In automotive design, VR is widely used for real-time rendering, prototyping and vehicle simulation.

The metaverse is another case where video game technology is having a significant impact on the world of business, with its ability to immerse users in networked virtual worlds projected to drive major business growth and reach an audience of 700 million people by 2030⁷. While the possible mass adoption of the metaverse remains a long way off, and the economic value under debate, metaverse platforms like The Sandbox are home to major brands; from banks, to tech firms, to celebrities and the sector has been forecast by some outlets to add more than GBP3 trillion to the global economy⁸ within a decade.

Powering up the music industry

Because video games reach enormous audiences, they also provide opportunities for advertising and promotion. In the music industry, for example, the soundtracks to classic game titles like Sega’s Streets of Rage, Grand Theft Auto and Silent Hill have become as beloved as the games themselves. Video games can provide platforms for musical artists; the soundtracks to the hugely popular FIFA football game series have become annual showcases for new and established acts from Dua Lipa to Bad Bunny, and songs frequently receive nearly one billion plays⁹.

As in films and TV shows, the popularity of video games also makes them a prime candidate for product placements. Billboards, storefronts, posters, clothes, cars and weapons within the game can all be part of virtual advertisements. The hoardings around the digital football fields in FIFA are one example.

The rise of gamification

Another innovation borrowed from video games is the concept of gamification, which applies the techniques that make video games so engaging to a range of non-gaming applications. Anyone who has used a device like FitBit to get more exercise or an app like DuoLingo to learn a new language is benefiting from gamification’s ability to make often tedious activities fun.

Gamification’s approach to user engagement is so effective that the global gamification market is projected to grow at a CAGR of nearly 28 per cent, reaching USD96.8 billion by 2030.¹⁰

Gamification’s impact on training has also been significant, with a 2019 study showing it made the majority of employees feel happier and more productive at work.¹¹ It has also been used to improve awareness of cyber security risks, as in PwC’s turn-based roleplaying game Game of Threats, in which players compete to infiltrate and defend fictional businesses.

Gamification is also a feature of the growing world of investment apps. While it’s important that gamification is ethical and doesn’t foster unhealthy investment practices, gamification has played a major role in democratising investing beyond high-net worth individuals by streamlining investment processes and developing intuitive user interfaces (UIs). A 2022 report by the Royal Mint revealed that 80 per cent of 16-25-year-olds hold some form of investment, with a quarter reporting that investing helps them reduce financial worries.¹²

An evolving industry

“Over the last 10 years it’s been refreshing to see how video game technology has impacted so many  different industries and has such wide applications, from architectural visualisation to aerospace design, and to its ubiquitous use in Hollywood,” says Cave.

“It’s an industry we’re committed to over the long term because of its impressive ability to adapt and evolve.”  

HSBC Private Banking specialises in keeping investors and entrepreneurs up to date with the important trends shaping future industries. If you are interested in discussing technology investment opportunities, please contact us or speak to your Relationship Manager.