NewZoo released its 2023 video games report, which provides a comprehensive analysis of the industry, key trends, market size and an outlook for the future. Encouragingly, it predicts that both market revenues, +2.6%, and the number of worldwide players, +6.3%, should increase in 2023, after the first-ever decline in 2022. Gaming is back on the up! We explore some the of the key themes in more detail below.
Gamesindustry.biz has been doing a week focusing on the Italian video game market, which now employs 2,400 (up 50% vs 2021). Unfortunately, the industry is still mostly self-funded, with 86% of businesses saying they finance their companies themselves, though this is down from 93% in 2021. The other point of concern is that 30% of these jobs are art focused, which seems the most likely area to be streamlined by the development of GenAI. Regardless, its great to see another booming European games market.
News of the week
NewZoo 2023: Key Trends
Live Services: The increasing popularity of live-service games on PC and console is evident, with many companies seeking to monetize current players further, diversify their revenue streams, and increase their total addressable market. However, the sustainability of this trend is questionable, due to the influx of time-consuming live-service content among a finite number of players and playtime, and the additional gains of this extra spending have to be considered as saturation increases.
Generative AI: Gen AI is also making a significant impact on game development, with potential to turn RPGs into infinite living worlds that can grow organically with the player. The report is positive over the development of this technology increasing innovation and growth within the sector. However, it notes that the legal implications of using AI-generated content in games are complex and could potentially open developers to copyright infringement lawsuits as exemplified by the Getty Images vs Stable Diffusion case.
Mobile Gaming: The global games market is expected to generate revenues of US$187.7bn in 2023, with mobile gaming accounting for just under half of the entire global market. NewZoo expects a CAGR in players of 4.7% to 2026, with many of these Mobile gamers. However, mobile game publishers are facing challenges due to privacy-related changes, which limits ad networks' ability to use user tracking to optimise marketing campaigns. This was the cornerstone of targeted mobile gaming marketing, and with both Apple and Google bringing in measures to curtail access to this information, a new strategy needs to be developed.
Geographical Analysis: It was no surprise that Asia-Pacific was the main contingent of both the number of gamers and the total market size. However, one thing we did think worth pointing out was that the Middle-East & Africa make up 17% of players worldwise, that is more than the 13% Europe has or the 7% NA has. However, ME&A market makes up a significantly smaller percentage of the market size, well behind both NA and Europe. It underlines to us the growing reach of the industry and the potential for the total market size, as these geographies begin to spend more on gaming.
We also want to extend congratulations to Emma Macdonald, who was recently appointed NewZoo’s COO after 10 years at the company.
Source: NewZoo.com
China’s gaming limits are ineffective
China's video game time limits for minors, enacted to curb addiction, have shown no impact on excessive gaming, as per a study published in Nature Human Behavior. Researchers collaborated with Unity to analyse over 7 billion hours of playtime and 2.4 billion Chinese gamer profiles from August 2019 to January 2020. Despite regulations capping daily playtime at 1.5 hours (3 hours on holidays), heavy gaming (4+ hours daily, 6+ days/week) prevalence did not decrease post-regulations. In fact, there was a slight, statistically insignificant, increase. The study highlights the need for data-informed policymaking, shedding light on the broader impact of government decisions. Source: gamesindustry.biz
Supreme Court backs Apple, for now
We mentioned recently about the struggle between EPIC and Apple which centres on games within the app store,being able to provide links to bypass paying through the app store (a process known as ‘steering'). Apple was court ordered to do so which it then appealed, meaning the rule was not enforced. EPIC challenged this, arguing that the rule should be enforced despite the appeal, but this week a court ruled in Apple's favour, meaning the rules will not change until the appeal is heard. Apple recently reported record App Store revenue in June 2023, much of which is generated by the 30% commission it takes on payments. Source: appleinsider.com
In other news...
- Twitch viewership up 5%
- New Acid Wizard Studio announces indefinite hiatus
- PlayStation console sales up 27% YoY
- Embracer shits down Campfire Cabal
- New Zealand approves Microsoft’s acquisition of Activision Blizzard
- Google opens Indie Games Fund 2023 applications for Latin American game devs
- Inworld AI raises $50m for open-source version of character creator
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