Gaming Predictions 2021
Deplatformization, IP, M&A, Subscription Passes, and much much more
|The Pause Button Staff||Jan 22||2|
This roundup was written by The Pause Button — a weekly gaming newsletter that curates weekly news and content about video games.
We’ve absolutely loved reading predictions about the games industry these past few weeks, so we decided to compile a bunch of our favorites here. And also included some of our own ✨. Let us know what you think!
Focus: Generalist — Link
Developers + Creator Synergy: Developers will become a bigger part of the creator ecosystem. Two scenarios:
Developers will contract with creators to create specific mods/maps for creators to leverage in their streams. E.g MrBeast Gaming does this particularly well for Minecraft videos.
Developers will lean much heavier on groups like OfflineTV and Dream SMP as a key marketing pillar in their roll-out plans for new games and content. These groups are already revitalizing titles like Rust and giving boons to Minecraft and Among Us.
Games within Superapps: In NAMER/EMEA/LATAM, Super apps will edge out the traditional hypercasual game. Companies like Snap, Twitch, Facebook, Google, Bytedance will follow successfully in Tencent’s footsteps to create a mini-app ecosystem specifically geared toward games. Partnerships with small studios and large studios will increasingly become an important content strategy for these businesses outside of M&A.
Deplatformization: Triggered by IDFA, Epic vs. Apple, Crypto’s surge, and AWS/Azure (all not necessarily a result but a catalyst), we’ll see games deplatfomize to avoid bureaucracy and fees. The browser-based charge is led by Playco and End.gg, but Facebook Gaming, Stadia, Microsoft and Amazon are all considering browser-based cloud gaming options to circumvent mobile platform restrictions & fees. Deplatformization might also mean creators finding ways to deplatformize from publishers (In 2020, Nintendo infamously closed down all Animal Crossing third party seller tools and shut down grassroots Melee tournaments).
In China, These companies [Lilith Games, MiHoYo, Giant Network] were able to launch games successfully via their own website or free app distribution platforms such as TapTap, allowing their gross profit margin to increase from 50% to over 90%. — Daniel Ahmad
IP= Manga + Anime: 2020 saw Manga serialization subscriptions balloon in the US. There’s a wealth of content from Japan, China and Korea that can be used to create games. Perhaps anime and manga are more accessible forms of IP, too. Lots of historical success here with games like Dragon Ball Z Dokkan Battle, but also the potential for new ones in titles like Tower of God.
Movie Games Return: In the mid-2000s, the biggest blockbusters were often accompanied by poorly developed titles for the era’s biggest consoles. With the value of IP and the focus on multi-platform supremacy, expect to see more popular franchises — like Harry Potter, Lord of the Rings, Indiana Jones, and more —turn back to games as a way to grow their audiences and drive revenue.
India, India, India: This almost feels like a gimme, but in India Youtube viewership is up significantly; Western game studios are starting to build satellite offices for their development; Companies are getting more funding; There are geopolitical tensions with China. 2021 will see a massive explosion of dev talent in India, a grassroots Indie scene flourish, and international funding grow more available.
LATAM & Spain Grow Market Share: Viewership for streaming platforms will see the largest growth from Spanish speaking countries. Particularly on Facebook Gaming, Spanish speaking streamers consistently outperform their peers. These streamers will see greater popularity on Twitch and Youtube (and perhaps the same for Brazil). Also expect to see more women join in and for these streamers to have a profound influence on the games being played in their respective regions.
Focus: Gaming Industry Analysis & Trends — Link
Subscription Passes: Gaming subscriptions like Xbox Game Pass & Apple Arcade will continue to proliferate, becoming aggregators of games. It’s unclear whether this will be a net benefit for publishers, but consumers will undoubtedly have more access to games. Ultimately, this subscription revenue might eat market share away from existing battle pass options.
IDFA: Deprecation of IDFA and in-game ad targeting won’t actually be a bad thing; in fact, it’ll benefit consumer privacy, force studios to get more creative with traditional marketing and build a more sustainable user base (e.g hybridcasuals vs hypercasuals).
Cross-Geo Collaboration Increases: There will be more cross-border collaboration with China. The difficulty of regulations and ISBNs have shifted some of China’s smaller studios’ focus to global markets and higher quality productions to engage new audiences.
Digital Assets: NFTs and player-owned economies will make key strides in their long-term growth. Games like Blankos Block Party, Ember Sword and Skyweaver are inevitabilities vs. possibilities. Collectibles are booming. A corollary to this is that influencers and developers will leverage social tokens to facilitate in-game economies.
Focus: Game Development, Mobile Gaming — Link
Buy, Buy, Buy: M&A increases pace in 2021. There will be more consolidation of power in larger players as a result of subscriptions (IP control), IDFA deprecation, and optics (performance on public markets/gearing to go public). As a result, big studios will have a lot more leverage, but it also leaves space for indie studios to operate outside of AAA’s purview.
Cross-Platform Genre Expansion: Following Genshin Impact’s success, RPGs will look cross-platform to grow revenue.
The Missing Piece: Puzzle games will become the top grossing genre on mobile and the hybrid casual genre will take market share away from hypercasual titles.
Focus: Gaming Industry Analysis; Asia Pacific Region — Link
Globalization of Games: Cross-border collaborations won’t be limited to exports from China. The West will see greater penetration into China through Steam (digital distribution for PC) and consoles (Sony/Microsoft). As China regulations become more clear for both domestic and international developers (and services expand around this), a greater number of games will be imported into China.
Platform Diversity: While mobile is certainly the dominant mode of play in China, there will be greater platform diversity. Cross-play games will become more commonplace as developers shift to serve domestic and global markets simultaneously.
New Challengers: Emergent players like miHoYo, Lilith Games and Bytedance, will challenge the dominance of incumbents like Tencent, Alibaba and NetEase through hit games and key acquisitions.
Regions Unlocked: Singapore will solidify its standing as a regional gaming hub and Japan will get past important regulatory hurdles to nurture its esports scene, classifying it as a profession vs. gambling.
Focus: New Age Journalism; Gamer Culture — Link
Games Journalism: There will be much greater pressure on games media to more thoroughly (and skeptically) interrogate pre-release content from developers. The hype train will still survive, but media outlets are likely to push back harder on devs that are promising the world without offering transparent access. This is particularly pertinent in light of the Cyberpunk 2077 debacle and crunch.
"Ethically-made games”: The working conditions under which a game is made will increasingly factor into previews/reviews and general coverage. Developers who lead the way on work-life balance and fair working conditions will make that a selling point for their products, and consumers are increasingly likely to pay attention to these signals.
Inclusivity in Games: Games will have a big reckoning with inclusivity and belonging — from hiring to funding to representation. Historically, the games industry is known to be retrograde in the audiences they cater to, and this was largely driven by monoculture teams. Conversations around diversity started happening in earnest in 2020, but will happen more radically in 2021. The discussions will also extend into content moderation, socialization (how people treat each other), and privacy in games.
High Fidelity Gaming: 5G means better accessibility and distribution for playing games: mobile gaming, cloud gaming, etc.
IP Supremacy: IP-licensed games expand their reach. This takes many forms:
Games will be ported to a variety of platforms
Platforms will dig up older IP and refresh them for new platforms (e.g. Switch + NES subscription service)
IP continues to penetrate popular F2P games to increase brand awareness
IP is taken from existing non-gaming sources and turned into video games
A Fight for Fees: As a result of the Epic Vs. Apple and Huawei & Tencent feuds, we’ll see more discussion (battles?) over platform fees. What does it mean to charge 30% or 70% or have a revenue share?
A New Focus after IDFA: IDFA deprecation will lead to a greater emphasis on first time user onboarding to improve retention and monetization metrics. It will also more closely align cross-functional departments at a studio i.e data + art.
Focus: Gaming Industry Analysis; Esports & Creators — Link
Valorant: Valorant will be a top five esport based on average viewership. It’s inviting and easy to understand. More competitive games will focus on simplicity and viewability to accommodate new audiences.
Esports Orgs: At least one esports organization will surpass a $700M valuation.
Peak Concurrent Viewership: The Grefg’s record (2.4 million) for peak concurrent viewers will be broken more than once.
Audience Participation: Rival Peak, a massive interactive live event [MILE] just hit 22 million view at 600k unique visitors. Genvid is changing the game on how games are made, consumed, and interacted with. More broadly, Twitch plugins and Discord bots are redefining what it means to “view” and “chat” with creators. I’m bullish that 2021 will see a variety of new watching and participatory experiences emerge.
Notable 2020 Trends That Persist:
Game Engine Multifaceted Applicability
IP Partnerships/Virtual Live Events
Social & Party Game Genre
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