The gaming industry is seeing many innovations and trends as video game companies look for new ways to capture and keep customers. Competition is rising for established players, and some new products and services are starting to find their feet. Gaming is becoming increasingly mainstream, with more and more people of all ages picking up a controller, mobile device, or mouse and keyboard. The gaming industry is expected to grow by $90 billion between 2019 and 2023, and while much of it is held by a handful of big players, the indies are getting plenty of love too. So what can we look forward to in the next year?
New console hype
With both Microsoft and Sony planning to release new flagship consoles during the 2020 holiday season, there’s going to be a lot of excitement and announcements in the gaming industry during the coming year. For many generations now, the two companies have competed with each other in terms of console specs and capabilities, and with the new game systems slated for release so closely together, this round will be no exception. Nintendo, in contrast, has announced that it won’t be releasing any new systems this year (special editions excepted), but then the Japanese company has always been content to do its own thing, competing on the strength of its innovation and first-party titles. For now, two new consoles are plenty to be excited about.
E3 is shifting its focus
The Electronic Entertainment Expo, otherwise known as E3, has long been one of the biggest trade events in the video game industry, where companies would make big announcements about upcoming hardware and games. It has traditionally been an industry-only event, open to games companies and the press, but in 2017 it opened up to the public as well.
One might think, given there are two new consoles in the works, that this would be a big year for E3. However, that isn’t necessarily the case. The expo has been struggling to stay relevant in recent years, with an increasing number of companies deciding to break off and hold their own events separately, either in nearby venues or online. These organizations are finding it more worthwhile to choose their own venues for their announcements rather than pay E3 for the privilege, or hold events before the expo in order to stand apart from the volume of news that comes out during the event. While Nintendo maintains a presence there, its primary press event comes in the form of a stream rather than a big in-person production. Sony opted out of E3 last year, and that’s not likely to change in 2020.
E3 is working to rebrand itself as a public event in order to adapt to these changes. In 2017, it opened to the public in order to sell more tickets, which was effective in boosting its attendance. But with gaming industry leaders continuing to reduce their presence at the event, that won’t be enough. This year, E3 is planning to change things up and shift its focus to fans, influencers, and media. It will be interesting to see what this shift looks like in practice, and just how successful it will be.
Some big monopolies are breaking up
Steam may not have a complete monopoly on the market as far as game stores and launchers go, but for a long time it’s been the most popular and well-known online game store in the gaming industry. The Epic Games Store is now giving Steam a run for its money, however. Despite vehement protests from gamers at the idea of having to sign up for and download a separate platform with store-exclusive games, the Epic Games Store had a very successful 2019. Launched in December 2018, the platform lured in publishers and developers by offering better revenue sharing and paying for exclusive games, and it attracted customers – despite protests – with those exclusives along with weekly free games. In its first full year, the store earned $680 million in revenue. Steam is still the undisputed leader of the market, but that may not last. Look for more freebies, exclusives, and market share from Epic in the coming year.
Another giant of the gaming industry, the streaming service Twitch, is also facing increasing competition. Mixer has been offering deals to some extremely high-profile Twitch streamers in order to bring them and their audiences to its platform. Ninja and Shroud, two of the most popular streamers on Twitch, became exclusive Mixer streamers last year. While this move reduced both streamers’ audiences substantially (Ninja went from 14 million followers to 2.3 million, for example), the move has still helped attract both streamers and viewers to the platform, as well as bring it more publicity and awareness. While Mixer is still far behind Twitch in terms of popularity, it has an opportunity to grow and give Twitch a run for its money.
Video game companies and consumers alike are continuing to move away from physical game disks and cartridges, preferring the convenience of digital downloads. Sony, Microsoft, and Nintendo all offer free digital games to people subscribed to their online services, and companies are developing new platforms and services through which to buy and play games.
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Google recently launched Stadia, a cloud gaming service that allows users to purchase games and stream them through the cloud – no download is needed, and because the game isn’t being run on the user’s hardware, they don’t need the latest technology with the best specs in order to be able to play big games. While this is a boon for many players, it still has drawbacks. Users with slower internet speeds, limited data, or too much distance from Google’s servers won’t be able to get good performance out of Stadia. The service was also missing some features at launch, and users aren’t thrilled with the pricing model or the limited number of games currently available. Expect to see Google continuing to develop and improve Stadia over the coming year.
Apple launched its own gaming service last year: Apple Arcade. The new subscription service offers a curated selection of games with no ads or in-app purchases, which is a welcome change for people who are tired of traditional app monetization models. The user downloads these apps to their phone, unlike Stadia, but will lose access to them if they cancel their subscription. Apple will continue to add new games to Apple Arcade over time, so subscribers shouldn’t run out of things to play. Users have so far been impressed with the quality and variety of games available on the platform, and if Apple keeps this up, Apple Arcade could see a lot of growth in 2020.
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The rise of the indies
Games made by small, independent studios have been growing in popularity and accessibility over the past few years, with the major consoles bringing an increasing number of them to the attention of a wider audience. This is great for consumers, as it offers them a wider variety of creative games that tend to operate further outside the box than the bigger publishers are willing to do, and often for more affordable prices. It may be a mixed blessing for indies themselves, however: while greater access to console audiences is a good thing, it also means they have a lot more competition. Indie studios will have to work harder to make their games stand out among the wealth of good titles that are coming to the gaming market.
Highlights from Technavio’s gaming industry research report
- CAGR of the market during the forecast period 2019-2023
- Detailed information on factors that will accelerate the growth of the gaming market during the next five years
- Precise estimation of the global gaming market size and its contribution to the parent market
- In-depth gaming market forecast on upcoming trends and changes in consumer behavior
- The growth of the gaming market across APAC, Europe, MEA, North America, and South America
- A thorough analysis of the market’s competitive landscape and detailed information on several vendors
- Comprehensive details of factors that will challenge the growth of games companies