Why The Future Of Gaming Is The Future Of Tech

Andreas Bubenzer-Paim is Head of Technology Banking at BMO. Overseeing the delivery of financial services to U.S. technology companies.

Did you know the global gaming industry outperforms the revenue of both the movie and music industries combined? It shouldn’t come as a surprise, as the gaming industry has long been a leader in the tech space. The industry has evolved from a pastime for young kids into a mainstream, multibillion-dollar industry that develops cutting-edge technology.

Applications such as virtual reality (VR), augmented reality (AR), 3D modeling and motion capture have their roots in gaming. And many industries outside of gaming have adopted these innovations to boost productivity, improve the client experience, increase engagement and boost sales.

Let’s look at three areas where we could see exponential growth.

Generative AI

One of the reasons generative AI tools such as ChatGPT and Google Gemini are having their moment can be traced to the gaming industry. Gamers demand realistic graphics, which require even more powerful graphics processing chips. For most of its three decades, Nvidia was known for its powerful graphics processing units (GPUs) and graphics cards, which enable the output of high-quality 3D visuals.

Traditional CPUs are good at solving highly complex calculations, while GPUs are good at doing many slightly less complex calculations in parallel at a very high speed. That was originally meant to help with fast, high-quality gaming graphics, but it also turned out to be the perfect fit for the types of calculations AI models need.

Nvidia leveraged its expertise in gaming to develop chips for more general computing processes, including calculation-heavy processes such as machine learning. Today, Nvidia’s AI chips are the go-to option for OpenAI (the developer of ChatGPT) and AI data centers worldwide. The company went from being a highly successful but niche chipmaker for the gaming industry to the most valuable company in the world, recently topping Apple with a $3.43 trillion valuation.

The connection between gaming and AI cuts both ways, as AI is becoming more integral to the video game experience. Some common uses of AI within gaming include altering in-game landscapes or changing the behavior of non-player characters (NPCs) based on human player decisions.

This ability to change video and audio in real time results in a very personalized gaming experience, which could lead to a similarly customized approach to online shopping experiences. Think of an online store, on a website or in the metaverse, that automatically adapts its setup and presentation based on your preferences and behavior.

Virtual Reality

Virtual reality (VR) allows gamers to be immersed in a simulated 3D environment where they can interact and explore virtual surroundings that approximate reality. Although the adoption of VR by industries such as healthcare, retail and tourism is on the rise, the use in gaming has been slow due to high costs, uncomfortable equipment and a limited library.

These barriers are forcing innovation from video game developers for new hardware that is more comfortable to enhance the gaming experience and lower cost. As a result, gaming has been at the forefront of VR-related hardware innovation such as controls, screens, headsets, speakers and consoles to create an enhanced consumer experience.

The previously mentioned industries are ultimately also going to benefit from this improved hardware and user experience, likely increasing adoption by their employees.

Metaverse

The metaverse is a virtual world where people can interact with each other in a digital environment. Experts believe gaming will be the gateway into the adoption and understanding of the metaverse.

As a report by Ernst & Young pointed out, popular games like Minecraft, Fortnite and Roblox have incorporated several aspects of the metaverse, including virtual worlds where players meet to play games and use features like in-game chats and in-game payments.

These games are doubling as social spaces where gamers are building an active online community. At some point, this could expand to virtual office communities, allowing workers in remote or home office locations to feel much more connected to their teams.

Gaming’s Influence In The Office

Gaming techniques and experiences are crossing over into the corporate world. More and more companies are realizing the potential power of integrating game-like elements, such as rewards and challenges, into their processes. The global gamification market reached a value of $14.5 billion in 2023 and is expected to grow to nearly $48 billion by the end of the decade.

Companies mostly use gamification to boost employee productivity and engagement, as well as to foster customer loyalty. It’s used across a variety of industries, including retail, financial services, healthcare and marketing. Some examples of using gamification include:

• Challenges in employee onboarding or training programs to reinforce company policies and values.

• Rewards and points that can lead to prizes to boost employee motivation, particularly for accomplishing mundane administrative tasks.

• Loyalty points/rewards to drive customer purchase behavior and loyalty.

Expect more advanced gaming features—such as the metaverse—to infiltrate nongaming business activities. Think of virtual real estate tours, virtual concerts, remote meetings and immersive training programs.

Not everything that’s being hyped today will become essential in the future. But wherever you are in the tech landscape, if you want to see where you can get a head start on innovation, look to the gaming industry.

Disclaimer: This report is for informational purposes only. The opinions, estimates and projections, if any, contained in this document are those of BMO as of the date hereof and are subject to change.

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