Game Marketing Tips, Analysis, and News

Monday, December 31, 2018

2019: What Lies Ahead in Games

2018 was a banner year for gaming, with the overall market size growing to somewhere north of $130 billion worldwide. Mobile games became the largest single segment of gaming, and China was the world's largest market for games -- with Tencent the world's largest game company. What's in store for 2019?

The market for games gets bigger.
Let's start with an easy one: the global market for games will continue to grow. Despite China holding back Tencent from introducing new games; I expect that will only be a temporary setback. (I also expect we'll never know the real story behind the Chinese government's throttling of Tencent in 2018. Too bad, it's no doubt fascinating.) The overall market will crack $140 billion, and may end up closer to $150 billion. Mobile games will retain their leadership as the biggest single segment.

Games will be increasingly scrutinized and regulated by governments around the world.
It's not just loot boxes, though those will continue to cause problems for game companies. The lines are getting blurred between gaming and gambling, and that brings oversight. Publishers will continue to push the boundaries because there's a lot of money at stake. Laws will be passed in Europe and Asia putting more restrictions on games. The USA will lag behind in this regard, mostly because other political issues will continue to dominate legislative time and attention. Major industry players will continue to deny there's a problem, though they may get closer to that point.

The Digital Store Wars get into high gear.
Prior to 2018, Valve's Steam store had some competition, but nothing particularly large or well-funded -- or very effective at competing with Steam. For 2019, there's plenty of competition: Discord, Epic, Robot Cache, and others. Moreover, some of that competition has billions of dollars to spend, or a user base larger than Steam's, or technological advantages. Epic is offering developers a much larger revenue share -- 88% of sales instead of 70%. Valve, after years of not paying attention and just raking in money, will have to wake up and start working if they want to maintain market share. The competition will be good for developers and consumers.

Mobile games will continue to grow strongly and innovate.
We've seen multiple billion-dollar mobile games this year, and new innovative game play on mobile (Fortnite and HQ Trivia are good examples). I expect there's plenty more innovation to come, in game design, business models, and marketing, for mobile games.

VR/AR/XR will continue to underperform.
Despite new hardware and software releases, a mass market for various alterations of reality does not yet exist. While games seem like an obvious choice for new hardware, we have yet to see really compelling game play (except at some location-based entertainment spots, like the Star Wars experience). The hardware is still clunky and expensive, and we have yet to see games that people want to play for tens of hours let alone the hundreds of hours top games are played on other popular platforms. Someday the market will appear... but it won't be in 2019.

Game streaming will continue to be a vision, not a viable market.
Despite attention from companies like Google, Microsoft, Sony, and Electronic Arts, game streaming will not become a major market. Why not? The technical issues are difficult and ongoing; hardware requirements are a problem (not the display, the controllers and the network and the back end); and the market of people who want to play console-style gaming with complicated controllers isn't really all that large, not compared to mobile games. Here's my main example of why streaming isn't needed: Fortnite on mobile. Epic rethought the interface, and it's good enough and fun enough -- and you don't need a new piece of hardware or a finicky connection or a subscription. If Epic can do it, so can others -- and they won't need some expensive and clunky arrangement with a big company to make it happen.

Indies will continue to have difficulty making a living until they put more emphasis on marketing.
The fundamental problem in the game industry is no longer making a game that works -- it's making a game that makes you money. Building games is easier than ever before, but building an audience for a game (and one that monetizes well!) is harder than ever. Most indies focus almost entirely on game design and execution, and only turn to thinking about marketing when their game has failed to become an instant mega-hit. Smart indies would think first about how they will build an audience for a new game, then start designing a game that works with that vision. Sadly, more indies will struggle without understanding this.

Games will continue to grow as a cultural force.
As the number of game players around the world continues to grow (over two billion by some estimates!) the influence of games on popular culture (TV, movies, books, social media, etc.) will continue to grow. For those of us in the industry, I hope we can work towards making games a force for good in the world, and fight against the negative effects. In particular, let's try to make trolls into an endangered species.

Happy New Year!

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