Yesterday, analyst firm MIDiA Research posted their updated 2023-2030 games industry report, showing less growth ahead compared to record years like 2020 and 2021. While the number of gamers will continue to rise up to 3.8 billion by 2030, growth rates will remain in the ‘modest single-digit’ range, staying below current inflation rates.
With the games industry also reeling from this year’s layoff spree (the latest developer to be hit being Bungie), we asked MIDiA Research Lead Games Analyst Karol Severin if there was any correlation between the two. We also inquired whether consumers should be worried about increasingly aggressive monetization in this new climate. You can find his answers below.
Do you think the recent layoff spree across the industry is due to the reduced annual growth rate that studios across the game industry are now facing?
The recent layoffs are a part of the correction, whereby companies are needing to become more profit-focused, as debt is much more expensive than it used to be. Naturally then, sadly, with slower revenue growth rates ahead, the path towards profitability will often require cost-cutting, of which layoffs are a part of.
Is there a risk of increased predatory monetization that consumers should be aware of as companies adjust to the new market conditions within the games industry?
With the rise of subscription services, I think consumers are likely to actually save money overall, as there will be less need to buy high-price point individual games. In terms of individual games monetizing in-game, this will be decided by market forces.
There can only really be as much monetization as the consumers allow by agreeing to spend. Furthermore, we expect the key growth to take place on the cosmetic side – the part of in-game spending that is largely voluntary and doesn’t impact the gameplay experience (does not give advantages over players who don’t spend).
Thank you for your time.