We look at the impact of ongoing regulator scrutiny and changing industry models alongside opportunities for accelerated growth. The convergence of trends in the industry (games as social networks and content platforms, cross-media integration, cloud gaming, and subscription services) is underpinning buoyant times for investment and M&A activity in the sector, and provides a foundation for exciting and innovative opportunities and partnerships.
This guide is for innovators, creators, founders, and investors from developers (indies as well as larger businesses), publishers (across all platforms including mobile), and operators, showcasing our in-depth sector insights based on our work with some of the most exciting and talented businesses globally.
Growth and challenges
The video games industry is one of the bright spots in an economy that has been significantly challenged by the global pandemic, with increased global market size of over $170 billion in 2021, up from $148 billion in 2019.
However, the sector's growth has attracted increased scrutiny. We are seeing renewed concerns over player protection from potential social and financial harms as well as challenges on advertising, marketing, and data protection issues. These are growing pains for a maturing industry which will present opportunities as well as challenges.
Trends, new players, and new markets
The tech majors continue to make strategic plays with cloud gaming, VR, cross-media integration, and subscription models, paving the way for new technology and innovative revenue models as games become more accessible, immersive, and integrated with other media.
Mobile maintains its position as the dominant gaming platform, and the combination of casual games supported by flexible revenue models and minimal barriers to user acquisition has increased the addressable market.
Console gaming was strengthened by the successful launches of PS5 and Xbox series X at the end of 2020, with global lockdown measures providing fuel for accelerated growth in ARPU.
Video games continue to evolve as new social platforms in their own right, and communities built around popular titles like Fortnite, League of Legends Rocket League, or Animal Crossing now come together in-game alongside social media platforms like YouTube and Twitch.
How can we help?
As the industry goes from strength to strength, it will be increasingly crucial for stakeholders to innovate when navigating regulatory frameworks that are evolving at pace.
Challenges around increased consumption, player protection, monetization, organisational operations, and growth will need to be addressed while businesses innovate in an industry that shows no signs of slowing down.
Our global experts excel at helping navigate the exciting and continually developing ecosystem of innovation, opportunity, and challenge in the gaming sector.
If you would like to discuss any of the issues covered with one of our specialist international Games team, please click here.
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