Forecasts are never easy; this is because most of the time near-future forecasts are specifically wrong but generally right. One place to start is to look back in the previous year and extrapolate what could happen in the forthcoming year. 2021 was not short of ground-breaking news for the video game industry, below is a summary of the biggest news items.
Hardware constraints. Supply chain constraints continued to bite into 2021. Consumers struggled to buy the new PS5 or Xbox Series consoles as bots and scalpers scooped up thousands of units.
More games become platform agnostic. GamePass on app devices, Sony’s first-party games on Steam and Steam games on a handheld, it transpired publishers now don’t care how you play their games, they just want you to play their games.
Broken games. From Grand Theft Auto: The Trilogy: The Definitive Edition to Battlefield 2042 to eFootball to New World , the battle between more development time required and hard release dates were very much evident during 2021.
Games and Hollywood / TV. Countless game franchises have crossed into mainstream TV and film production.
#metoo. Better workplace practices reached forefront news as allegations of misconduct became evident.
Acquisitions & IPOs. The year saw Sony, Microsoft, EA, Embracer Group and Tencent make huge strides in acquiring other video game companies and developers. According to Investgame.net, 2021 saw double the investment compared to 2020.
Streaming has yet proved to be the next big thing. Streaming did not take off as some expected. Google pulled out of first-party game development for Stadia, numerous third-party publishers pulled their games out of Nvidia’s GeForce Now and Microsoft interestingly did not release any figures on the launch success of Xbox Cloud Gaming.
Subscriptions continued to grow. By the last count (June 2021) there were 20 million GamePass subscribers, more than double the number compared in April 2020. Nintendo expanded its Nintendo Online service with a new tier, Nvidia GeForce Now released a new high-definition tier and Sony announced it will shake up its existing PS Plus and PC Now services into a new (more appealing) offering.
NFTs. The most divisive news in video games. Gamers have expressed hatred towards NFTs, but the innovation is being embraced by some publishers and video game makers alike, all trying to cash in on this new digital gold rush.
China clamps down. Tencent’s lofty expansion internationally is in stark contrast with the constraints the Chinese government has put on Chinese gamers.
Looking to 2022 many of the prominent news items of 2021 will continue, but we should expect the industry could throw some new surprises our way, providing we do not have any global black swan events like the pandemic of 2020.
Below are predictions for the year. Percentage scale of probability are assigned on degree of expectation.
Growth will return. 100%. The slate of games expected in 2022 are arguably better than those released in 2021. Horizon: Forbidden West, God of War: Ragnarok, The Legend of Zelda: Breath of the Wild Sequel, Splatoon 3, Call of Duty Modern Warfare 2, Elden Ring, Sifu, Gotham Knights and Starfield to name a few. The new first party titles from Nintendo alone will boost sales.
Tencent will continue to expand. 100%. Although Tencent is under investigation by several US security organizations about its numerous investments in US game companies, its expansion West will continue with more investment and acquisitions of smaller publishers and developers.
The transition from physical to digital full game spending will slow. 85%. The massive transition to digital in 2020 will have played out by 2022. The pandemic acted like a catalyst and sped the rate of transition to digital, but as software for the new consoles enter exponential growth, physical will come back into play.
Video game Metaverses will gain investment and a lot of hype. 80%. We will hear a lot about Metaverses this year, publishers could seek to generate new platforms and ecosystems that incorporate several IPs. There will be a lot of experimentation in figuring out how Metaverses will generate new revenue.
NFTs will become ubiquitous. 75%. EA, Square Enix, Take Two and Activision will closely follow Ubisoft and others who have entered the NFT market. We should expect to see some limited rollout of NFTs from most publishers by way of testing the water with gamers.
FIFA 23 will be the last FIFA game from the EA cannon. 75%. This year will see the divorce between EA and FIFA finalized with EA confident in its FUT microtransactions, game engine and fanbase to split away from FIFA without incurring significant damage to brand.
Epic Games will go public. 65%. The scale of investment in Epic these last 5 years has been huge and usually private companies the size of Epic, with an estimated worth of $29 billion, seek an IPO.
More IPs will have a free-to-play element. 60%. Ubisoft and EA will release free-to-play versions of some of their most successful current IPs. For example, EA could announce a free-to-play Battlefield game or Ubisoft will announce a free-to-play Assassin’s Creed game. These games will be supported by microtransactions and NFTs. The NFTs assets could be used in future full price releases of these IPs.
The number of AAA publishers will continue to shrink. 50%. With the news that Take Two will buy Zynga, 2022 could see a major AAA publisher buy another to shore up market share or to seek diversification in portfolio.
Nvidia will release its own Steam Deck equivalent. 40%. The Steam Deck will be a big hit this year, spurning Nvidia to expand its Shield Portable to be more Deck like and to seek a larger share in the portable PC market.
Stadia will flounder. 25%. Stadia will continue to find pressure in seeking relevancy and Google will call it a day and close the service down.
Amazon video games dedicated hardware. 10%. Like the Amazon Firestick, Amazon will expand its Luna service with an announcement of their own games hardware or console (that will work with 3rd party games) destined for 2023/24.
Let’s see what happens…..