Amidst the “work hard, play hard” motto embraced worldwide, the game development industry today stands out as a beacon of resilience. The gaming industry is anticipated to achieve a remarkable Compound Annual Growth Rate (CAGR) of 8.74% from 2023 to 2027, culminating in a projected market size of US$467.00 billion by 2027. Let’s dig deeper into these numbers and explore six compelling reasons that make the future of the gaming industry so bright.
1 — Bringing Video Games to TV and Movies
Bringing video games to TV and movies isn’t a new idea, but it isn’t always profitable (unless you can help pay for the shows). Still, in the always-tough fight for customers’ attention, this is one way for developers and publishers to build their brands and keep people interested between releases. Things like the Mario and Sonic movies and the TV show The Last of Us have been known to have a big effect on software sales.
One notable example of the expansion of World of Warcraft into film is the 2016 release of “Warcraft” directed by Duncan Jones. Drawing inspiration from the immensely popular MMORPG that is famous for its raids, PvP activities, and WoW power leveling, “Warcraft” aimed to bring the rich lore and immersive world of Azeroth to the big screen, depicting the conflict between the Alliance and the Horde. Despite facing challenges in translating the complex narrative and vast universe of the game into a cohesive cinematic experience, the film attracted a dedicated fan base and contributed to the ongoing popularity of the World of Warcraft franchise. While it may not have achieved the same level of commercial success as some other video game adaptations, “Warcraft” demonstrated the potential for immersive storytelling to transcend mediums and engage audiences across different platforms.
2 — Epic’s Fortnite Strategy
At the end of last year, Epic Games took another step toward making Fortnite more like Roblox. The business put out three games made with the Unreal Editor for Fortnite tools: Rocket Race, LEGO Fortnite, and Fortnite Festival
In the past, companies have used Fortnite’s Creator mode to make branded experiences. However, Unreal Editor for Fortnite has a lot more to offer, and Epic wants other studios to join. When you think about how many people play Fortnite and how developers can reach people on all devices, the idea makes a lot of sense.
People will always compare it to Roblox, which has an even bigger fan base and a similar idea. But the Unreal tools and the players’ ages are what make them different. The majority of Roblox players are under 16, but the opposite is true for Fortnite, which could mean more ways to make money.
3 — Growing Markets and Worldwide Prospects
Outside of the primary Japanese, American, European, and even Chinese markets, there is an ever-increasing share of the gaming market. Because smartphones are getting better, even big AAA game makers can reach new gamers in new places. Southeast Asian territories are bringing in a lot of animals, and Newzoo says that sales are also going up strongly in Latin America (up 3.8% year-over-year) and the Middle East and Africa (up 4.7% year-over-year).
For some of these markets, like India, games made in that country are going to be the key to success. These places don’t always like Western entertainment the best, as we’ve seen with movies and TV shows. Companies like Ubisoft have also set up studios in new markets, and Xbox’s ID@Xbox program has been a big help to local teams playing games.
4 — Significant Smartphone Hardware and App Store Changes
After nearly a decade of steady expansion, the mobile gaming sector is facing headwinds, exacerbated (in part) by privacy regulations that make it more difficult for app developers to promote their games. However, various developments may contribute to the next stage of mobile game growth.
As previously said, the expanding capabilities of smartphones allow AAA developers to bring their titles to the platform (even if the form factor and control solutions are not always optimal). However, the fragmentation of the app stores presents the best chance for it. This would allow creators to sell their games (and microtransactions) directly rather than through Apple or Google’s shops. The huge mobile games from the main studios will profit the most from this change, but the addition of an Xbox app shop and Epic app store for Apple and Android devices will cause significant competition in the market.
5 — New AI Tools
One of the more significant issues facing the game development industry is that producing games requires more labor as time goes on, which drives up costs significantly. With development budgets in the AAA sector skyrocketing to unaffordable heights, this is a big problem to address. A part of this is a carryover from COVID when the move to remote work led to delays and higher expenses. This may perhaps sort itself out eventually. Hover, game dev companies are looking into ways to speed up this process.
Here’s where AI and improved development tools could come in handy. Driven by Unity and Unreal, we’re witnessing a fairly rapid advance in video game engines and tools, with a greater emphasis on producing visually stunning games more quickly and on a smaller budget. Accelerated development is another opportunity presented by AI, particularly generative AI.
There is another problem related to AI. Deeply held worries about artificial intelligence range from moral dilemmas about information collection to consumer perceptions of the technology and the impending need for legal regulation. There is promise here for game studios of all sizes, but those are important issues to resolve if they can.
6 — Generational Shifts in Video Gaming Industry
The gaming industry is still very new. Even now, there are many generations of people who did not play video games as children. The number of “digital natives” rises annually, which increases the potential audience for gaming. Additionally, it’s facilitating the social acceptability of video games. It is encouraging for the future to know that there is a sizable and highly engaged generation of gamers emerging, as evidenced by the enormous numbers shared by Roblox and Minecraft.
Ensuring that people are not quitting their activity is crucial for growing the audience. People’s leisure time decreases and their capacity to play 100-hour role-playing games or deep live service games is limited as they age and have families. These folks frequently ‘age out’ of playing video games (especially on consoles and PCs).
The video game business is getting better at serving older audiences. Traditional gaming consoles have evolved to be more adaptable; services like the Nintendo Switch, Steam Deck, and Xbox Cloud Gaming can all be used to meet a variety of lifestyles. Remasters, remakes, spiritual successors, and retro game services are likewise becoming more and more popular. Nothing is new, but it’s all helping to maintain the presence of more established competitors in the market.
Summing Up
Video game players experience the remarkable quality of games that have emerged in recent years. Whether it’s the 24 million who purchased Hogwarts Legacy, the 10 million who bought the latest Zelda installment in a single weekend, or the 19 million who immersed themselves in the indie game Palworld in less than two weeks, these figures underscore the immense interest in the gaming industry. If you were to ask these enthusiasts whether the video game industry is facing challenges, they would likely be taken aback. This enthusiastic engagement serves as a solid foundation for growth and provides good reason to remain optimistic about the future of video games.
