We'll let you in on a secret: this was supposed to be published on 11 January. But, as we all know, the largest acquisition in video games history was announced. Then it happened again.
Already this year, the games industry has again shown itself to be a tumultuous landscape. With the enormous influence of such domaneering forces as Take-Two and Microsoft making their push into mobile on the one hand, and the shifting tide of play-to-earn and NFTs in gaming on the other, it almost seems a fool's endeavour to predict the next steps of the mobile games industry.
But thankfully, PocketGamer.biz can ask expert industry voices in the mobile and games industry for their views on future of the mobile games industry instead.
Crypto, NFTs, Web3 infrastructure and protocols present exciting opportunities for virtually every industry. At the intersection between crypto and gaming we see early signs of a new business model of play-to-earn and on-chain virtual asset ownership. It’s still very early for these new business models however, investment into and the community around the space is growing exponentially.
Much as we saw in prior business models and platform evolutions, we expect crypto to increase audience, transparency and inclusion. The market can expect several contenders to fight to be the ‘back-bone’ of the play-to-earn ecosystem, making it highly fragmented to start, but likely to consolidate and standardise over time.
Non-fungible tokens (NFTs) will grow bigger in gaming, becoming a mainstream alternative to centralised and custodial ownership of virtual assets. This is already providing opportunities for players, creators and developers within gaming the ability to monetise and collaborate in new exciting and decentralised ways.
According to nonfungible.com, more than $2 billion was spent on NFTs during the first three months of 2021 alone, marking a 2,100 per cent increase from the fourth quarter of 2020. We expect to see this growth continue in 2022, with gaming acting as a first mover to build functional utility and technological advancement across the Web3 ecosystem.
Every year, my predictions on market trends tend to be wrong and I love that! It’s why gaming is such a fun industry to be a part of. The competition is ever changing and always adapting, meaning you have to stay sharp to keep your game relevant.
So instead my prediction will focus on games production and organisations. I predict that despite more COVID restrictions likely lifting in 2022, we’ll see a continued shift towards more flexible remote working models.
I can see that 2022 could be the year of ‘new employee benefits’ as companies look to further adapt their operating models in order to retain talent and attract new talent to their studios in an incredibly competitive marketplace.
This feels like a positive direction for the industry as people will now have more choice about how and where they work. If done correctly, it can unlock new talent pools across the world for those studios who have robust ways of hybrid working.
I’m personally very excited about 2022 and am looking forward to seeing how the way we make games continues to evolve. I’m also hopeful this evolution can lead to helping us continue to attract a more diverse pool of people to work in the games industry
2022 is likely to be a transformative year for gaming, following last year which was marked by transition. Improvements in cloud gaming, a mass rollout of 5G, and rapid developments of the metaverse will bring video games to a bigger audience than ever, punctuated by continued growth in emerging markets. Virtual reality headsets have become a mass market device, evidenced by Oculus' appearance at the top of the iOS App Store on Christmas Day.
While gaming so far has been the main application of VR, we will see everything from commerce to live entertainment make its way to VR and eventually the metaverse. From a markets standpoint, this year will also see the listing of esports and content organisation FaZe on the Nasdaq with about a $1 billion valuation, likely the first of many U.S. esports teams to go public in the coming years.
The most obvious and biggest trend for this year is naturally blockchain gaming. The number of projects and sizes of investments in this space are mind boggling, but it’s still super early for the whole model. Next year is very interesting to see much more of these games launching and playable. In a year, we’ll be much wiser regarding what the whole market looks like and where it starts to move, and what kind of different experiences developers are able to come up with to support the current massive hype.
The second big trend I see is the far spectrums of mobile game market coming closer together in the new mobile advertising landscape post-IDFA, and with Google likely following. This means, for example, more hypercasuals taking elements from casual/midcore for longer term retention and IAP monetisation mechanics ("hybrid casuals"), as well as the most hardcore games like 4X strategy games keep on incorporating elements from more approachable games (such as we’ve seen recently merge mechanics in Top War or match3 mechanics in Puzzles & Survival) in order to appeal to wider audiences (finding and targeting audiences for "whale driven" niche games is harder than ever with ATT).
Crystal balls are a risky business tool. But here are my hunches and gut feel for this year:
- M&A will continue from last year. There still is hunger and the race is going fiercely. If the general economic situation does not drastically change, this won’t stop.
- Subscription platforms continue to grow on mobile. Apple Arcade now has a very interesting competitor in Netflix, and I expect some big announcements on games and IP coming out this year.
- The competition for top talent will heat up, especially in smaller and mid-tier studios. Culture and benefits will become ever more important factors to set yourself apart as an employer.
- Remote work is here to stay, and a growing part of the work force will want to take advantage of it.
- My personal favorite among all the buzzword-worthy headlines in 2021 is play-to-earn. I am curious to see what happens in that space in 2022, as it has potential to add true value to the player’s experience.
Extra:
The metaverse will not happen in 2022, as it seems impossible to create a truly interconnected platform right now. Too many walled garden approaches in that area happening currently.
Brands are expected to spend around $1 billion in the metaverse in 2022, and $10 billion in 2024. Advertisers on average spend approximately $250 per American Facebook user. Can the metaverse reach one billion MAUs with $10 per user in three years? We think yes.
It's at least a $10bn advertising market in the making. Web3 and the formative metaverse will come further into focus in 2022, and we can expect mobile gaming industry talent to be at the forefront of this emergent space.
In 2022, developers and publishers will continue to explore new strategies to mitigate the impact of Apple’s IDFA changes, as well as prepare for Google’s upcoming changes to the Android AdID. Despite a lengthy process of industry adaptation ahead, there’s also a positive side, as industry players will be experimenting more with user acquisition. We’re also expecting the market to continue relying on high-quality video creatives production, as well as focus on ASO optimisation to maximise organic downloads.
NFT adoption in gaming will become more widespread, helping to reduce cynicism, thereby boosting the NFT market further, especially when more established mobile gaming companies start to more openly discuss the potential and the value behind the NFTs.
With mobile game companies' deals being at a record high in 2021 and recent news of Take-Two acquiring Zynga just 10 days into 2022, the mobile gaming market will continue to attract a lot of investment interest from established gaming powerhouses who are playing a catch up in mobile space, as well as from big non-gaming investors which possess the right DNA to expand into mobile entertainment.
