Newzoo: Big Publishers Will Pivot Franchises to Service-Based Model in 2023

Newzoo has presented the top 10 trends of this year.

Newzoo has published the top 10 trends that we should expect from the gaming industry in 2023. The predictions suggest big publishers will be pivoting to a service-based strategy, PC and console markets will stick to hybrid monetization, cloud gaming service providers will invest in PaaS, and generative AI will make developing games easier.

More AAA and AA Publishers Will Pivot Their Main Franchises to a Service-Based Model

The trend of creating sequels, remakes, and remasters is strong now because it's safe for companies to produce games in an already popular franchise. Newzoo believes that this year non-indie publishers will be pivoting to a live service strategy and adding content to existing titles instead of creating sequels or remakes. 

The Microsoft-Activision Deal Is Getting More Likely, but Regulators Will Continue to Impact How Gaming Companies Operate

Microsoft has been under a lot of pressure from regulators and other companies since it announced its decision to buy Activision. Newzoo thinks FTC will not block the deal, but Microsoft will have to make concessions before it can go through.

Seems like 2023 will see regulators paying closer attention to common practices, especially concerning loot boxes, Apple controlling App Store, and content exclusivity.

China will start easing its regulations in 2023, giving game companies more opportunities to break into this market. Reportedly, the NPPA will gradually streamline the licensing process.  

The PC and Console Markets Will Embrace Hybrid Monetization Strategies (Including Advertising)

According to Newzoo, PC and console gaming markets will "ramp up" their hybrid monetization strategies, offering additional marketing platforms to third-party companies and cheaper subscriptions to those who don’t mind seeing ads. At the same time, subscription tiers without ads might see a price bump.

The appetite for mergers and acquisitions (M&A) will continue to slow down in 2023

After 2020, a year spent at home, which brought a boost in gaming revenues, development and playing times have been slowing down, and 2023 will not be an exception, causing fewer companies wanting to acquire other studios.

"Capital will get more and more expensive, while opportunity costs will go up, hindering any major (or even minor) acquisitions. On top of this, the current regulatory climate will keep disincentivizing acquisitions with high enough profiles for regulators to perk up their ears and take action."

The global semiconductor supply chain will bounce back, boosting console availability

It has been a hard time for those who wanted a new console or better hardware. But according to the report, it will soon be easier to get both as major supply chain issues will be resolved. With more components on the market, prices will dip and discounts will expand.

In the post-ATT era, user acquisition for mobile games will become harder for (hyper) casual games

Casual and hypercasual games must either change or fail due to new monetization, just adding in-app purchases or a subscription model won’t suffice, Newzoo believes. Such games can't engage players for long periods of time, so they have to come up with another strategy.

Cloud gaming service providers will invest more in Platforms as a Service (PaaS)

The B2B cloud gaming market segment is promising a solid performance in 2023. Cloud gaming providers will invest more in PaaS, the report says, empowering more platforms and publishers to offer the cloud as an alternative distribution method. 

Generative AI Will Make It Easier to Develop Games (but We’re Years Away from Full Automation for AAA Design)

Another controversial topic of last year was generative AI. Newzoo thinks we will see more advanced tools helping developers save time and populate vast online worlds.

VR Gaming Will Continue to Grow, But Will Remain Relatively Niche

VR is getting more accessible, with headsets coming out every year. Boosting investment into VR content will attract more players, leading to more entries from companies and paving the way for further adoption of VR gaming.

However, VR gaming will remain a niche segment, players will prioritize traditional gaming platforms instead of paying an additional premium.

Gaming in Cars May Be Closer Than We Think

This segment is getting more popular, with companies offering new solutions. The report sees the reason for the development in the fact that automotive entertainment systems are improving fast and that electric vehicles need to be charged, which gives owners enough time to play.

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