Technovio: Gaming Market Size to Grow by $102 Billion from 2022 to 2027

The size of the gaming market is projected to grow by $102.13  billion between 2022 and 2027, according to research and consulting firm Technovio.

The gaming market is experiencing notable growth driven by the widespread acceptance of AR and VR games, according to the firm. This growth is driven by various gaming platforms, from consoles and PC gaming to mobile devices. Esports, with the advent of VR and AR gaming, is reshaping the industry landscape. Streaming platforms such as Twitch and YouTube Gaming facilitate this growth, while gaming merchandise, peripherals, and in-game purchases further boost the market. Game engines and specialized equipment such as gaming monitors contribute to the market shift.

The gaming market is marked by the rising prominence of cloud gaming, according to Technovio. This shift impacts online multiplayer experiences, offering seamless access across various platforms for both single-player and cross-platform gaming. Furthermore, it revitalizes retro gaming through game mods and innovative gaming software, according to the firm. Cloud gaming’s influence extends to game development and improves gaming communities.

Meanwhile, the gaming market faces a significant hurdle in the form of loot box regulation, impacting gaming publishers, developers and associated stakeholders, according to Technovio. This challenge affects gaming content creation and journalism, constraining the role of gaming influencers in promoting titles. The regulation issue also intersects with gaming accessories and hardware, influencing gaming events’ dynamics.

“Balancing consumer interests while ensuring fair practices is a complex challenge to sustain the market’s growth amid evolving regulatory landscapes,” according to Technovio.

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The market share growth by the casual gaming segment will be significant during the forecast period, according to the firm. By licensing gaming software to the final users, freelance service providers make a profit. The segment’s increasing popularity is due to its simple accessibility where games can be picked up and played from a range of devices, including mobile phones, tablets, or personal computers.

As far as regions, the Asia-Pacific market (APAC) is estimated to contribute 53% to the growth of the global market during the forecast period.

Sony PlayStation 5 Tops 50 Million Console Unit Sales in Three Years

Sony Interactive Entertainment Dec. 20 announced the PlayStation 5 console has surpassed 50 million units sold through to consumers, three years after its Nov. 2020 launch.

“Achieving this PS5 sales milestone is a testament to the unwavering support of the global PlayStation community and their passion for the incredible experiences created by the talented developers from PlayStation Studios and our partners,” Jim Ryan, president and CEO of Sony Interactive Entertainment, said in a statement. “We’re grateful for all of our players who have joined the PS5 journey so far, and we’re thrilled that this is the first holiday season since launch that we have a full supply of PS5 consoles – so anyone who wants to get one can get one.”

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It’s been the biggest November for PlayStation consoles sold through to consumers, according to the company, driven by recent hits such as the Marvel’s Spider-Man 2 from Insomniac Games, as well as partner titles including Baldur’s Gate 3 from Larian Studios and Alan Wake 2 from Remedy Entertainment and Epic Games. EA Sports FC 24, the newest entry from the perennial sports favorite, and the PlayStation debut of Roblox have also been hugely popular with the community, according to Sony.

PS2 is still the top-selling console ever with 159 million units sold, according to analyst Michael Pachter at Wedbush Securities. Nintendo DS is No. 2 with 154 million units, and Nintendo Switch with 134 million.

WBD: Video Games Help Grow ‘Other’ Business Segment Q3 Revenue 9% to $200 Million

The video game launch of Mortal Kombat 1 and continued success of the Hogwarts Legacy game franchise helped Warner Bros. Discovery up its “other” business segment revenue by 9% to $200 million in the third quarter (ended Sept. 30), from revenue of $192 million in the prior-year period. The “other” segment includes home entertainment, with DC Comics’ antihero Black Adam and Oscar-nominated Elvis spearheading packaged-media sales in 2023.

“[Video games have] been profitable in each of the last 15 years averaging more than $400 million in [pre-tax earnings] the last three years alone,” Warner Bros. Discovery CEO David Zaslav said on the fiscal call. “We believe games is a critical and very valuable asset for the company with a great deal of potential for growth. Games has consistently enjoyed among the highest [return-on-investment] of any of our businesses.”

Overall studio segment operating income fell 5% to $727 million on revenue of more than $3.22 billion, compared to operating income of $762 million on revenue of $3.08 billion in the prior-year period.

On the theatrical side, Barbie remains the highest grossing movie in 2023 and in Warner Bros. history, generating nearly $1.5 billion at the global box office. The Nun II was the six installment in “The Conjuring” universe to cross $250 million at the global box office. As a franchise, “The Conjuring” universe films have grossed nearly $2.3 billion globally, the most of any horror franchise, according to Warner Bros.

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Nintendo Posts 22% Switch Hardware Unit Sales Decline

Video game hardware/software manufacturer/publisher Nintendo May 9 announced that it sold almost 18 million Switch consoles in the fiscal year ended March 31. The tally fell 22.1% from around 23 million units sold in the prior fiscal year.

Nintendo attributed the unit sales drop to shortages of semiconductors and other components that impacted production until around the end of summer.

“We did not experience the growth in sales mainly during the winter holiday season that we saw in the previous fiscal year,” the company said in a statement. “The sales situation for software remained stable, but unit sales declined 9% year-on-year to 213.96 million units, affected to some extent by the decline in hardware sales.”

On the flipside, Nintendo-branded software titles flourished. The company posted strong sales with 35 titles selling 1 million units each.

Pokémon Scarlet and Pokémon Violet recorded combined unit sales of 22.1 million units, and Splatoon 3 sold 10.67 million units. Other new titles released during the year included Nintendo Switch Sports, which sold 9.6 million units.

Among titles released through the end of the previous fiscal year, Mario Kart 8 Deluxe sold 8.45 million units (for cumulative sales of 53.79 million units) and Kirby and the Forgotten Land (cumulative sales of 6.46 million units).

Finally, current box office blockbuster The Super Mario Bros. Movie, which was released in theaters in April, has topped more than $1 billion in global ticket sales. Nintendo said the movie underscores its ongoing efforts to expand consumer access to Nintendo IP.

“Through initiatives like this, we will work to continually grow our dedicated video game platform business, which is our core business,” Nintendo said.

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This Week’s MPN Podcast: Superhero Film Slump; Netflix Gaming; ‘Rocky III’ Steelbook and Premium Physical Content

On this week’s episode of the Media Play News podcast, hosts Charles Parkman and Charlie Showley open with an analysis of the current state of superhero movies. Shazam! Fury of the Gods premiered below projections and, coupled with the lackluster reception of Ant-Man and the Wasp: Quantumania, calls into question how exhausted audiences are of this genre. Charlie and Charles take the contrarian opinion and call out how the “Shazam” sequel was in development before the James Gunn/Peter Safran DC leadership shakeup. They cover a few creative movies that have elevated the otherwise surface-level superhero genre such as the indie film Chronicle.

Netflix’s gaming offerings, having launched several dozen titles last year, are set to more than double in the coming year. Charlie is mortified that the No. 1 played game on Netflix is the tie-in game to its popular reality TV show “Too Hot to Handle,” but on closer inspection is intrigued by the variety of other games in its library. In spite of a reality TV-based game occupying the top spot, Netflix has ported multiple critically acclaimed indie games to its service, and holds exclusive rights to a mobile port of a recent, popular “Ninja Turtles” game. Last, given how the mobile gaming market absolutely dominates the total revenue from gaming and how just about everyone with a Netflix account also owns a smartphone, there is a lot more potential than one would expect for Netflix gaming to increase in popularity.

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Finally, Rocky III has gotten a Steelbook release at Best Buy as part of a series of steelbook releases for all four Rocky films. The hosts talk about other special editions of movies they own and the fun that comes from collecting limited releases of physical media. DVDs and Blu-ray may have passed their peak in retail consumption but enthusiasts will always have an interest in premium versions of their favorite films.

Distributor Alliance Entertainment Completes Adara Merger

Home entertainment distributor Alliance Entertainment Holding Corp. has completed its merger with Adara Acquisition Corp.

The business combination was approved at a meeting of Adara’s shareholders on Jan. 18, 2023.

Alliance Entertainment (which is the parent of Mill Creek Entertainment and Distribution Solutions) distributes music, movies, consumer electronics, compact discs, collectibles, vinyl LP records, DVDs, Blu-rays and video games.

Beginning Feb. 13, 2023, Alliance Entertainment’s shares and warrants will be quoted on the OTC under the ticker symbols “ADRA” and “ADRA WS,” respectively. Concurrent with Alliance Entertainment’s OTC quotation, Adara Acquisition Corp. has been delisted from the NYSE American. Alliance Entertainment also intends to seek to list on the Nasdaq Capital Market, according to a press release.

Chairman Bruce Ogilvie and CEO Jeff Walker will continue to lead the combined company, along with its current management team.

This transaction values Alliance Entertainment at approximately $480 million. As a public company, Alliance expects to be able to make further investment in growth, including automating facilities, upgrading proprietary software. Management believes the transaction also positions the company “to drive inorganic growth through a roll-up strategy of acquiring and integrating competitors and complementary businesses,” according to the release.

“We believe that today’s milestone combined with our strong revenue growth, expanding customer base and product offering, and several successful acquisitions, will help accelerate our future expansion initiatives,” Jeff Walker, CEO of Alliance Entertainment, said in a statement. “Alliance Entertainment today is well positioned to continue to capitalize on shifts towards e-commerce and omni-channel strategies, especially with retailers and manufacturers vastly increased reliance on their DTC (direct to consumer) fulfillment and distribution partners. We are at an inflection point that now positions us to execute a multi-prong growth strategy that we expect will deliver a double-digit revenue growth rate with strong cash generation to the bottom line.”

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“This business combination will further enable our significant focus on a strategic roll-up strategy of acquiring and integrating competitors and complementary businesses which we believe will drive an accelerated competitive position and value creation,” Bruce Ogilvie, chairman of Alliance Entertainment, said in a statement. “Combined with further investment including automating facilities and upgrading proprietary software, we are confident we can grow revenue and expand margins. In this next phase of our development, we expect to see growth from enhancing our DTC relationships to grow existing revenue lines and improving capabilities which will generate a more attractive overall service offering. We will also continue to expand into new consumer product segments, growing our product offering and providing more to our existing customer base while attracting new customers in the process.”

“We congratulate Alliance Entertainment on today’s accomplishment and look forward to their continued evolution as a leading DTC and eCommerce provider for the entertainment industry,” Tom Finke, CEO and chairman of Adara Acquisition Corp., said in a statement. “We are confident Alliance Entertainment will provide shareholders with a diversified investment alternative as one of the largest physical media and entertainment product distributors in the world. We believe their expanding use of automation technology to further impact efficiency, cost and capacity for future growth will deliver long-term value. We look forward to collaborating with Alliance Entertainment as they strategically position the company to achieve its growth objectives.”

Ubisoft’s ‘Valiant Hearts: Coming Home’ Among Games Newly Available on Netflix

Ubisoft’s game Valiant Hearts: Coming Home, the sequel to Valiant Hearts: The Great War, is now available exclusively on Netflix, the streamer announced.

The title joins the Netflix games roster in the Netflix mobile app with three others that launched earlier this month: Teenage Mutant Ninja Turtles: Shredder’s Revenge, Narcos: Cartel Wars Unlimited and Puzzle Gods.

In Valiant Hearts: Coming Home, players become an unsung hero, solve puzzles, fly above chaos and heal the wounded in the follow-up to the adventure game inspired by World War I. As World War I rages on, two brothers fight to survive the trenches and find each other again. Their paths cross with new heroes who share in the joy of reuniting and surviving the horrors of the Western Front. Valiant Hearts: Coming Home is the second installment of the BAFTA Award-winning game Valiant Hearts: The Great War. The sequel follows in the footsteps of the original game and continue to tell stories of ordinary people thrust into the extraordinary circumstances of World War I.

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In Narcos: Cartel Wars Unlimited, a strategy game based on the Netflix series, players lead their own cartel.

In TMNT: Shredder’s Revenge, players join Teenage Mutant Ninja Turtles Leonardo, Raphael, Donatello, Michelangelo or other familiar friends in the 1980s-inspired game. Players battle as the Teenage Mutant Ninja Turtles across a range of classic TMNT locations.

In the mythic puzzler Puzzle Gods Match, players switch elements to level up, defeat Little Hades and rescue the gods in the Land of Olympus.

CTA Tech Trends: Gaming Growing, Services Ascendant

LAS VEGAS — Gaming is increasingly taking over leisure time for the average gamer, said Steve Koenig, VP of research at the Consumer Technology Association.

Speaking during the opening “Tech Trends to Watch” presentation Jan. 3 on the eve of the CES event, he noted that in 2019 the average gamer spent 16 hours a week gaming.

“Today it’s a full day. 24 hours. 24 hours a week,” he said.

Why are people spending so much time gaming?

It’s for escapism, entertainment and competition, but it’s also for socializing, he said.

“Increasingly, it’s about connection and socialization,” he said. “The game is really a construct for socialization.”

After the pandemic, consumers signed up for more services and “consumers really are sticking with those,” he said, showing a chart that indicated the level of video streaming services would remain stable from 2021 through an estimated 2022 and 2023.

It’s “more about services and less about the hardware itself,” he said, adding “I think the whole ad-supported business model” will help extend the entertainment streaming business.

He presented CTA research that showed that 59% of consumers planned to use video streaming more post-pandemic, with 36% planning to use it about the same and only 5% planning to use video streaming services less. As for video game services, 50% indicated they planned to use them more, 39% about the same and 10% less.

Source: CTA

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Game Developer Spry Fox Joins Netflix as In-House Studio

Spry Fox is joining Netflix to become its sixth in-house games studio, according to a blog post from Amir Rahimi, Netflix’s VP of game studios.

“Spry Fox is an award-winning independent studio focused on cozy, original games,” he wrote. “Their unique approach to game development and success with titles like Triple Town, Alphabear and Cozy Grove will help accelerate our creative development in another beloved genre and add to the growing variety of Netflix’s games catalog that will have something for everyone.”

“When David and I founded Spry Fox 12 years ago, our goal was to create a place where kind, creative people could make beautiful, original games in a supportive environment that brought happiness to the people who played them,” Daniel Cook, co-founder of Spry Fox, said in a statement. “After many heartfelt conversations, we are all excited about joining Netflix as an in-house game studio and building amazing games together.”

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“We look forward to creating games with a studio whose values — a relentless focus on employee and player joy — align closely with ours,” Rahimi wrote. “Our games journey has only just begun, but I’m proud of the foundational work we’ve been doing to build out our in-house creative capacity so that we can deliver the best possible games experience — including no ads and no in-app purchases — to our members as part of their membership.”

Gaming IP a Hot Commodity, According to Ampere Analysis Study

The number of adaptations of video game-based intellectual property (IP) by the TV and movie industries has been growing consistently over the past two decades, with 20 to 25 movies and TV series now released per year based on games, according to a new study by Ampere Analysis. The proportion of TV series in particular is increasing over time. 

An increasing proportion of these releases are attributable to subscription VOD platforms, such as Netflix and Amazon, which have been responsible for a number of original releases in the past five years, according to Ampere.

Historically, most franchise building across video and games sectors has focused on entertainment IP being adapted into spin-off games. In fact, over a 40-year period more than 2,000 games were released based on existing entertainment IP — movies, live-action or animated TV series and anime content. In the early 2000s, there were typically just a small handful of major adaptations based on video games, such as movies based on the “Lara Croft: Tomb Raider,” “Resident Evil” and “Pokémon” franchises.

However, since the early 2010s, the volume of game adaptations into TV shows and movies has been rising, peaking in 2016. Examples include the “Sonic the Hedgehog” movies and the “Arcane” animated TV series based on “League of Legends.”

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This boom in game adaptations has occurred during a period in which spending on film and TV content is at an all-time high, but a lot of revenue (especially box office) is concentrated around a small number of franchises. These are mostly owned by the major studios, leaving SVOD platforms searching for new sources of inspiration. At the same time, there has been an explosion of valuable original IP in the game world, through games such as “Roblox,” “League of Legends,” “Fortnite” and “Minecraft.”

Several high-profile game adaptations have performed very well recently, Ampere noted. These include “Arcane,” which remained in the Netflix top 10 for six consecutive weeks, and Uncharted (Sony), which grossed more than $400 million at the box office globally.

“From a cinematic viewpoint, studios recognize the value of utilizing gaming IP and brand recognition with pre-existing fan bases,” Ampere Analysis research manager Lottie Towler said in a statement. “SVOD platforms meanwhile also see it as an opportunity to create new original-based TV franchises, that differentiate them from competitors in an increasingly competitive market.”

Quality of content based on games has been rising, too, which in turn helps to increase the potential audience, Ampere noted. Since 2017, titles have been both higher-rated overall and critics’ ratings are reaching parity with audience ratings, implying a marked increase in overall quality without sacrificing audience enjoyment.

“We expect further growth in cross-format IP, particularly generated from games, and there is a consistent upward trend in game adaptations,” Towler said in a statement. “Of the 118 commissioned titles tracked since Q4 2018, just over half (63) are yet to be released, meaning the number of game adaptations available to consumers is only going to increase.”