Edition #10: Gaming's "CGI moment", Microsoft's AI philosophy, and predictions for the industry

Welcome to the tenth edition of the Games Media Digest—we're in double digits!?

In this release:?

?? Supercell’s strategy?

?? How Microsoft thinks about AI and gaming?

??? Why gaming will revitalize consumer investing?

And much more...?

Standout news, commentary, and analysis?

[Konvoy Ventures] Gaming subscriptions are losing their value. The subscription model makes less sense in gaming than in industries like TV and film, for two main reasons: overall value for money per piece of entertainment consumed, and the popularity of free-to-play games.?

[PocketGamer biz] Saudi Social Development Bank backs esports and game development with $122m. The expanded financing portfolio has supported over 30 clients across esports, game development, publishing, and gaming centers.?

[Variety] Top Roblox game Brookhaven acquired by Voldex. Perhaps a watershed moment for UGC and solo development—congratulations to Brookhaven dev Wolfpaq!

[VentureBeat] Game investments and M&A totaled $17.5b across 985 deals in 2024.?This is up on last year if one doesn’t include Microsoft’s deal with Activision Blizzard.

[Konvoy Ventures] Gaming will revitalize consumer investing. More good content from Konvoy Ventures: “...we believe renewed [venture capital] investor interest [in the consumer segment] will be driven by near term gaming exits.”?

[VentureBeat] Room 8 Group hires game dev and tech leaders and consolidates brands. We've enhanced our Technology and Game Development offerings and have hired two veterans to lead those solutions—for more details, click here!

[Deconstructor of Fun] Why some puzzle games are more addicting than others [sic]? "In a puzzle market that's increasingly resembling a red ocean, hybridcasual puzzles provide a strategic middle ground."?

[PocketGamer biz] Ukie proposes 53% tax relief for small game studios in the UK. The trade body is urging the UK government to allow a 53% tax relief rate for projects with budgets of ￡10 million or less.?

[GamesIndustry biz] Valve implements dedicated page for advertising guidelines. Valve emphasizes that developers "should not utilize paid advertising as a business model" such as "requiring players to watch or otherwise engage with advertising in order to play."?

[SuperJoost Playlist] The next big games conference. The ESA is planning a new event in Vegas with the aim of connecting gaming with “other entertainment and media sectors.”?

[Engadget] Shadow of Mordor's innovative Nemesis system is locked behind a patent until 2036. This is despite Shadow of Mordor developer Monolith recently being shuttered by Warner Bros.??

?Microsoft’s gaming and AI ambitions?

In a recent interview, Microsoft CEO Satya Nadella shed light on his company’s grand, top-line strategy related to AI and gaming. Important stuff, given Microsoft’s outsize role in the industry—and in all our lives more generally.

Microsoft, led by Nadella:??

• is using gameplay data from a catalog of games to train Muse AI, its new model that will generate its own games;?

• believes AI right now presents gaming’s “CGI moment”;?

• plans for Muse AI to be a "general action model and a world model" as well as a gaming model.??

"I think about gaming data as ... what YouTube is perhaps to Google, gaming data is to Microsoft." - Satya Nadella?

Watch the interview here.?

User-generated insight: The best of LinkedIn in February?

Now for a change of pace: here are some insightful LinkedIn posts from around the industry this month.?

The stickiness of Nintendo games (Colan Neese, mindGAME Data)?

“While it’s easy to focus on the decline in revenue [in Nintendo’s latest earnings report] ... the real story lies in Nintendo’s incredible long-tail success,” writes Colan Neese, Commercial Lead at mindGAME Data. ?

One potential reason for this long-tail success is the fact the Nintendo ecosystem is somewhat closed. As Neese writes in the comments: “If all I owned was a Switch (which has to be a lot of people) they are more likely to buy what Nintendo promotes (their titles) vs anything else [sic]. So this really is a testament to network effects.”

Whatever the reasons, “Nintendo’s secret sauce has always been its ability to create games that resonate far beyond their launch window,” Neese writes. Check his post for all the data. ?

10 predictions for the games industry in 2025 and beyond?(Dima Karpenko, Room 8 Group)

Dima Karpenko , our excellent Market Research & Analysis Team Lead, wrote a LinkedIn article, using his and Room 8 Group’s own market research, predicting where the games industry is headed in 2025 and beyond.

?? Why might game prices go down, not up as some have argued?

?? How is the market challenging traditional notions of what makes a ‘good’ game, and how will developers adapt??

?? How will geographic redistribution change game development??

Read it here.

Supercell's success and the ‘safe bet’ paradox (Pedro Vieira, Spielworks)?

While much of the industry is in disrepair, Supercell is increasing its workforce by 30% and posting record annual revenues.

“Why haven’t we been able to create new innovative game experiences for players?” Supercell’s CEO recently wrote. “It’s part of our responsibility to take more risk.” ?

Supercell has released just one new game in six years. Its recent revenue surge has been partially because of increased marketing spend, but in an industry where old games are winning big, the company is in no rush to churn out games that don’t meet their standards—or to acquire other companies.

As Vieira writes in his post: “The real question isn't ‘can we afford to take creative risks?' It's 'Can we afford to keep buying innovation instead of building it?’”?

Room 8 Group news and content?

Room 8 Group strengthens game development and technology offering with new leadership and business structure???

We recently enhanced our solutions in two main areas—Game Development and Technology—to better set us up for delivering high-quality complex engagements for our partners!

To lead these areas within our new-look structure, we’ve hired Guillaume Carmona as VP of Game Development and Yann Le Tensorer as VP of Technology.?

Read this for more details!?

Downloadable report: Game Development Industry Survey 2025

Earlier this month we publicly released our Game Development Industry Survey.

We surveyed 79 games industry insiders from companies like Amazon Game Studios, Blizzard Entertainment, SEGA Europe, Sony Interactive, and dozens more—91% of whom have decision-making authority in the industry—asking them 24 questions about game development and their company’s approach to it in 2025 and beyond.

We’ve created a report based on our findings, which you can download now.

Introducing Banana Defense, our new Fortnite game??

General Banana is craven, selfish, mad with greed. Like Caligula’s horse, he is unworthy of the rank bestowed upon him.?Now, the duty to protect the old fool has fallen upon you. Just don’t expect him to fight with you…

Play Room 8 Group’s new Fortnite game, Banana Defense, right now:?

Island code: 4708-1640-1360?

For more on how (and why) we made this game, read this blog post.?

Feel-good story: Check out this beautiful WIP metroidvania by solo Japanese dev (80 Level)?

A solo dev known as Drainage has been teasing their 2D metroidvania on X for about six months. Enjoy this beautiful clip (credit to 80 Level for drawing our attention to this—read their story for more clips):

Thanks for reading the Games Media Digest by Room 8 Group—we’re an external game developer providing end-to-end, strategic solutions for the world’s biggest developers and publishers. To see how we can help you with your next game project, get in touch.??

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