Matthew BallCEO of Epyllion and author The Metaverse book, fell 220 slides in an early access deck this week that explained the ups and downs of today's game industry.
The slides are very easy to read and I encourage everyone to view them, as it takes much less time to go through and grasp them than it would a long essay. let down on the subject. Ball made a preview of his comments at our GamesBeat Insider Series: Hollywood and Games event on December 12 in Los Angeles. I'm already excited to discuss this new sliding deck and the issues it will raise at our upcoming event GamesBeat 2025 Collection on May 19-20 in Los Angeles.
Just a few years ago, gaming hit its peak in 2021 as the pandemic forced everyone indoors and gamers found solace in online gaming. The drivers included mobile growth, live services, free-to-play, cross-platform, battle royales and battle passes, user-generated content, social play and social game services and the rise of COVID itself.
Matthew Ball captured this confluence of events that allowed gaming to grow faster than other markets. But it stalled in the past 2.5 years, resulting in an unprecedented 34,000 layoffs and a lack of investment capital to fuel the wave of game studios that started before.
In one sentence, Ball summed up what's going on. He wrote, “The frustration of a decade-plus of growth drivers that players, playing time, and spending grew… coincided with changing consumers, behavior, changing monetization models, and the effects of “locking a -in” that kept growing… … while there was a fixed growth in foreign markets that shifted to local productions (and then taking share abroad)… and that happened together with real macro-economic financial events and diseases spread… as well as the emergence of new and hyper-viral agents… and established competition from abroad…
The promised drivers for cloud gaming, betting, subscriptions, esports, XR, Web3, metaverse and app store management did not deliver the much-needed growth, resulting in winter instead. Players have focused on older live service games, growing steadily in new titles.
Apple's move to focus on user privacy over targeted ads slowed the growth of mobile gaming, which had fueled the decade-long boom in gaming.
The base installed console did not grow. Download the foreign development. Social video like TikTok became more prominent and interesting for youth. Players disappeared into black hole games. Game sampling became a practice in the past. Product timelines grew as did development costs. App Stores had restrictive, closed policies. The price increase was rejected by players. Fear of failure led to more conservative bets. The cost of customer acquisition rose. Finding games just got worse.
Without new engines of growth, games got stuck in a vicious cycle. Income is stopped. Profits fell, with more failures like Concord and Suicide Squad: Kill the Justice League. Large companies took fewer risks and restricted investment. That leads to fewer big games and big studios, fewer hits and innovations, and no player growth or playtime growth. That wheel still spins.
But we are not without hope, said Ball. The Switch 2 offers some room for improvement. It will face competition from other new handsets and devices such as Valve, Sony and Microsoft. Double-A and triple-A gaming is succeeding on mobile in the form of Genshin Impact. Non-core markets are growing like the Middle East. User-generated content platforms and tools are featured on Roblox, Minecraft, Fortnite and Overwolf. Social game services are on the rise. App store management is starting to happen to maybe get rid of 30% fees. New game genres are emerging, with titles like Helldivers 2 and Palworld emerging. AI has the potential to improve game development, cut costs and discover new types of gameplay. Promotions are growing, and Grand Theft Auto VI is coming this year, possibly with higher prices.
The result, as always, is winners and losers.
At the same time, I would like to express my shock and horror when I saw the toll of the fires in Los Angeles. Please think about these resources here and donations to some of these organizations: 211 LA, California Community Foundation Fund, Direct Relief, Greater Los Angeles Education Foundation, Habitat For Humanity Greater Los Angeles, Los Angeles Fire Department Foundation, Los Angeles Regional Food Bank, Los Angeles Unified School District Education Foundation Emergency Relief Fund, Eaton Fire Response Fund at MusiCares Education Foundation and Pasadena.
In addition, it is interesting to hear the hopes of the crypto people as the new Trump administration will take power on Monday, obviously with high-level crypto advisors. I'm afraid that such a benefit for Web3 will come at many greater costs, such as tariffs on gaming devices.
I wish us all the best, and I can only think of William Butler Yeats.
“And what rough beast, cometh at last his time,
Going to Bethlehem to be born?”
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