One of the most intriguing developments in recent years within the music industry has been its intersection with the world of video games.
The commercial alliance between these two distinct forms of entertainment has been propelled by various factors, including shifting consumer preferences, the need for virtual performance spaces during the pandemic, and the mutual desire of both industries to expand their reach and revenue streams.
The collaboration between the gaming and music sectors has become particularly pronounced in the field of in-game music.
Game soundtracks have been a key part of the gaming experience since the seventies, with the likes of Tomohiro Nishikado’s lo-fi Space Invaders theme forming a crucial sonic backbone to an iconic gaming title.
But today, games feature orchestral compositions that, like that of the Final Fantasy series, have the potential to become successful businesses in their own right.
Plus, licensed tracks from superstar artists contribute to the overall entertainment experience of popular gaming franchises from Rockstar’s Grand Theft Auto series to Electronic Arts’ Madden NFL – while generating revenue for rightsholders at the same time.
According to UK-born Reactional Music, the next phase in this convergence of music and games will be the real-time personalization of soundtracks and music during gameplay.
Reactional has developed patented technology that does just that – and the company claims further to be “the missing link” between the music business and “the next generation of interactive and gaming worlds”.
Reactional was started in 2020 when three senior video game veterans connected with a music tech team led by classical composer Jesper Nordin who invented the underlying tech. One of those execs is President David Knox, who spent 26 years in senior global management positions at video games giant Electronic Arts.
Combined, Reactional Music’s team has launched and worked on a few high-profile games including Guitar Hero, Rock Band, Grand Theft Auto, and FIFA, while on the music side, Reactional execs have worked at companies like Spotify, and Sony Music in addition to having composed music for top orchestras.
In Reactional’s view, the convergence of music and gaming presents a growth opportunity that hasn’t yet been fully capitalized on by the music and gaming industries.
Key to this growth potential, according to Reactional, is in-game spending. Citing estimates from MIDiA Research, Reactional notes that games have an estimated total annual revenue of $187 billion and that in-game spending accounts for $130 billion of that.
“For the most part, music accounts for close to zero of that spending,” says David Knox. “Of all the things you can personalize in a game, the one thing you can’t control or make your own choices around is music.”
Reactional Music set out to fix that and claims to be “changing the way we can all experience, interact with, create, share and enjoy music in games and creator worlds”.
With Reactional’s technology, users have the ability to personalize their gaming experience by selecting and purchasing music from their favorite artists.
In addition to in-game purchases, the other key to the company’s business model is its patented generative music engine, music delivery platform and creator tools.
According to Reactional, its engine can incorporate any music library and enable game developers to customize how the music reacts to gameplay. (You can see a demonstration of this in the video below).
But as Knox stresses in our wide-ranging interview below: “We are not an AI platform”. He adds: “We do not use machine learning or create any new works from catalogs we sign for the platform”.
Looking to the future, Reactional estimates that there will be 3.8 billion gamers by 2030, a vast addressable market for a new and potentially very lucrative revenue stream for music rightsholders.
“Music has always been a core component of video games but has traditionally been viewed as a cost, rather than a revenue generator.”
David Knox, Reactional
“The opportunity is extraordinary,” says Knox. “Music has always been a core component of video games but has traditionally been viewed as a cost, rather than a revenue generator.
“However, the convergence of music and games technically and creatively has long provided a huge opportunity for a change, which can now finally happen through music personalization and gamer-driven music inside the games.”
Over the past few months, Reactional has signed a number of partnerships with the likes of Tuned Global, Hipgnosis, Sony and Universal-owned production music firm APM, as well as a deal with mobile games publisher Amanotes, which reaches 100 million monthly users.
Here, six months after Reactional raised $2 million, David Knox tells us about the opportunity for music in the gaming industry, how the company’s technology works, and its plans for the coming months…
Could you give us an overview of the technology that underpins Reactional Music?
Visuals in games have gone from hardcoded to rule-based (physics engines, shaders, and similar) during the last decades, but music has not kept up. Reactional Music enables composable generative music.
This means that the music can become more granular and gamer-driven, but also that it opens up the possibility of using commercial music as an in-game purchase without having to hard code a specific song to a specific game scene.
“Reactional Music uses its patented core technology to drive in-game music on a note-by-note basis, which means that the game is aware of the key and tempo of each musical asset it is playing.”
Reactional Music uses its patented core technology to drive in-game music on a note-by-note basis, which means that the game is aware of the key and tempo of each musical asset it is playing.
When a recorded track is brought into the game, everything in the game – both visuals and sounds – can then react to that track. This means that Reactional never touches the master file of a song – it adapts the game around it instead.
Reactional Music enables generative composable music, but it’s not AI – could you give us a bit more insight into how your patented generative music engine works?
The term generative AI as it is used today is based on machine learning and huge datasets, and that is not how the generative aspects of the Reactional technology work. Instead of using machine learning and mimicking large datasets, Reactional lets human composers make their work relative and reactive instead of hardcoded so it can adapt to both gamer actions as well as gamer music personalization.
“We use AI, but never for the generative parts of the music.”
This part of the Reactional technology is what we call an Interactive Theme. Just like the main theme in a movie – which can be adapted to different scenes through instrumentation, tempo, intensity, and so on – a Reactional Theme can be changed in real time by gamer actions.
For the commercial music to be able to be brought into this we analyze all tracks that we ingest and tag them with metadata for beat, pitch, genre, and so on. For that analysis, and for user recommendations, we use AI, but never for the generative parts of the music. We do not use machine learning or create any new works from catalogs we sign for the platform.
AI-generated music is becoming more and more prevalent. What are your predictions for the use of AI music in gaming and could you share your views/concerns around this topic?
What we know, firstly, is that you can’t undo technology, whether you believe the impact of a new capability is positive or negative. Our view is that technology should always be embraced and harnessed where it can be a positive influence on commercial and creative capability.
“Our job is to ensure that gamers are able to enhance their gaming experience with the music they love.”
We are not an AI platform. You could create AI music separately and make it work with Reactional, but this is not something we are pursuing. The appeal of what we are doing is the gamer saying: “I want Dark Side of the Moon in this game, or the Dead Kennedys or KISS or some EDM”.
Our job is to ensure that gamers are able to enhance their gaming experience with the music they love, the artists and genres they listen to and consume music as part of their gameplay, to be in control of those choices, then share them and to try new things and for this to become part of the gaming experience.
Reactional has previously said that it wants to “re-write rules for music and video games” with in-game music purchases. How key are in-game purchases to Reactional’s business model what are your predictions for how big a revenue stream this could become for music rightsholders?
The starting point is clearly having a technology that enables music to seamlessly integrate into a game in real-time. This has been the major leap forward. From this, we were able to begin our understanding of what is possible creatively and commercially between creative industries that have fundamentally different models.
For music companies, it opens up a $187 Billion global business, where 75% of that revenue comes from in-game economies. Different games, different genres, every region, every device and gaming format.
In the digital entertainment landscape, gamers and music fans are a key audience overlap, with MIDIA Research revealing that the most engaged gamers are also some of the most avid and engaged music fans.
“Generative composable music opens up the ability for a game to instantly adapt to any song, audio piece, sound effect, voice or whatever.”
‘Gamer aficionados’ – those who play for above 10.8 hours per week – also stream music for 7.6 hours per week, a rate over double that of the average consumer.
45% of these gamers regularly stream music and have a music subscription, which is more than double the consumer average of 21%. Their music activity however goes far beyond audio streaming, engaging with all other key music activities at around double the rate of normal consumers.
Engaging games aficionados with music is important not just because of the scale of the opportunity, or even the growing role music plays in games, but because games are where some of the world’s most valuable music fans spend so much of their time.
In addition, Reactional’s own consumer research has revealed that gamers want more from the music in their games. Gamers want more choice, the ability to share music choices as recommendations, to personalize their experiences with music as they do with skins, and hear music and sound as ‘punctuation moments’ for different actions.
Let’s not forget, music will play in the game, harmonically sensitive and in time – if that’s what the developer sets up – with gameplay. Generative composable music opens up the ability for a game to instantly adapt to any song, audio piece, sound effect, voice or whatever.
It’s so powerful and so compelling.
Reactional is currently in beta and running tests with game developers. Could you give us an insight into which developers those are and the results of the tests so far?
We are working with a group of developers that fall into specific tiers of activity. This gives us a good insight into all areas of game development. This helps us and the developer learn more about what works, where the friction points are, and what the solutions are. It has been invaluable this last two years of work.
Essentially all the developers we work with fall into all the key commercial strands of the games business: retrofitting to existing games, high-traffic mobile games like Amanotes, new XR, VR worlds, and some of the main games platforms and developers. It’s in the dozens. We are bound by the partner’s confidentiality as it’s their call when they want to go public and how they choose to do that.
It has been great to see that from the technical audio teams through to commercial leadership, the games industry understands the value of what we are doing. There is a tremendous creative relationship between some of the music technology people and composers we have at Reactional and the people driving existing and new forms of generative gaming.
You have signed partnerships with the likes of Tuned Global, Hipgnosis, and production music firm APM. Do you have any more partnerships to announce in the near future?
Commercial music will be a primarily B2C opportunity. We don’t foresee a game developer building a soundtrack around a few commercial tracks; creatively and economically it probably doesn’t make sense. The commercial music opportunity is a direct-to-gamer opportunity, where either new games or games that retrofit the Reactional platform can enable their customers to start personalizing their gaming experiences.
“Our roadmap in the first phase is to build our B2B relationships, which means direct to game developers, using the engine and access to a largely production music-based catalog.”
We have multiple music rights partners. Our roadmap in the first phase is to build our B2B relationships, which means direct to game developers, using the engine and access to a largely production music-based catalog.
In this area, we have some fantastic partners who are working with us to build a direct to a developer platform. This music is used as part of the game design, where mood and emotion are key search parameters. We have been lucky to work with some great production music organizations who understand the sector well.
Reactional closed a $2.05 million Pre-Series A funding round earlier this year. Are there plans for additional funding rounds in the near future?
As we move through our roadmap expanding from the closed beta and initial project launches we need to increase development to automate the technology as part of scaling to meet demand. We have also identified key positions to be filled to execute against opportunities on both the music and games side. We have therefore started discussions already as part of delivering funding to meet our goals.
What are your ambitions for the company’s growth and positioning in 2024 and beyond?
In 2024 Reactional will continue to engage with key rightsholders across the board. We will increasingly drive closer collaboration between artists and game developers to deliver new and exciting creative and commercial opportunities.
“We envisage the power and flexibility of the technology to reach across all interactive experiences where music could play a role.”
We envisage the power and flexibility of the technology to reach across all interactive experiences where music could play a role.
Unique in its positioning as the only generative music solution supporting recorded music the expectation is for the Reactional Engine to underpin audio in a large percentage of the games market opening it up to all rights holders.
What are your predictions for the convergence of the music and gaming business in the coming years?
The really exciting thing for me is to see where this takes things creatively. Reactional brings music and games close together, yes, but perhaps most interestingly it brings the ability to bring the music artist and composer closer together with the game developer.
The creative axis for developers and artists is really exciting.
“The creative axis for developers and artists is really exciting.”
On the surface, we know lots of artists are big gamers. So the idea that the artist can now think about music and creativity from the point of view of gaming could take us into new areas of creation. An artist may wish to create a series of tracks to preview within games, or perhaps with a specific publisher, developer, or games franchise.
Additionally, from an A&R point of view, this can be a new music discovery platform. From a promotions and marketing perspective there are new things that games and music can explore together.
And then there is the data. Games companies know a great deal about their customers; music much less so. The relationship for the music company is with a third-party distributor of their music.
If there was one thing you would change about the music business, what would it be and why?
I’m not sure we as a group are in a position to tell the music industry what it should or shouldn’t do. Personally, coming from a place of games I would say to the wider music industry, don’t always be suspicious of new technology and new ideas. The games industry has traditionally embraced new technology and is constantly re-inventing itself. Music is perhaps sometimes hesitant and on occasion, it has paid a heavy price for that approach. Equally, I’m sure there are examples of where hesitancy has been the prudent approach.
“The games industry has traditionally embraced new technology and is constantly re-inventing itself. Music is perhaps sometimes hesitant and on occasion, it has paid a heavy price for that approach.”
Music is part of all of us. Outside of family and self, it is singularly the most important external part of who we are as individuals. It speaks to us like nothing else. Music has a place in everyone’s lives; between now and 2030 there is an incredible opportunity to redefine its place and be at the center of new and emerging consumer platforms, whether that’s games, Web3, creator worlds, live experiential, XR, AR, VR and the like.
Accepting that there is significant complexity in licensing music, a passion to ensure that the right content is available for these markets with the right technology to maximize the creative and commercial opportunities is critical. There is a need to embrace it and move quickly.
The models that have driven music for 100 years can adapt to these new opportunities and platforms. My only concern for music is hesitancy and therefore a void that can be filled by AI-generated content that will be “good enough” for many situations.
By working together with forward-looking tech companies that have the rightholder’s perspective in mind I think we can avoid that scenario!
Music Business Worldwide
