The Era of Gaming (EOG) Series - Part 2

Part 2: Decoding the Trends Powering the Gaming Industry

Welcome Back to The EOG Series, where we take a wild ride into decoding the exciting world of Gaming and explore its ever-evolving landscape. It is a humble attempt on my part to share with you insights built from years of being fascinated with its working, and the experiences I imbibed being professionally involved.?

The gaming industry is a dynamic and ever-evolving landscape, with several trends shaping its future. Part 1 of The EOG Series set the stage for the juggernaut that is the Gaming industry, while also giving insights into the segments that make up the industry, and its major driving forces. In Part 2 of this series, we’re going to take a look at the trends that are shaping the future of gaming and delve in depth on one such roaring trend that has truly captured the imagination of the audiences, driving millions of new gamers into its fold.?

First up, we have?mobile gaming, the Godzilla of the gaming industry. With over 1.2 billion smartphones sold in 2022, it’s no surprise that mobile gaming is the largest and fastest-growing gaming segment. In fact, the largest untapped market is consumers who have game consoles in their pockets but haven't realized it yet. That’s right, if you have a smartphone, you’re already a gamer!

Next, we have?free-to-play games, or as we like to call them, the “buy-one-get-one-free” of the gaming world. These games are free to download and play, but they make their money through in-game purchases such as virtual currency, items, and downloadable content. It’s a win-win situation for both the player and the game developer.

Esports, or competitive video gaming, is also on the rise. The global esports market is projected to reach $1.79 billion by 2023, and it’s all thanks to streaming platforms such as Twitch and YouTube. It’s no secret that watching other people play video games is now a legitimate form of entertainment.

Streaming?has become a major part of the gaming industry, with gamers streaming their gameplay on platforms such as Twitch, YouTube, and Facebook. This has also led to the rise of content creators and influencers in the gaming industry. It’s now possible to make a living just by playing video games on camera. Who says playing video games won’t get you anywhere in life?

Virtual reality?and augmented reality technology are also making their way into the gaming industry. The use of VR and AR technology in gaming is expected to grow rapidly in the coming years. Who needs real life when you have virtual reality, right?

Cloud gaming?services are also on the rise. This allows players to play high-end games on a variety of devices without the need for expensive hardware. It’s the ultimate equalizer for gamers who can’t afford the latest and greatest hardware.

Finally,?game accessibility?is becoming more important. Game developers are making games accessible to players with disabilities by implementing features such as color-blind mode, voice recognition, and text-to-speech. Because everyone should have the opportunity to enjoy the magic of gaming.

The trends driving the gaming industry are all about innovation and improving the gaming experience.?

Mobile Gaming: The Behemoth Driving the Gaming Market

Mobile Gaming continues to be the largest segment of the gaming market, accounting for over 50% of the global market share. An estimated 98 billion dollars was spent on mobile games alone in 2022! To make a quick comparison, the best-selling console of all time, Sony's PlayStation 2, sold just over 150 million units in its lifetime. 2022’s market leader, the Nintendo Switch, has an install base of about 122 million. That pales in comparison to the roughly?1.2 billion smartphones sold in 2022. There have been some great technological advancements on smartphones, enabling more console-like experiences on mobile.?

Tencent, which is the largest Gaming Company in the world and generates more than 30% of its total revenue through gaming, made ~ $32 billion in gaming revenue in 2022 out of which around $24 billion was just from mobile gaming! Additionally, the top 5 mobile games worldwide made $ 7.2 billion in 2022. Let that sink in, just 5 mobile games raked in that much cash. Out of that, Honor of Kings and PUBG Mobile generated almost 4 billion dollars, both Tencent products.?

Roblox, the online game creation platform brought around 862 million in 2022.?

Traditional Video Games Publishers like EA Sports and Take Two Interactive are also looking to take advantage of the Mobile Gaming trend by making large acquisitions, having been laggards in this space.?

EA Sports bought GLU Mobile early 2021 for $2.4 billion to add to it mobile business and build on its network of 100 million MAPs (Monthly Active Players) in mobile. In no time, it followed it up with another acquisition snapping up Warner Bros’s gaming studio Playdemic for $1.4 billion in June 2021, further strengthening its mobile gaming portfolio and signaling its strong intent to cement its positioning in the mobile gaming market. Take Two Interactive bought Zynga to get into Mobile Gaming!

Social media giants, such as Meta and TikTok, also want in on this trend to deepen user engagement on their platforms. In 2022, Meta?invested?$40 million in Tokyo-based mobile gaming company?Playco, which is aiming to build a game over 1 billion people can play. Rival social media giant?TikTok?has begun?pilot-testing?mobile games for its app as a way to create an additional revenue stream through advertising. It has partnered with game developers?like Voodoo,?NitroGames, and others to develop a series of “mini-games” and even allows user to record their game play and post it as a TikTok!?

An Interesting Trend within a Trend: Enter Hyper-Casual Gamers

With the rise of smartphones and tablets, mobile gaming has never been more accessible, and game developers are capitalizing on this trend by creating games that cater to the needs of casual gamers. Free-to-play, Play-to-Earn, Play-and-Earn models adopted by mobile game developers has ushered in an unprecedented number of new gamers, called as hyper-casual gamers into the gaming ecosystem, flooding the market with mobile games all vying for the casual gamers’ attention.?

Introducing hyper-casual games, the new darlings of the mobile gaming industry!

Gone are the days when you had to spend hours playing complex games with intricate controls. With hyper-casual games, you can enjoy instant immersive gameplay, fun mechanics, and shorter gaming sessions that last anywhere from 30 seconds to 2 minutes, with infinite replays. No wonder they have become the go-to choice for gamers looking for a quick gaming fix!

Just how popular are these games, you ask? Well, in 2022, there were a whopping 90 billion mobile game downloads across the App Store and Google Play. And guess what? Nearly 25% of those were hyper-casual games, beating out the ever-popular Action Category by more than double! But what's even more impressive is that almost all of the revenue generated by hyper-casual games is through in-app ads neatly integrated with the game sessions. These are called Interstitial Ads, and they are proving to be a lucrative business model for game developers.

The trend is not slowing down anytime soon, either. Recent research has revealed that among the top 1,000 downloaded games in 2022, there were 178 new hyper-casual games launched that year. And the hyper-casual simulation games saw a surge in popularity, with 76 new titles quickly gaining traction. For example, Stone Grass: Lawn Mower Game, released in February 2022, became the second most downloaded hyper-casual simulation game.

And it's not just game developers who are taking notice of this trend. Even streaming giant Netflix is getting in on the action by accelerating its push into casual gaming to retain subscribers. The company acquired Finnish developer Next Games and Texas-based studio Boss Fight Entertainment in March 2022 following the acquisition of Night School Studio in September 2021.?With over 40 titles already in its library, the company is looking to tap into the hyper-casual gamer as a retention strategy.

But it's not just game developers and streaming services that are benefiting from the mobile gaming wave. Tech giant Apple, which doesn't make games of its own, has become one of the top 5 gaming companies in the world, with an annual gaming revenue of over $15 billion in 2021. What's more, it made $2 billion more in profits from games than Microsoft, Nintendo, Sony, and Activision Blizzard combined in 2019. How? By collecting a 30% fee from all app spending, including in-app purchases, subscriptions, and premium app fees. Talk about a lucrative business model!

The future of mobile gaming looks incredibly promising. The industry's continued growth and the demand for simple, addictive, and accessible games are undeniable. With hyper-casual simulation games leading the way and word games experiencing significant growth, game developers have a wealth of data to use in crafting the next big hit. The potential for success is immense for those who can tap into this growing market. Get ready to ride the mobile gaming wave!

Extra

In the upcoming Parts of The EOG Series, we will explore The World of Casinos and how they are evolving and creating new lines of businesses, The Storm in the Waiting, and many more exciting facets of this beauty that is Gaming!

Feel free to leave me a comment on anything gaming!