Serious Business of Games - June 2024

With all the changes and developments in the gaming industry, it can be hard to keep track of the overall direction the industry is moving in. No one has a crystal ball, certainly not in a volatile environment, impacted by geopolitical, macro-economic and industry-specific changes that truly affect the way game developers work today.

In this (series of) article (s), I will weed through the industry news of the last weeks and share the overarching trends that I identify across the market.

In this edition, I'll cover three recurring themes that have appeared frequently in the announcements of the past few weeks.

Big bets are still made on mobile

In recent years, the share of mobile gaming in the overall revenue chart surpassed 50% and was on the rise. While the multi-year revenue trend has been increasing, the share of mobile revenue has declined over the past two years.

In the past, studios developed and released games for specific platforms. Today, however, they adopt a multi-platform approach. For instance, AAA studios like Ubisoft, Capcom, and others release flagship titles simultaneously on multiple platforms, including PC, console, and mobile.

Although the growth rate is slowing on mobile, the fact that billions of people carry a game platform in their pocket still presents a significant opportunity for game and app developers.

The investment in and focus on mobile gaming is evident in the news shared recently of Game Mode on iOS, for example. With iOS 18, Apple is adding this feature, which optimizes the game experience by giving the game the highest priority access to the iPhone’s processor. This feature is designed to ensure that titles like Assassin’s Creed Mirage, Resident Evil 7, and other AAA-titles run as smoothly on mobile as they do on other platforms.

Another indication that mobile is integral to every gaming company's growth plans is the announcement of a mobile version of The Sandbox set for release in 2025.

Additionally, the announcement that the Epic Games Store will return to mobile at the end of 2024 or early 2025 highlights the continued importance of iOS and Android in the gaming ecosystem.

The most significant news in this respect is the announcement of the Xbox mobile game store, which is to be launched next month. Xbox president Sarah Bond shared that mobile was one of the key drivers for Microsoft’s $69 Billion acquisition of Activision and that the release of the Xbox mobile games store is part of Xbox’ strategy of ‘creating a true cross-platform, game-centric, mobile experience’.

Growing power of IP

Have you noticed that the highest-grossing movies in recent years are all sequels? Examples include Avatar: The Way of Water, Spider-Man: No Way Home, and Jurassic World: Dominion. These films are part of franchises—brands that are repackaged and resold. The characters within these movies are referred to as intellectual property (IP).

The same trend is happening in Games.

Over 60% of playtime spent on new titles across platforms went to franchises that release new games on a yearly basis:

Breaking through the noise created by these big brands is out of reach for most developers. With a few exceptions, new game releases are typically reserved for those with established IP, such as Scopely’s Monopoly Go! that grew to a billion dollar game within a year.

A testament to this are the recent releases from major studios. Supercell, for instance, launched only their sixth title in 14 years this month. Squad Busters debuted after over 40 million pre-registrations, featuring iconic characters from hugely popular games like Clash of Clans and Brawl Stars.

Another hugely anticipated new release is Star Wars Hunters, developed by Zynga. Familiar with the complexities of marketing a mobile game post-IDFA, it took Zynga 6 years to get metrics to a level that allowed for User Acquisition at scale.

And that is with a game that includes some of the most recognizable characters in modern entertainment. It just shows how difficult it is nowadays to launch a new game from scratch.

Application of AI in Games

The buzz surrounding AI is immense, and in this case, the hype seems poised to genuinely impact our lives very soon—if not already.

The development of AI is progressing immensely fast. In games, for the moment, AI is mostly utilized in the background, without directly interacting with players. An example is level-testing, which is done with AI, but supervised by humans. It is only a matter of time that the supervision is run by AI as well.

According to Luka Crnkovic-Friis, head of King’s AI and ML department, who spoke to Pocketgamer about the implications of AI, it is primarily utilized in the ideation phase to generate ideas for artists. It is not yet used to create the actual art for the games.

A lack of clarity in the areas of copyright and legality hamper industry-wide adoption. For now.

Lastly, we review Apple's announcements from the June WWDC event. Apple went in big on AI, unveiling AI-powered features integrated into most of their native apps. They refer to this initiative as Apple Intelligence.

The unique value proposition of Apple Intelligence is that all the computing happens on-device, which means no data is sent and derived from the cloud. This greatly enhances user’s privacy.

If Apple Intelligence doesn't fully address your question or complete your task to your satisfaction, you can always turn to ChatGPT. In an unprecedented move, Apple has partnered with competitor Microsoft to provide users with a built-in layer of intelligence in iOS, through ChatGPT.

About the Author

Currently serving as the Director of Growth and Business Development at 5CA , the Player Experience outsourcing company, Elliot collaborates with studio management, product teams and player experience teams, drawing on 15+ years' experience in the gaming industry. His previous roles include Head of Business Development and Partnerships at 华为 and Director of Strategic Partnerships at Plarium , the studio behind worldwide hit game ‘RAID: Shadow Legends’, where he managed key strategic relationships with major industry stakeholders such as Apple, Google, and Microsoft.