Next Generation Gaming Trends
At the beginning of 2023, we interviewed 30 gaming founders, VCs and corporates about recent gaming trends and predictions. We extracted some of the most relevant generational, technological and geographical themes.
Generational Impact
COVID-19 uniquely impacted the younger generation and deprived social activity from school related activities, where it is normally one of the most social times in one’s life and early adulthood. So for much of the younger audience, gaming became one of the primary ways they connect, interact and socialize. As the role of games have increasingly become a primary social connector, naturally this makes gaming even acceptable in society, diversifying the industry’s audience. We believe that Gen Z now spends more time gaming than consuming traditional media formats.
Highly engaged communities have formed around games and gaming IP and this is where Discord and Web3 communities have been able to capture superfans, offering a place for fans to socialize and chat, and financial participation and collectors items with tokens and NFTs. These are ways gaming companies look to build a direct relationship with its audience. We believe the next generation of games will be built with a community focused approach, much like how consumer social companies were built, such as Musical.ly initially with its Musers.
Emerging Technologies and Business Models
Web3 was mentioned the most as a recent gaming trend followed closely by Generative AI. We are excited to see how Web3 develops now that the hype has passed and believe that Web3 games will still see a lot of innovation in a bear market. Generative AI will have a big role to play in game development and content creation with potential to augment existing workflows. eSports and VR/AR/Metaverse were the least mentioned. We believe Apple launching a mixed reality headset will generate renewed interest in VR/AR/Metaverse therefore we are spending more time in this somewhat overlooked market. Perhaps Gen Alpha will be the first generation to grow up with mainstream mixed reality adoption.
Changes in audience targeting and companies looking to build direct relationships with its users, and consumer familiarity with paying for subscription video on demand (Netflix, Hulu, Disney+) is enabling the shift from advertising to subscription services for games.
Geographical Influences
While eSports was the least mentioned trend, it is growing in relevance in Japan as the younger generation adopt PC and mobile gaming instead of traditional console gaming. This is in contrast with for example China, where consoles are just now penetrating a tightly regulated market. China regulations are likely to get tighter and is the reason why Chinese studios are building for western audiences. However as of writing, we are seeing China relax regulations and approving more game licenses than ever likely due to the poor economy as the country opens up to a post-covid world.
We believe Gen Z are more open to consuming content or products with foreign influences. Kpop, boba tea, Squid Games and Genshin Impact are paving the way. We believe this trend will continue and Eastern culture will continue to have its influence on the younger generation. While Progression does not have a focus on India, a whole generation of mobile users are coming online in India, and could be the next big monetization opportunity for game developers.
Predictions from the Progression Community
As always, thanks to the Progression Community for supporting. We will see you at GDC for Secret Level Social.
What are your gaming market predictions?
