New technology isn’t just making games faster and more visually appealing, it’s changing the nature of games. Younger gamers spend more time and money on games than older players do, and that has implications for the industry. Just as we’ve seen with video streaming companies over the past few years, where outsized investment generated a wave of content, this is the moment for game companies to bet big and move to the next level. How should game developers and publishers prepare to make the most of this opportunity? Since 2019, over $240 billion in investment has poured into the industry from venture capital, private equity, merger-and-acquisition (M&A) plays by technology and media giants, and robust investment by traditional gaming companies. However, large, virtual world games, played by fewer but more engaged gamers over multiple platforms, are likely to contribute more to the industry’s profits, given the monetization opportunities through microtransactions within games, and through other media experiences, virtual events, and commerce. The ubiquity of mobile phones means that even free-to-play casual games will draw huge numbers and add significant revenue to the markets.
There’s room for success across the spectrum, from high-resolution immersive games (such as Red Dead Redemption 2 and Horizon Forbidden West) to low-cost, indie, and pixel-art games (like Stardew Valley and Among Us).
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