Gaming is an emerging opportunity as brands look to connect with difficult-to-reach audiences. Activision Blizzard’s CMO, Fernando Machado, spoke to WARC’s Anna Hamill about creativity in whitespace, the metaverse, fandoms, and misperceptions about gaming.

How would you define Activision Blizzard’s approach when it comes to creativity? And how does that approach to creativity differentiate your brand compared to your competitors?

I come from a background of CPG and QSR. For sure, there was creativity embedded in those organizations, like how you go about creating the products or marketing. But no place I have worked before gets close to the level of creativity that is inherent to the business at Activision Blizzard. The core – the essence of the business – is creativity.

If you go to the studios that create the games, they are next level in terms of creativity because they are creating new worlds, stories, characters, and designs. So the essence of the business is pure creativity. When it comes to marketing, I think that we come in thinking we need to understand the games, right? We also need to really understand the community, because I’ve never seen a community or a consumer base that is so loyal and so obsessed about the products.

Has the way that Activision Blizzard communicates in terms of its tone, style, channels evolved with your customers over time?

I think that the whole gaming industry is evolving. The way gaming companies used to go about marketing products was very different. I remember as a kid, I would play a game and then I would buy the new one the following year. But today, that’s not how it works.

Today’s games are live, they’re always on. You cannot even pause because you’re playing live with your friends and you’re talking to them. So the way we engage and the way we advertise, and even the cadence of advertising, is different to what it was like years ago and it is evolving daily.

I think that, for a while, the games model had been somewhat similar to launching a movie. You create like this blockbuster moment. You have a trailer and you have the accolades trailer and all that good stuff. I think it’s evolving to be much more than just that and truly engaging the community in ways that was not possible before, because gaming was not always on and because people are not as connected as they are today. I think that we are going to see lots of breakthrough campaigns done in very different and unusual ways.

What do you see as the biggest trends coming down the pipeline that your brand is needing to respond to, and adapt to?

I think that because gaming is evolving so fast, the key thing for brands will be to experiment, learn fast and improve. No one is doing the perfect thing. I think [the gaming industry] is still far from hitting hard in terms of creating truly breakthrough things that will connect people like you have never seen before.

When I think about observations that I see in the market that could lead to great creative, I see things like blurring the lines between the real and the virtual world. We already have ideas around that. I see a lot of potential for collaborations, because brands are really interested in partnering with gaming companies. We just need to find the right way to partner. I see a lot of opportunities to create really amazing experiences and memories for people through marketing and through the game itself.

I think those would be the key things that could unlock great creative and accelerated growth, especially if we can explore and come up with ideas that tie back to the marketing objective, whatever that is – for example, selling a game, increasing revenue with existing games or increasing engagement. I think that those are good starting points in terms of things to explore.

It sounds as though you have a lot of whitespace to work with in terms of really creating the future of your category.

I think that is one of the reasons why I am so passionate about the industry, and why I decided to come and work here. I think that the possibilities are unlimited.

Gaming, to me, is the next frontier. You’re creating worlds and meaningful connections among people, and people are just obsessed with the games. It’s really next level, and with that, you have an infinite number of opportunities to create not just advertising but to expand on the level of connection that people have with each other and with the game itself.

What have you learned about collaboration while working in a remote or hybrid situation? Is it easier? Is it harder?

I think it depends a bit on people’s personalities. For me, it was not easy to start a new role virtually, and if you haven’t done that yourself, you probably don’t think much about that because it became the norm… I think it took much longer for me to establish true meaningful connections with people. I really value creativity and like to push strategy, which should be a competitive advantage to the brands. So I was used to spending the whole day just walking around and having meetings with people informally, or going to the agency, or with my team. We can do it on Zoom, but it’s not 100% the same.

Hopefully, we’ll find a happy medium. We will adapt to working more virtually. But I think that you do need – every now and then – to be in the same room with people having a conversation, or a formal meeting, or getting a lot of stuff done just by walking around.

What is the biggest opportunity in gaming that you think the wider industry is overlooking right now?

When I was working in QSR, I was a gaming fan. I was personally interested. I knew how big the industry was and that it wasn’t just a niche. I think at many brands – especially the more senior you go in an organization – the perceptions that people have about gaming are from years ago. We don’t even use the word ‘gamers’ anymore, because it’s for everyone. If you look at all the franchises, you absolutely cover everyone.

People don’t understand that gaming started by connecting people. They might think it’s this very lonely activity that a dude is doing in front of his PC, in the dark in the basement, when actually it’s fun, it’s connecting people and people are getting to know each other. I actually have two people in my team who found their partner on World of Warcraft.

Sometimes people don’t see that side, and they don’t see that gaming could be an enormous opportunity for their brand and for their business. As long as you find a way to leverage the right way, like in the right franchise, and understand what makes the community excited, there is a way for your brand and company to add value to the experience of players.

What does brand partnership look like within that gaming experience? What’s the pitch? Is it product placement? Is it sponsorship?

Different combinations of things can be done, and from what I’ve seen, the best way to go about it is usually not just doing one thing. It starts with a conversation between the brand and us where we can educate them in terms of how the gaming space works and what our franchises are about. They can indicate to us what they’re trying to accomplish… We can then pinpoint like one or two or three franchises that have a good fit in terms of target audience overlap, values, personality and positioning.

The ideas can be something as simple as buying media in one of our games, like Candy Crush. That’s very efficient and we can measure everything. Or it could be creating a program where they have a limited-time offer product in partnership with one of our franchises. It could be investing marketing dollars at the same time as they’re launching something with a franchise, but it’s usually a combination of all.

We’ve done partnerships between Diablo and Burger King in Korea. Mountain Dew has been a partner of Call of Duty for a very long time. In the past few years, we have had a limited edition can or product or content that brought the franchise to life. We give extra points through codes with Mountain Dew and we create marketing assets together.

I would say that the most important thing is to start with the right foot forward, which is understanding which franchise to go for, understanding what the brand is about and then thinking together about what we can do to achieve the opportunities and objectives the brand has.

How do you think about engaging fans from the perspective of lifetime value, as opposed to just buying the next game when it comes out?

Lifetime value for players, depending on the game, can be incredibly high. There are people who’ve been playing World of Warcraft or Call of Duty for [nearly 20 years]. Candy Crush is ten years old this year. These franchises have been around for quite some time.

We are constantly listening to fans, they are very vocal when they like and when they dislike something. So in that sense, it’s helpful, because you know very quickly if you have to fix something or if you have to engage in dialogue to explain why you were going about it [a certain way]. We may agree to disagree, but at least you can address the point. Social listening is critical. Reddit, Discord and Twitter are very, very active and always put forward a point of view on things.

I think it’s key that the brand is also humble and transparent when you engage in that conversation, and especially in the key moments when you’re launching a game or you have an expansion pack coming out. Our marketing contemplates that dialogue. For example, we usually have a film with the development team explaining things that are 30–40 minutes or even an hour long. We also carve out space on social media to interact with fans.

People keep coming back. I think that having good customer service, like not being too greedy in the way you go about things and engaging people and talking to fans… It matters. I think those are the attitudes that can contribute to people becoming loyal toward franchises over time.

The metaverse seems like a natural fit for the immersive worlds of gaming. What’s your view on these technologies?

Metaverse has definitely been the buzzword of the last six months. I played Second Life in the early 00s – it was so long ago! – and that was already something like the metaverse. If we think about the way people play World of Warcraft or even Call of Duty or Diablo, people are [already] immersed in that universe and connecting with others and meeting new people. That’s how we touch base.

In gaming, historically, so much of that was already there. Many people talk about the metaverse as if it was like a brand new thing, which I found a little weird because many of those things have existed for years now in gaming.

So to me, it’s not that new. I’m always personally skeptical when everyone’s talking about the same thing and everyone is converging on a buzzword. I always feel that maybe [at that point], it’s not as new. We’ve been doing some of that in gaming for many years now.

What lessons do you think other categories can learn from how you approach marketing in the gaming space?

I think that other categories should focus on learning about how gaming connects people and how it creates such a strong fandom. In terms of marketing, it’s still evolving. If I were in a different category, I would be looking at the things that gaming companies are doing to connect and engage people in terms of peaks of engagement and in driving monthly or daily active usage of games. I’d be looking at how brands are partnering with games to reach an audience which is very into the game and not really paying attention to other stuff while they are playing.

Marketing in gaming will evolve a lot. I would surely look at how people are experimenting and doing things differently. I think there is still a lot that can be done.

As a marketer and a creative person, what do you see as the biggest challenges and opportunities facing your brand in the next 12 months?

I think in the case of gaming, we are all trying to write the future. No one has cracked it perfectly in terms of the model. Perfection is something we are always chasing, but never exists, so I believe that the companies that are able to experiment more and learn fast will succeed. I’m constantly thinking ‘How can I experiment more?’ and going beyond just doing the tried and trusted, which we will always do. How can we go above and beyond that?

In my specific case, I’m still relatively new… One of my personal challenges is finding ways to influence the organization to try different things, and to experiment. How can I deliver results in the short term, so that the company becomes even more comfortable with trying different things and starts believing that we need to push the boundaries?