THE SIGNAL: CULTURAL INSIGHT FROM DRUM - AN OVERVIEW OF VIRTUAL ENVIRONMENTS JUNE 2020
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THE SIGNAL: CULTURAL
INSIGHT FROM DRUM
AN OVERVIEW OF VIRTUAL
ENVIRONMENTS
JUNE 2020
CONTEXT
CONTEXT
WHAT IS A VIRTUAL ENVIRONMENT?
A virtual environment is any space where people engage with each other, and with
content using avatars instead of directly.
This report is going to explain how a new generation of people, who grew up as digital natives are fully
embracing the virtual environments delivered by gaming (and beyond) as places to socialise, to consume
content and to create content in volumes not seen before. It’s important to note that this isn’t just
about gaming, certainly not in the traditional sense. This is a fundamental shift into a new way of
engaging with culture. We believe this could be evidence of a similar sized change as the rise of radio in the
1920s, or the rise of TV in the 1950s.
WHAT DO THEY LOOK LIKE?
Some of the best known virtual environments are designed with creativity at the heart, none are a
better example than Minecraft, a block building game made in 2011 by Swedish studio Mojang which
now has 126 million active players globally. Within Minecraft people have made working computers,
works of art and even the entire planet Earth mapped to scale. However as we shall see in this report,
it’s also been used as a school, a concert venue and much more.
Fortnite Battle Royale isn’t far behind with 78 million players. It started life as a FPS (first person shooter) that
built a community around unlocking cosmetic updates and seasonal content. Since launch Fortnite’s map has
been the venue for concerts as well as delivering long form content directly to players through
it’s in-game cinema.
Beyond this, there are MMOs like League of Legends or World of Warcraft on the more gamer side of things
and then a number of pure-play virtual environments like Second Life (and clones) that exist purely as
a social environment.
Finally, it is important to note, although obvious, virtual environments do not need virtual reality hardware.
While VR is delivering fully immersive 3d, 360 worlds, the hardware take up is still limited and as a barrier to
entry is still proving too costly for most. The behaviour and desire for virtual environments clearly shows that
audiences will make do with a £10 javascript game over a £4,000 VR rig and still have the same amount of
fun, enjoyment and emotional experiences.
3
CONTEXT
HISTORY: GAMES HAVE LEFT THE TEENAGE BEDROOM
The last 30 years has seen gaming take a meteoric rise in both the cultural and commercial sense.
Since the launch of the PlayStation in 1994, the concept of gaming being an activity that only existed in the
bedrooms of teenage boys, has morphed into a multi-billion dollar industry (estimated at almost $200bn in
2022) with significant global cultural impact. As this change has happened, an entire generation has grown
up comfortable with the virtual environments of videos games and arenas for sport, music, and more.
For content consumption and for content creation, both of which have got highly impressive in both
complexity and global reach.
2018-2022 GLOBAL GAMES MARKET:
+9.0%
$196.0Bn
TOTAL MARKET CAGR
2018-2022 $178.2Bn
$164.6Bn 19%
$152.1Bn
20% 1%
$138.7Bn
21% 1%
21%
2%
22% 2% 31%
3% 31%
31% MOBILE
32% MOBILE $95.4
$85.4 8% Bn
31% MOBILE
8% Bn
MOBILE $76.7
MOBILE $68.5 8% Bn
$62.2 9% Bn
9% Bn
41%
40%
38%
35% 36%
2018 2019 2020 2021 2022
Boxed/Downloaded PC Browser PC Console Tablet Smartphone
Source: Newzoo Global Games Market Report 2019
4
CONTEXT
COVID-19 SENT US ALL INTO VIRTUAL ENVIRONMENTS
With Drake being the part owner of an eSports team and the success of Fortnite as a music
venue (more coming later on this) 2020 was already gearing up to be a very big year for virtual
environments. However as Covid-19 threw the world into lockdown, understanding and acceptance
of virtual environments only grew, as did the creativity of those building for them.
Twitch saw it’s YoY viewership double in April 2020, Steam has continually broken records for player volumes
and Reddit.com/r/gaming has seen a 40% increase in post volume since the US and Europe went into
lockdown. Animal crossing, a game that allows players to simply make friends with animal characters on
an island is a perfect example of a virtual environment that has delivered the escapism so clearly needed
by people across the globe, and sold 14 million copies, despite only being available on a single platform
(Nintendo Switch). Google Trends data shows the size of the interest, with “Animal Crossing” being a more
popular search term than “hand sanitiser” from the moment it was released – despite that release
happening in the middle of a pandemic.
WHO IS THE AUDIENCE?:
65% 35%
AGE
16 to 24
41%
25 to 34
32%
55 to 64
3%
45 to 54
35 to 44
7%
17%
Twitch’s audience shows that gaming isn’t a male dominated as it once was.
As we saw with millennials, generational media habits are maintained as the generation ages, so
while this audience is currently younger, we expect it to rise over time.
5
CULTURE
CULTURE
WHAT ARE THE KEY AUDIENCE BEHAVIOURS BEHIND THIS?
There are currently 2 main behaviours that we see within virtual environments
beyond traditional gaming.
As a social platform
When all your friends are playing the same game, there is
no need to switch from in-game voice chat to an external
platform, as such, users will simply log in and socialise
within the virtual space. Some games, such as Fortnite
have created specific ‘battle free zones’ purpose built to
hang-out with friends and listen to music - Fortnite is a
gaming platform first but they recognised the need for a
more disconnected space that whilst users came to game,
the element they enjoyed was talking and meeting with
others.
Another excellent recent example in this space is
Animal Crossing, which has seen people use the virtual
environment within the game for everything from
developer conferences to celebrating Ramandan
and Passover.
Fortnite’s Party Royale is a ‘battle free’ socialising zone in the game.
Virtual goods as part of
social status signaling
The social side of virtual environments doesn’t
end with simple interaction. As with the offline
world, image and fashion are just as important.
As part of the growing virtual fashion trend
which has also been boosted by Covid-19
lockdowns, virtual fashion items are a regular
part of virtual environments, with brands such
as Gucci (creating their own tennis game), Marc
Jacobs & Valentino (showcasing collections in
Animal Crossing) and Louis Vuitton (creating
in-game skins for League of Legends as well as
sponsoring a tournament) all ahead of the curve.
Louis Vuitton has created virtual fashion for League of Legends players exclusively in game.
7
CULTURE
As a content consumption &
creation platform
While perhaps the most well known examples are the
multi-million strong audience that attended Travis Scott
and DJ Mashmellow’s concerts set in Fortnite (28 million and
10 million respectively), there are a lot more opportunities
where people are using virtual environments to enjoy content
that’s not gaming related. Sometimes in environments built
specifically for content consumption.
Taking Travis Scott as an example - the number of attendees
who participated in the festival, the commerce it developed
for in-game purchases, and its promotion of Travis Scott’s new
single The Scotts ft. Kid Kudi which premiered in Fortnite all
deliver direct economic and brand benefit. The Scotts entered
the global Spotify chart at #1 with 7.45 millions streams,
breaking Billie Eilish’s streaming record for single “No Time
to Die” (7.167 million streams).
From the large scale down to something that started
significantly smaller “Animal Talking” is a user-made late
night talk show created within Animal Crossing, with scenes
mimicking the late-late show, the show is recorded and
streamed on YouTube.
Animal Talking is a lockdown-inspired late nite talk show made by users
of Animal Crossing.
Educational
consumption
Beyond entertainment, the value of virtual
environments continues. Microsoft and Mojang
who developed Minecraft have created
MinecraftEdu which allows students to explore
the Great Pyramids of Giza, understand basic
electrical engineering principles and more, all in
an imaginative, three-dimensional environment.
Simulation games such as “Bird Simulator” or
“Work at a Pizza Place” allow teachers to work
with students on a new angle for explaining
natural behaviour and work environments, where
as the incredible “I Am A Man” allows students
in 2020 to experience the civil rights movement
first hand in VR in the events leading up to the
assissination of Martin Luther King.
“I am a Man” allows for educational content to be experienced first hand in a virtual space.
8
CONSIDERATIONS
CONSIDERATION
WHAT DOES THIS MEAN FOR CULTURAL CREATORS?
MUSIC
All areas of culture are being impacted by the rise of
virtual environments. In music we’ve already discussed
the one-off concerts that have been created inside
games, however BlockbyBlockWest was an entire
festival run last month out of a Minecraft server and
included famous acts such as IDLES and Pussy Riot, with
Charli XCX performing at a similar event recently. The
interesting element with both of these examples (and
others within the music space) is that artists are adding
elements of the games where their content is being
consumed to deliver a more engaging experience. For
BlockbyBlockWest this meant that audiences could
set off stage effects such as fireworks and lighting via
completing in-game challenges. In a dubstep concert
earlier this year, the audience had to fight and destroy an
‘end level boss’ in order to get an encore. Charli XCX performed within Minecraft, leading to the fun cultural crossover of
Paris Hilton commenting on a Minecraft video.
Film & TV
From a Film & TV perspective, we’re at the very
early days of seeing two key opportunities. Firstly
machinima (cinema made using video games) is
going into live streaming, Animal Talking is an
excellent example of this, future programming
is highly likely to exist completely inside a
virtual environment. The second opportunity is
direct delivery of existing content into virtual
environments. Alongside trailers for Star Wars
and Deadpool, the cinema inside Fortnite is
now showing Quibi’s remake of Punk’d direct
to audiences without any need for them to
leave the game.
One of the many content partnerships that EpicGames have done within Fortnite.
10CONSIDERATION
SPORT
Sport in virtual environments is perhaps an entire
document on its own with the rise of eSports (with global
2020 prize money higher than that of Tennis or Golf),
however the virtual environment elements are perhaps
still showing unfulfilled potential. Showing live sport
inside games is possible, could the next World Cup
be streamed into a virtual stadium? There’s certainly
examples of virtual environments being built specifically
for events, with the MayDay Event in Helsinki. Over
700,000 viewers tuned in to watch the concert stream
live while another 150,000 created avatars to become
active participants in the festival; a total of 10 million
avatar interactions were recorded over the course of the
performance. Using Meltwater’s statistics, the advertising
value of the event was reported to be € 4.3 million.
Finland’s MayDay event saw over 700,000 Fins enter a live virtual environment.
SHOULD WE SEE THESE PLATFORMS AS PUBLISHERS?
SOCIAL PLATFORMS? PROMOTERS?
The future of gaming publishers is potentially across 3 different routes, with different publishers likely
to approach things slightly differently. FIrstly, we should expect to see full integration into social
platforms where you do not need to leave the game to share or create content for a social platform.
The second possibility is that they will look into the creation of their own social platforms - acting as a direct
competitor to both social media networks, content creators and publishers. Finally, it is likely that we will
continue to see the trend of gaming companies being purchased by larger media entities such as Tencent,
Bytedance, Disney, etc.Alternatively, social platforms may wish to begin building their own
virtual environments, the early steps of which we have seen with the rise of social avatars across
Snapchat and Facebook.
11CONSIDERATION
WHAT IS THE ROLE OF VIRTUAL ENVIRONMENTS IN COMMUNICATIONS?
Virtual environments are an audience like any other, no different from a TV show with loyal fans or
a music festival. However, they are usually very large scale global audiences. They can be used as a
direct acquisition channel, or as a way to improve brand visibility or consideration. The challenge for
marketers is firstly one of cultural understanding, and secondly one of message ownership.
CULTURAL UNDERSTANDING-
Virtual environments are usually spaces that audiences have been using way before they became
commercial spaces. As a result, there will be visual and verbal language that brands will need to understand-
from referencing the location names in Fortnite, to knowing the in-jokes and ‘meta’ of the community. It is
important that branded involved is a part of the community, sharing in their enjoyment of the space,
not attempting to co-opt it.
MESSAGE OWNERSHIP-
The biggest virtual platforms currently come from existing games publishers. As we have just discussed,
these are publishers that are greedily eyeing the value seen in broader social networks. Like Facebook
before them, they’ve created rented spaces for brands, that come with no guarantee of future welcome (eg.
Facebook’s organic reach declined rapidly from 16% in 2012, to just 1.2% in 2018, with many brands having
invested heavily into accumulating large audiences on their brand pages over the years).
WHAT DOES THIS MEAN FOR CREATIVITY?
For commercial creatives and for musicians, artists and filmmakers - you’re not limited to the ‘real
world’ or ‘laws of physics’ any more. You can build your own world. No longer do we need to see
existing assets, talent, location or sponsorship opportunities as limitations. Don’t think in the frame
of “Can I create a virtual billboard here?” but rather “What would our branded planet look like?”
Consider how your consumers use your product, what’s the virtual environment equivalent when the
laws of physics can be changed? What’s the gamified version?
Similarly, we know that music is being influenced by platforms like TikTok encouraging users to deliver a
moment or ‘a drop’ as well as a dance. The same thing is likely to happen with virtual environments, with
lyrical references and musical cues that can integrate into the virtual world. Ask yourself - what’s going to be
the gif of the virtual space?
WHAT DOES THIS MEAN FOR MEASUREMENT?
Virtual environments are naturally measurable in a way that the real world never could be. Every user
interaction can be monitored, measured and optimised for in real time. In addition, the data trail leads
to stronger understanding of both brand and direct business metric movements.
12CONSIDERATION
WHAT DOES THE GLOBAL PARTNERSHIP LANDSCAPE LOOK LIKE?
GAME PLATFORMS /
GAME DEVELOPERS
ENVIRONMENTS
EVENTS / CONVENTIONS GAME PUBLISHERS
MEDIA NETWORK VR/ AR / 5G
13SUMMARY
Virtual environments are likely to change the face of media in a similar way to the
launch of TV, radio and social media. They show a shift in consumer expectations
that as we have seen, impacts social interaction, content creation and cultural
output across film, Tv, music, sports and beyond.As Gen Z ages, we’re likely to see
significant growth in this areas, particularly as this is likely to come alongside the
growth of VR and AR technology.
The virtual environment audiences of 2020, however, don’t demand perfection or an
expensive VR world, they’ll make do with low res graphics if the behavioural psychology
beneath is right and this is key to success in the space.
For brands such as yourselves, virtual environments provide an opportunity to engage
with an audience directly via culture rather than interrupting them with pre-rolls or
billboards while delivering the potential for entirely new revenue streams for both
cultural creators and publishers.
In the future, we are likely to see virtual environments interact heavily with digital
publishers and distribution platforms such as TikTok,Facebook, etc. The question only
remains what will this new relationship look like?
Will we see the launch of ‘Planet TikTok’ or instead could it be Epic Games as a social
network/content publisher? At the moment, the audience lead is clearly with social media
platforms, but the momentum may be elsewhere.
FINAL THOUGHTS FOR YOU:
• Virtual environments provide a direct communication channel to new audiences,
how can you deliver your message to them?
• What is your partnership strategy in this space? Build or rent?
• How would your brand’s sponsoship or talent strategy change in a virtual environment?
• What opportunities exist for your product to go ‘virtual’?
• What creative opportunities open up for your brand when you leave the laws of
physics behind?
Drum would welcome the chance to discuss this document and these questions with
you in more detail as well as identifying current and future opportunities in this
space. Please content Ben Bale, Creative Innovation Director, Drum.
bbale@drum.co.uk
14A BIT MORE ABOUT DRUM
DRUM ARE PHD’S MULTI AWARD-
As a result DRUM is one of the most awarded and
successful UK creative and content divisions in the
WINNING BRANDED CONTENT AND business, having been awarded Content Agency of the
Year in 2018 & 2015. In the last two years we have won
CREATIVE DIVISION THAT HELPS over 30 leading creative awards including amongst
AMBITIOUS BRANDS CREATE THEIR
others the ‘full set’ of Gold, Silver and Bronze awards
at Cannes Lions.
OWN CULTURAL SIGNALS; THINGS
WITH REAL VALUE FOR PEOPLE THAT
CUT THROUGH THE CLUTTER.
Headquartered in London and with offices around the
world, DRUM operates at the intersection of advertising
and media, blending together powerful audience and
data insights from the media world with the craft and
creative rigour of advertising on its best day to produce
content with cultural impact for brands. This means on
any given day DRUM are making ads, developing original
entertainment formats for brands, producing ongoing
social work or partnering with media owners and talent
OUR SERVICES SPAN THREE
to create brand stories with editorial context. AREAS ACROSS CONTENT &
Our network of over 150 thinkers, creators and makers
MEDIA CREATIVITY:
have a unique mix of talent and capabilities. We hire
cultural mavens who soak up the world outside of the
Strategic & Creative
office and bring it into their work and who have diverse • Social/Brand/Content Strategy
skills and backgrounds from the worlds of advertising, • F
ull service Creative & Ideation (social,
brands, TV, music, rights holders and sponsorship. We AV, print, DOOH, long-form)
believe that this pays back to the agency and our clients • Brand format/Original IP Creation
enabling us to create end-to-end data inspired creative
solutions that go beyond the ’60 spot. C
ommercial & Partnerships
• Product Placement/IP Integration
• Media and Talent Partnerships
• Influencer management
• Rights holder partnerships
• Negotiation and contracting
production & Delivery
• Production & Delivery
• Project management and delivery
• Creative Production
• Live production and show running
• Design, Branding & Studio Services
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