State of Play 2024 Winter Edition
Download PDFFeb, 2024 WINTER
EDITION
THE XSOLLA REPORT
STATE OF PLAY
THE XSOLLA REPORTTHE XSOLLA REPORT
INTRODUCTION INTRODUCTION 23
CONTENTS
FOREWORD 6
EXECUTIVE
SUMMARY
8
IN THE NEWS 9 10
INDUSTRY
F E AT U R E
SECTION 1
What does this mean
for the industry?
34
Article 1 | State of play:
The last five years in gaming 12
36
INDUSTRY
MOVERS &
SHAKERS
SECTION 2
54
MOBILE
GAMING
SECTION 3
38
The influence
of women in gaming
56
Trends in mobile
gaming
Article 2 | The
representation of women
in the video game industry
48
What does this mean
for the games industry?
67
What does this mean
for the games industry?
52
Guest Column
Aisyah Ambok 53
Article 1 | Power players:
A spotlight on women leading
the games industry 42
Article 1 | The resurgence
of gaming spending in 2024
60
THE XSOLLA REPORTTHE XSOLLA REPORT
INTRODUCTION INTRODUCTION 45
CONTENTS
CONCLUSION 106
ABOUT
XSOLLA
107
70
PRODUCT
SECTION 4
72
Current news
and trends in game
development
What does this mean
for the games
industry?
86
Article 1 | The power
of the cloud:
Gamer
preferences, monetization
models, and opportunities
in cloud gaming 78
90 INVESTMENT
SECTION 5
92
What are current
investment patterns
in the games industry?
Article 1 | Strategic
Shif ts:
Recent mergers &
acquisitions in the games
sector 96
Article 1 | Fundraising
in a recession:
Creative
fundraising approaches
in game development 100
What does this mean
for the games industry?
103
Guest Column
Walter Souto 89
THE XSOLLA REPORTTHE XSOLLA REPORT
INTRODUCTION INTRODUCTION 67
0102
04
03
FOREWORD
Reflecting on our journey to the Winter 2024 edition
of “The Xsolla Report: The State of Play,” I’m brimming
with pride and excitement. The gaming world, always
a hub of dynamic innovation, has outdone itself, and our
shared efforts continue to propel this industry forward.
I am deeply thankful for the unwavering support and dedication of our
team, partners, and the gaming community. Together, we’re not just part
of the gaming industry but actively shaping its future. I’m confident that
our best days are still ahead.
I invite you to join us as we explore the rich, evolving gaming world
in the Winter 2024 edition of “The Xsolla Report: The State of Play.”
Warm regards,
David Stelzer
A YEAR OF
UNPRECEDENTED
GROWTH AND INSIGHT
This past year has been a watershed moment
in the evolution of gaming. Trends emerge and mature,
profoundly influencing game development, marketing,
and global consumption. Our report dives into these
developments, offering a detailed snapshot
of the industry’s present and future direction.
FINANCIAL
AND OPERATIONAL
MILESTONES
On the financial front, Xsolla’s growth
trajectory is a testament to our innovative
spirit and strategic planning. Our revenue
surge directly reflects our adaptability
to the evolving needs of gamers and our
partners. We’ve broadened our horizons,
offering new services and solutions,
ensuring we stay ahead in this fast-paced
industry.
EMBRACING CHANGE
AND INNOVATION
In this edition, we spotlight the explosive growth areas in gaming. Mobile
gaming, in particular, has made an indelible mark. Its convenience
and accessibility have redefined gaming norms, reshaping how we
engage with games. We’re also spotlighting the rise of cloud gaming
and the integral role of women in this space, emphasizing
the significance of diversity and inclusion.
LOOKING
AHEAD
As we enter 2024, the gaming landscape
is rife with challenges and opportunities.
Our report delves into these aspects,
providing strategic insights for navigating
this dynamic sector. I’m thrilled about
what lies ahead and remain committed
to our continuous growth and innovation
path.
DEAR
STAKEHOLDERS,
COLLEAGUES,
AND VALUED
MEMBERS
OF THE XSOLLA
COMMUNITY
DAVID STELZER
President, Xsolla
THE XSOLLA REPORTINTRODUCTION 9 THE XSOLLA REPORT
INTRODUCTION 8
EXECUTIVE
SUMMARY
IN THE NEWS
RECENT INDUSTRY NEWS
NETFLIX’S CLOUD
GAMING SERVICE
BEGINS TESTS
IN US
Tech Crunch
GOOGLE’S EPIC LEGAL
DEFEAT THREATENS
$200 BILLION APP
STORE INDUSTRY
Bloomberg
E3, LOS ANGELES’
ONCE-MIGHTY VIDEO GAME
CONVENTION, OFFICIALLY
CANCELED AFTER
TWO-DECADE RUN
Los Angeles Times ONLINE GAMING MARKET
SIZE TO GARNER USD 440.89
BILLION BY 2032
Global Newswire INSIDE
PLAYSTATION’S BIG
PUSH INTO INDIA’S
BURGEONING
GAMING MARKET
IGN
As the games industry enters a new year,
the gaming experts at Xsolla have created
this edition of The Xsolla Report to look
back at recent changes in gaming, explore
what we can learn from them, predict
how the industry will continue to evolve,
and analyze their impact on the gaming
community.
The Forecast
The industry reported an average annual
growth rate of 3.9%, with a significant
9.4% increase in 2023 alone.
This propelled industry revenues
to an estimated $106.8 billion. Looking
ahead to 2026, the industry is expected
to grow steadily, reaching $205.7 billion
in revenue.
Not only is the industry forecasted
to continue this upward trend, global
gamers are also expected to reach 3.79 billion by 2026, accompanied by
a growing payer base, which is predicted
to expand to 1.66 billion individuals that
will actively contribute to the gaming
ecosystem. These figures show that
the games market is becoming more
diverse and opens up new avenues
of growth for industry stakeholders.
In the second volume of The Xsolla
Report, our experts will explore the last
five years in the industry, the growing
influence of women in gaming, as well as
the trends and changes in mobile gaming,
cloud gaming, and the investment
landscape. With our experience
in the video game industry, we’ll analyze
current figures and data to inspire you,
our partners, and our community
to unlock new opportunities.
Are you ready to navigate the chapters
ahead, dive into the insights of global
gaming experts, and discover the latest
trends shaping the games industry?
Let The Xsolla Report be your guide.
Section
01
INDUSTRY
FEATURE
13 12
S TAT E
OF PLAY:
The last five years in gaming
The gaming landscape has evolved rapidly over the past five
years, riding the wave of global lockdowns, new tech, and game
development advancements. This expansion has been steadily
increasing for years, but the surge in social and casual gaming,
fueled by millions seeking entertainment and social connections
throughout the challenging period of COVID-19 lockdowns, has
since propelled the games industry to booming heights. Not only
was the gaming sector able to debunk common misconceptions
of video games as isolating, it proved to be a vital conduit
for social interaction during the pandemic.
In fact, the rise in new and existing gamers spending
on consoles and other kits during the pandemic was
so significant that the market expanded by 26% between
2019 and 2021 . These shif ts have shaped the future trajectory
of gaming, spotlighting the industry’s steady growth,
underscoring its global economic significance, and broadening
its appeal across diverse demographics.
26 %
growth in the games
market from 2019-2021
MOBILE GAME INDUSTRY
BY REGIONAL GROWTH
in billion dollars
Source: Ampereanalysis.com
Ar ticle
01
There is also more competition and more ways to play than ever before.
From its pandemic-induced surge five years ago to projections of game industry growth
today, let’s dive into how gaming has developed over the past five years and compare
its behavior to similar global sectors, like ecommerce and entertainment.
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COVID-19
PANDEMIC
SPARKS A SHIFT
IN THE GAMES
INDUSTRY
During the onset of the global pandemic
in Spring 2020, gaming experienced
an exponential rise in user engagement
and spending. Between February and April
of that year, gaming emerged as one
of the most popular activities, witnessing
a substantial uptick in both participation
and expenditure, which highlights
a considerable increase in time spent
on video games across all regions.
Latin American gamers, for example,
increased their playing time by 52%,
with the Asia-Pacific region following
closely with a 42% rise in time spent
gaming. And multiplayer games,
particularly genres like fighting, MOBA,
and battle royale games, experienced
heightened popularity during this period.
A survey among European gaming
audiences revealed that video games
provided a sense of connection, reducing
feelings of isolation and contributing
to an overall happiness during lockdown.
52 %
42 %
increase
in gaming time
increase
in gaming
time
LATIN
AMERICAN GAMERS
ASIA-
PACIFIC
GAMERS
INCREASE IN TIME SPENT GAMING
DURING COVID-19 IN 2020
by region
Source: Statista
1617
CHANGE IN DIGITAL GAMING CONTENT
REVENUE IN THE US & WORLDWIDE
Jan. to Oct. 2020
Additionally, the financial aspect
of gaming saw a noteworthy shif t
during the pandemic period. Digital
gaming spending on in-game
content and paid downloads
surged globally, marking a 12%
and 21% increase, respectively.
This highlighted a significant shif t
towards digital revenues,
an increasingly prominent trend
over recent years. The closure
of high street retail spaces
and the general avoidance
of physical retail amid
the pandemic further accelerated
the dominance of digital and
ecommerce gaming sales over
traditional physical sales.
12 %
increase on spend
for in-game content globally
21 %
increase in global paid
downloads
SALES AND USER
COMPARISON PRE-COVID-19
AND DURING COVID-19
Jan. 2018 to Dec. 2019
VS Jan. 2020 to Dec. 2021 Comprehensive data analysis by Xsolla experts reflects
the substantial growth witnessed in the gaming industry
during the pandemic. When comparing the period before
the pandemic (2018-2019) to the COVID-19 era
(2020-2021), there was a significant increase in both
sales and total user count, with an impressive 120%
growth in sales and a 74% increase in total user count,
which both showcase the industry’s rapid expansion.
Source: Xsolla
1819
COMPARATIVE ANALYSIS:
HOW DOES THE GAMES
INDUSTRY COMPARE
TO OTHER INDUSTRIES?
The games industry isn’t the only sector that’s experienced change in the last few
years. Let’s look at how the games industry has thrived within the broader landscape
of global commerce. These explorations aim to unravel the unique characteristics,
strengths, and potential challenges that distinguish the games industry
from its counterparts by juxtaposing key indicators, market dynamics,
and financial trends.
SALES AND USER
COMPARISON DURING
COVID-19 AND POST-COVID-19
Mar. 2020 to Dec. 2021
VS Jan. 2022 to Oct. 2023 As the world continues to move forward
in the post-COVID-19 era, the positive momentum within
the gaming industry has continued, albeit at a notably
reduced rate compared to the peak pandemic period.
Xsolla’s data indicates a 44% growth in total sales
and a 22% rise in total user count when comparing
the latter part of the COVID-19 era (2020-2021)
to the post-COVID-19 period (2022-2023). This signifies
a sustained growth trend, although at a more moderate
pace, which reflects the industry’s resilience
as it navigates the transition from pandemic-driven
peaks to a stabilized, post-pandemic landscape.
Source: Xsolla
Gaming & ecommerce:
Similarities, differences,
and potential
cross-industry impacts
The gaming industry and ecommerce have shared paralleled
trajectories, experiencing steady growth over the past two
decades. Both sectors have exhibited resilience, maintaining
upward trends that have only been amplified by the COVID-19
pandemic. Social distancing measures and lockdowns provided
an unexpected opportunity for both ecommerce and gaming,
resulting in an increased valuation for both industries.
2021
The ecommerce sector,
in particular, has experienced
rapid growth, with retail
ecommerce sales in the US
surpassing $800 billion in 2022.
This surge indicates a broader
shif t fueled by the increasing
prevalence of online shoppers
among the over 5.3 billion
internet users worldwide.
RETAIL ECOMMERCE REVENUE
IN US FROM 2018 TO 2025 VIDEO GAME MARKET REVENUE
IN US FROM 2018 TO 2025
Mirroring this expansion, the gaming
industry also thrived, with the pandemic
acting as a catalyst for its record-breaking
revenue that reached over $85.2 billion
in 2022 in the US.
Both industries have not only embraced the digital era but have also significantly
contributed to the surge in digital payments. Ecommerce has accelerated the adoption
of digital wallets, mobile payment apps, and contactless payment systems, enhancing
transactional convenience and security. As we explore their growth trends, it becomes
evident that the parallel growth of ecommerce and gaming mirrors a shared narrative
of adaptability, innovation, and resonance with evolving consumer preferences.
in US retail ecommerce
sales in 2022 in US gaming industry
sales in 2022
>$ 800B >$ 85B
SIMILAR GROWTH PATHS
The ecommerce and gaming industries have experienced paralleled growth trends
in the last few years, marked by significant milestones and propelled by shif ts
in consumer behavior – accentuated by the changes caused by the global pandemic.
23 22
OTHER INDUSTRY-SPECIFIC INSIGHTS
Despite the substantial growth during the pandemic, the gaming industry reported
an average annual growth rate of 3.9%, with a 9.4% increase in 2023 alone, reaching
an estimated $106.8 billion in 2023.
Mobile ecommerce, or mcommerce,
accounted for more than 60% of all global
ecommerce retail sales in 2023,
with smartphones accounting for over
70% of retail website visits and generating
the majority of online orders compared
to desktops and tablets. Mobile gaming stands as the largest
sector in the gaming industry, contributing
to approximately 50% of the overall
revenue in 2022.
GLOBAL MOBILE GAMING REVENUE SHARE FROM 2018 TO 2025
GLOBAL MOBILE ECOMMERCE
REVENUE SHARE FROM 2018 TO 2025
MOBILE DOMINANCE
Both ecommerce and gaming have witnessed a significant shif t towards
mobile experiences.
9.4 %
3.9 %
average
annual
growth rate
of the games
industry
growth rate
increase
in 2023
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25 24
Gaming & Entertainment:
Similarities, differences,
and potential cross-industry
impacts
The gaming industry and the broader entertainment sphere share interconnected
dynamics, with overlapping areas influencing consumer engagement and spending.
GAMING EXCEEDS
ENTERTAINMENT
REVENUE GLOBALLY IN 2021
GAMING EXCEEDS
ENTERTAINMENT ENGAGEMENT
GLOBALLY IN 2022
Entertainment
market growth
and shif ts
The global entertainment and media
market is shif ting upward, projected
to grow from $2.3 billion in 2022
to $2.5 billion in 2023, showcasing
a compound annual growth
rate (CAGR) of 8%.
However, gaming has transcended its classification
as a form of entertainment, evolving into a powerhouse
industry in its own right. While average daily engagement
across all entertainment activities (including reading,
watching films, and listening to music) sits at 4.3 hours,
video games outper form them all, generating
engagement and revenue that elevate beyond traditional
entertainment according to Statista , the Motion Picture
Association , and IFPI. In fact, the $205.7 billion games
industry surpasses the $2.5 billion entertainment sector,
solidifying its position and influence as its own entity
within the global media landscape.
THE XSOLLA REPORTINDUSTRY FEATURE
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2627
Industry trends
and market dynamics
The entertainment and media industries have experienced significant shif ts in revenue
dynamics. In 2022, there was a global revenue increase to $2.32 trillion, marking
a 5.4% rise, which is slower compared to the 10.6% growth observed in 2021 during
the post-COVID recovery.
THE GAME INDUSTRY’S INFLUENCE
ON ENTERTAINMENT
The industry’s influence increasingly shapes the broader
entertainment landscape, transcending traditional
boundaries. Notably, video games have inspired
successful films and series, underlining their impact
on mainstream entertainment. Box office records
were set in North America in 2022 by movies based
on gaming franchises, like Paramount’s Sonic
the Hedgehog 2 and Sony’s Unchar ted . In 2023,
The Super Mario Bros. Movie became the first
game-based film to surpass US$1 billion in global box
office sales.
Streaming platforms also recognize the potential,
with Netflix planning or producing multiple movies based
on game franchises and HBO Max’s acclaimed series
The Last of Us further emphasizing gaming’s influential
role in the entertainment ecosystem.
Projections for the entertainment industry
indicate an annual decline in growth rates
over the next five years, with a modest
2.8% year-over-year increase expected
by 2027 , lower than the anticipated overall
economic growth rate of 3.1%. Meanwhile, the games industry
is expected to grow at an annual rate
of 8.7% between 2024 and 2027, resulting
in a projected market volume of $363
billion by 2027.
ENTERTAINMENT
INDUSTRY: GAMES
INDUSTRY:
2829
GLOBAL
CONSUMER SPENDING
ON MOBILE APPS
AND GAMES IN Q3 2023 GLOBAL GAMES
MARKET IN 2023
by segment
Source: Data.ai
Source: Newzoo.com
MOBILE APPS AND SPENDING
Consumer spending on mobile apps and games remains
a significant aspect of the evolving entertainment
market. In the third quarter of 2022, gross app revenue
in the Google Play Store and the Apple App Store showed
slight decreases compared to previous quarters.
This underscores the ongoing shif ts and fluctuations
within the mobile app and gaming sectors, indicative
of evolving consumer behaviors and preferences. PROJECTIONS
AND FUTURE GROWTH
OF THE GAMES INDUSTRY
Looking ahead from 2023 to 2026, the gaming industry is poised
for continued growth and evolution. Revenues are projected
to soar to $205.7 billion, indicating a steady ascent for the global
games market. Notably, this period will see the full swing
of the current console generation, bolstered by the release
of new consoles like the successor to the Nintendo Switch.
Additionally, mobile developers are anticipated to adapt more
effectively to the evolving privacy landscape, further contributing
to the industry’s growth.
The gaming industry’s impact on the broader
entertainment landscape highlights its significant role
in shaping consumer preferences, revenue dynamics,
and the evolution of content consumption across various
platforms. As video games continue to bridge gaps
between traditional entertainment formats, the industry’s
influence is set to grow, solidifying its position
in the broader entertainment sphere.
$ 205.7B
games industry
revenues projected
to reach
3031
Factors driving
the market’s expansion:
3.79B 01
03
02
Global player
count estimated
to reach
1.66B
Global payer
count estimated
to reach By 2026, global player count is estimated to surge
to 3.79 billion, while payer numbers (individuals
contributing financially to the gaming ecosystem) will
grow to 1.66 billion. This substantial increase in both
player and payer numbers will significantly bolster
revenues across the board, reflecting the industry’s
widespread appeal and financial engagement.
2026 INDUSTRY
PROJECTIONS
Integrating artificial intelligence (AI)
and machine learning (ML) technologies
into games will play a pivotal role in driving
innovation, enhancing gameplay
experiences, and attracting a broader
audience.
NEXT-
GENERATION
CONSOLES AND
THEIR IMPACT
Mobile gaming will continue to be a significant driver of industry growth, with mobile
developers adapting more effectively to the changing privacy landscape.
This is expected to fuel the continued growth of the mobile gaming sector, reflecting
the sustained popularity of gaming on portable devices.
The upcoming wave of next-generation
consoles, including advancements like
the successor to Nintendo Switch, will be
instrumental in driving market expansion.
The market’s evolution and revenue
growth will likely be tied to the success
and adoption of these new console
iterations.
GROWTH
OF MOBILE
GAMING INTEGRATION
OF AI AND ML
TECHNOLOGIES
33 32
GLOBAL DIGITAL VIDEO GAME USERS
WORLDWIDE FROM 2018 TO 2028
by segment
Source: Statista.com
The growth of the gaming market will also
witness shif ts favoring digital sales over
physical sales, with digital monetization
driven by digital-only consoles,
early-access options, and an expanding
cloud gaming user base. These
projections indicate a significant increase
in digital video game revenue across all
segments, with mobile games standing
out at the end of the forecast period,
estimated to reach 100 million users,
which is more than double the estimated
changes of other segments (around
4 million users). This surge in digital users
aligns with the projected increase
in digital video game revenue,
emphasizing the digital landscape’s pivotal
role in shaping the gaming industry’s future.
users will be part of the mobile gaming
sector in a few years
> 100M
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01
03
02
04
DIVERSIFY CONTENT
STRATEGIES
TECH
INTEGRATION
AND
INNOVATION
ADAPT AND
BE FLEXIBLE
STRATEGIC
PARTNERSHIPS AND
COLLABORATIONS
Gaming companies could explore innovative content formats,
leveraging successful franchises to expand beyond traditional
gaming and tap into broader entertainment avenues like movies
and series.
Continued integration of cutting-edge
technologies, such as AI, VR, and AR,
will further enhance gaming experiences,
ensuring the industry remains
at the forefront of technological innovation.
Adapting to evolving digital commerce
trends and consumer preferences,
particularly in mobile gaming, becomes
crucial. The industry must remain agile
to meet changing consumer demands.
Collaborations between gaming companies, entertainment
studios, and streaming platforms offer opportunities to create
immersive experiences and widen the industry’s appeal.
As 2024 comes into full swing, embracing the shif ts
in consumer behavior, adapting new strategies, leveraging
technological advancements, and fostering creative
collaborations will be pivotal in shaping the industry’s future
direction and sustaining its growth.
WHAT DOES
THIS MEAN
FOR THE
INDUSTRY?
Key trends, including the convergence
of gaming and entertainment, exemplify
the industry’s dynamism. Video games
command the highest active engagement
hours among various entertainment
options, indicating a deeper integration
of gaming into consumers’ daily routines.
Notably, successful movies based
on gaming franchises and streaming
platforms investing in game-based series
showcase a symbiotic relationship
between gaming and traditional
entertainment.
Despite its popularity and growth,
however, the games industry still faces
challenges, such as fluctuating market
projections due to pandemic-induced
boosts and subsequent declines, and navigating revenue fluctuations
and predicting consumer behavior will
become pivotal for sustained growth.
Additionally, evolving digital commerce
trends, particularly in mobile app
and gaming spending, present challenges
and opportunities for industry
stakeholders to adapt their business
models and strategies.
The comparison of gaming
with ecommerce and entertainment
underscores a fundamental shif t
in consumer engagement patterns,
and the industry stands at the crossroads
of expanded influence and market
integration. To capitalize on these trends
and maintain growth:
Section
02
INDUSTRY
MOVERS &
SHAKERS
3839
THE INFLUENCE
OF WOMEN
IN GAMING
There has been
a significant rise in women
gamers, constituting
approximately
48% of players worldwide
in 2022. Despite this
growing interest, women’s
representation
in the corporate sphere
of the gaming industry
remains limited, with only
30% holding gaming
industry professional roles
and a mere 16% occupying
executive positions within
the top fourteen global
gaming companies.
16 %
30 %
of women occupy executive roles
in the gaming industry
of women hold professional roles
in the gaming industry
01
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INDUSTRY MOVERS & SHAKERS INDUSTRY MOVERS & SHAKERS
4041
Beyond gaming statistics, there is a notable surge
in the representation of iconic and determined women
in both AAA titles and Indie games , contributing
to a more inclusive gaming environment. From characters
like Lara Crof t (Tomb Raider ) and Lenneth (Valkyrie
Profile ) to Jaina Proudmoore (Wor ld of Warcraf t ) and Tifa
Lockhart ( Final Fantasy ), these strong characters serve
as positive role models, shaping a more diverse
and empowering narrative within the gaming landscape.
DISTRIBUTION OF GAME DEVELOPERS
WORLDWIDE FROM 2014 TO 2021
by gender The share of women game
developers has seen a significant
increase from 21% in 2017 to 30%
in 2021. According to a game
developer survey conducted in 2021,
the landscape of the gaming industry
reflects a shif ting gender dynamic,
with 61% of game developers
identified as men, 30% as women,
and approximately 8% choosing not
to identify as either.
02 03
04
There is a positive trend towards
greater gender diversity
in the field, and the influence
of women in the gaming industry
is exemplified by notable figures
like Jade Raymond, recognized
for her contributions
to the Assassin’s Creed series and
as the founder of Ubisof t Toronto;
and Christina Norman, the Studio
Director at Riot Games
with involvement in League
of Legends .
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4243
02
01
POWER
PLAYERS:
A spotlight on women leading
the games industry
Ar ticle
01
The conversation around diversity, equity, and inclusion has
become increasingly central to the evolution and transformation
of the games industry. In this Q&A session, the Xsolla team sat
down with Jordan Fragen, an author for GamesBeat
at VentureBeat, to delve into her insights on women’s vital role
in shaping the games industry’s future.
As we explored her unique experiences in the industry, Jordan
shared her insights on the influence of women in games, as well
as how current diversity trends might impact the future changes
and growth of the industry: In college, I received great advice
to identify my strengths and find a job
that allowed me to be unique and apply
those strengths. Af ter deciding
the medical field wasn’t for me, I fell
in love with data science at school. I was
really interested in esports and gaming,
and I was a decent writer. These three
skills inspired me to start writing about
what people were watching on Twitch.
Since then, I’ve been in the industry
as a journalist and in a research capacity
and have worked in several
eSports-focused outlets, like the Esports
Observer and Esports Insider. I’ve also
worked at research firms like NewZoo.
There’s a way to look at it from industry and personal perspectives.
From my experience, there are a lot of people who are very welcoming
to women. I think that there’s been a lot more focus from a business
perspective on outreach to women who are gamers as gaming becomes
part of mainstream culture. And I think that’s a wonder ful thing.
We’re seeing lots of adaptations of games into film and TV projects;
likewise, we’re seeing lots of brands jump into the game space.
There are a lot of brands that have also been reaching out to audiences
beyond what people think of as the stereotypical gamer. And there
are a lot of brands who realize that there’s a big audience of women who
play games and that it’s a great demographic to try to reach through
games or advertising campaigns.
JORDAN FRAGEN
an author for GamesBeat
at VentureBeat
FROM YOUR EXPERIENCE,
HOW HAS THE REPRESENTATION OF WOMEN
IN THE GAMING INDUSTRY EVOLVED OVER
THE YEARS?
TELL US A BIT ABOUT
YOUR JOURNEY
INTO THE GAMING
INDUSTRY. WHAT
INSPIRED YOU
TO PURSUE
THIS CAREER?
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INDUSTRY MOVERS & SHAKERS INDUSTRY MOVERS & SHAKERS
4445
05
I think there are many preconceived notions
about the games industry that people have
on whether it’s welcoming to women or not.
It’s encouraging to see more qualified women
in executive positions.
In my experience, having industry-experienced
mentors makes it easier to address unique
challenges women face in gaming – whether
that’s professional advice or just talking about
what it’s like to be a woman in games. And as
the years go by, we’re going to see women who
have advanced their careers in the industry,
and that’s going to contribute to a cultural change
in a way that constructs an environment that
helps women succeed and reduces barriers
for them to achieve that success.
In addition to more women holding executive positions in various roles across
the industry — be it in development, business, marketing, and other spaces —
we’re witnessing a generational change. Girls playing games had products made
for them growing up, but it wasn’t as normalized as today. There will always be games
catering to different demographics, yet we’re seeing a shif t where more of these games
become fixtures in the industry.
Even the biggest mobile game last year, Monopoly Go!, doesn’t fit the typical stereotype
of a young male gamer, so we’re seeing more projects that appeal to non-standard
demographics growing within the industry – which allows games to reach more people
and that is great for the games industry as a whole. Finally, with the mobile games
industry being the biggest revenue sector right now, as well as the global rise
in people’s access to the internet, I think we’ll be seeing more players from different
cultural backgrounds joining the industry as well. One trend I’ve noticed is the growing
involvement of venture capital funds in building
relationships with game creators in particular,
and creators now play a significant role
in determining the success or failure of their
games. Part of the reason why games
are succeeding is that content creators have
boosted indie projects. As game creators
establish connections with their audiences
and seek ways to integrate products on their
platforms, they can retain more revenue
in-house. So, the opportunity for game creators
to pick the game they will promote to their
audience of millions is very prevalent right now –
and a great opportunity to capitalize on.
It’s also encouraging to witness game creators
taking on the role of publishers and being directly
accountable to their audience. The increasing
opportunities for promoting games to diverse
audiences, including those traditionally
considered niche, are a positive development.
This shif t from traditional publishing relationships
is an exciting experiment, allowing games
from non-traditional backgrounds to thrive.
And establishing direct relationships with venture
capital funds further enhances the potential
for funding and supporting these innovative
projects. It’s all about aligning the scale
of a gaming project with the size
of the community it aims to reach.
Setting a big AAA budget
for a niche audience isn’t a recipe
for success to begin with. So,
if it’s a smaller project, you have
more opportunity to earn a return.
If you’re making games
for a specific audience,
it’s important to be strategic
and not overextend the project
beyond the opportunity that
already exists. And the more we
see successful games that reach
smaller audiences, the more game
creators will try to make games
for that audience.
WHAT TRENDS ARE YOU
CURRENTLY OBSERVING
REGARDING WOMAN
LEADERSHIP AND DIVERSITY
IN THE GAMING INDUSTRY –
AND HOW DO YOU THINK THEY
WILL SHAPE THE FUTURE?
06
03
04
HOW DO YOU
BALANCE
STAYING TRUE
TO CREATIVE
VISIONS WHILE
CONSIDERING
THE DIVERSE
AUDIENCE
OF GAMERS?
HOW DO YOU SEE THE ROLE
OF WOMEN IN GAMING CHANGING
IN THE NEXT FIVE YEARS? WHAT ARE SOME
OF THE MOST
SIGNIFICANT
BARRIERS WOMEN
STILL FACE
IN THE GAMING
INDUSTRY TODAY?
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INDUSTRY MOVERS & SHAKERS INDUSTRY MOVERS & SHAKERS
4647
I truly believe that those who have a genuine love
for games will thrive in this industry. To make
the workforce as inclusive and diverse
as possible, it’s crucial that those entering
the field are driven by their passion
for the medium and can connect with others over
that shared love. Working in games, I’ve always
appreciated the common ground we all have,
even if we don’t play the same titles. There’s
a universal understanding of what it’s like to be
a gamer that creates a unique bond.
Building healthy relationships in the workforce
is about finding commonalities, whether through
shared experiences or hobbies, and this holds
true across industries. The games industry
is fortunate in that nearly everyone is a gamer,
and fostering a safer and more inclusive
environment comes down to nurturing those
relationships and those experiences.
I was lucky enough to take a class
with Christopher Weaver, one
of the founders of Bethesda, my senior
year of college. He shared valuable advice
with our class, which was to find our
unfair advantage. Games are ultimately
a business, and he emphasized
the importance of identifying what makes
us unique and how that can contribute
value to the industry. This guidance has
stuck with me, and highlighting
the importance of leveraging distinctive
strengths in the gaming business is also
the advice I of ten pass on.
WHAT CAN
BE DONE
TO ENCOURAGE
MORE DIVERSITY
AND INCLUSION
WITHIN
THE GAMING
INDUSTRY?
07
08
WHAT ADVICE
WOULD YOU GIVE
YOUNG WOMEN
ASPIRING
TO ENTER
THE GAMING
INDUSTRY?
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INDUSTRY MOVERS & SHAKERS INDUSTRY MOVERS & SHAKERS
49 48
THE
REPRESENTATION
OF WOMEN
IN THE VIDEO
GAME INDUSTRY
The current landscape
50 %
About 50% of gamers in
the US are women
The gaming industry has witnessed a significant surge in female
gamers, who constituted about 50% of the gaming audience
in the US in 2023. This surge in female gamers is not only
a testament to the industry’s broad appeal but also highlights
the increasing spending power held by women.
Despite this, the representation of women in the gaming industry faces challenges,
including gender biases, a lack of diversity, and the objectification of women, hindering
their progress in the field. Let’s explore the representation of women in gaming
and discover how the industry can benefit from a focus on diversity and inclusion.
GAMER DISTRIBUTION IN THE US
by gender
Source: Statista
Ar ticle
02
THE XSOLLA REPORTINDUSTRY MOVERS & SHAKERS
THE XSOLLA REPORT
INDUSTRY MOVERS & SHAKERS
5051
GAMING AND INCLUSION
While some studios have embraced inclusive hiring practices and implemented training
courses, many companies have yet to take substantial actions to support diversity
and inclusion among their workforce. The challenges faced by women are also
prevalent, with gender biases, a lack of diversity, and the objectification of women
hindering their progress.
A study on workplace culture, specifically focusing on diversity, equity, and inclusion,
revealed that over 50% of companies do not take any actions to support these
principles. Additionally, only 26% of studios frequently use inclusive hiring practices,
and only 18% implement employee training courses. These numbers highlight the need
for more comprehensive efforts to foster an inclusive environment within the industry.
INDUSTRY INITIATIVES
ADDRESSING CHANGE
Industry initiatives and nonprofit organizations, such as Women in Games , WIGI
and GirlsWhoCode , are actively working to provide tools, support, and recognition
for women within the industry. Industry awards further inspire and recognize women’s
achievements in gaming. Industry-wide awards, such as those by MCV/Develop, Women
in Games, and WeAreTechWomen, contribute to recognizing and inspiring women
in the gaming and tech sectors. While these initiatives showcase progress, challenges
persist, including a gender pay gap and continued underrepresentation, emphasizing
the need for sustained efforts in driving positive change within the industry.
COMPANY INITIATIVES TO INCREASE STAFF
DIVERSITY, EQUITY, AND INCLUSION
52 % 7 % 26 %
Inclusive hiring
practices to attract
a diverse pool
of candidates
18 %
Diversity
training programs
for employees
14 %
Employee
groups for
underrepresented
communities
12 %
Diversity training
programs
for managers
12 %
Regular diversity
and inclusion
surveys to assess
the company’s
progress
10 %
Setting
specific diversity
and inclusion goals
and metrics
Racial quota in company
recruitment programs
No discrimination
Participating in programs
like “Girls Make Games”
Hiring more women Of companies don’t take
any actions to support
diversity, equity,
and inclusion
among workers
Other
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INDUSTRY MOVERS & SHAKERS INDUSTRY MOVERS & SHAKERS
53 52
Guest
Column
AISYAH AMBOK
Women in Games
WIGJ Ambassador /
Leadership team
Even though there is female presence in the SEA video game industry, I would
like to see the conditions improve, and the region’s games industry become
safer for women and other marginalized gender identities. There are still less
women in leadership positions in game development in Asia. Leadership
and decision-making positions in local games companies still tend to be
predominantly male.
Other regions such as Europe might be a bit better off in terms
of the presence of women in leadership positions in the gaming industry.
I read a study done by 20-First in 2020 that revealed Western companies rank
highly when analyzed for gender balance in leadership positions in the digital
area, whereas Asian countries rank low due to patriarchal society and work
environments.
A lot of people, and young women specifically, probably aren’t aware that they
can work in the game industry. When they study at school, they are put under
a lot of pressure from their parents to pursue well-paying, traditional jobs like
becoming doctors, bankers or engineers. I think it’s important to create
awareness, and maybe reach out to kids in schools and help parents
understand that game development is a really lucrative industry that people
can build a stable career in.
WHAT DOES
THIS MEAN
FOR THE GAMES
INDUSTRY?
Beyond the principles of inclusivity and fairness,
the inclusion of women in gaming brings about
several significant advantages that contribute
to the industry’s growth, innovation, and overall
health.
Broader Market Appeal. With women constituting
almost half of the gaming market and over half
of the global population, their inclusion
in the gaming industry is not just a matter
of representation but a strategic move to tap
into a significant consumer base. Game
developers who understand and cater
to the preferences of female gamers gain
a competitive edge, as diverse gaming
experiences attract a broader audience,
ultimately expanding the market and increasing
revenue potential. Informed Game Development.
Having women actively involved
in the development process
provides valuable insights into
the preferences and behaviors
of female gamers. This
understanding is crucial for
creating games that resonate
with women, considering their
distinct reasons for engaging
in gaming. In countries like France,
where studies reveal that women
predominantly play games
for competition or self-challenge,
incorporating these insights
ensures that games are tailored
to meet the specific needs and
desires of the target audience. Revenue potential
. The unique reasons drawing
women to gaming provide valuable insights
for game developers . Including women
in the development process is crucial for industry
inclusivity and unlocking the revenue potential
of this growing customer base.
THE XSOLLA REPORTINDUSTRY MOVERS & SHAKERS
THE XSOLLA REPORT
INDUSTRY MOVERS & SHAKERS
Section
03
MOBILE
GAMING
57 56
2023 GLOBAL
REVENUE FIGURES
by region
Source: NewZoo
TRENDS
IN MOBILE
GAMING
MOBILE GAMING BY REGION
The Asia Pacific region remains a key player in the global mobile
gaming market, with a forecasted 46% share of global revenue,
amounting to $84.1 billion, despite a slight 0.8% year-over-year
decline. The ripple effect of previous freezes and slow licensing
practices in China’s games market likely impacted anticipated
revenue growth.
TOP MOBILE GAMING
CATEGORIES BY REVENUE,
IOS VS. ANDROID IN Q3 2023
in billion dollars
Source: Slide 4 Mobile games: state of the market, Q3, 2023, Apptica and Gamelight
ON A GLOBAL REVENUE SCALE
For iOS users, RPG claimed the top spot with $1.33 billion,
trailed by Strategy ($745 million) and Action
($699 million), generating a total revenue of $5.91 billion
worldwide in Q3 of 2023.
• For Android, RPG ($931 million), Strategy ($629 million),
and Casual games ($520 million) emerged as top
grossers, with Android users in Q3 of 2023 contributing
a total revenue of $4.64 billion worldwide. The platform
disparity stands at 56% for iOS and 44%% for Android,
reinforcing iOS as the more lucrative platform.
THE XSOLLA REPORTMOBILE GAMING
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MOBILE GAMING
5859
MOBILE GAMING
SPENDING TRENDS
In 2023, the combined in-app
spending from users in the US
on virtual goods and subscriptions
to mobile gaming is projected
to surpass $20 billion, up from
$19.61 billion on gaming
in-app spending
in 2022.
Source: Statista,
Video gaming
in the United States
IN-APP SPENDING ON MOBILE
GAMES IN THE US
2022 to 2026
DOWNLOADS AND USER
PREFERENCES
Casual (269.4M), Action (212.72M), and Simulation
(202M) categories dominate user preferences
for iOS downloads. The cumulative gaming
installations on iOS reached 1.54 billion,
constituting 20.4% of all game downloads.
• Divergent patterns in user engagement arose
as Android users leaned toward Card, Word,
and Board games, while iOS users favored
Action, Adventure, and Board games. Notably,
iOS users spend more time on average playing
mobile games, clocking in at 35.77 minutes
compared to Android’s 29.34 minutes.
Source: Statista
MOBILE GAME GENRE
REVENUE GROWTH
2021 to 2022
DIGITAL MARKETS ACT
In March 2024, the Digital Market Act (DMA) will result in new European
regulations that allow mobile game consumers to use alternative billing
systems in the app stores. For game developers it implies freedom
of choice and another market shif t nurturing direct-to-consumer
relationships.
• On the other hand, platforms might create a restrictive framework
where game developers will have to apply for entitlements to be able
to use alternative billing, while still paying up to 27% for every purchase.
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MOBILE GAMING MOBILE GAMING
61 60
THE RESURGENCE
OF GAMING
SPENDING
IN 2024
Af ter a slowing of the app economy, which witnessed consumer
spending drop for the first time in 2022, the mobile gaming
industry is poised for a resurgence in consumer spending. Global
in-app spending rebounded with a 5.3% year-over-year growth –
reaching a record $67.5 billion for the first half of 2023.
$ 67.5B
$ 111.4B
spent on apps in the first half of 2023 mobile gaming spend expected to reach
$111.4B by the end of 2024
The dip has been attributed to factors such as high
inflation, economic headwinds, and a market correction
following the pandemic-related highs. However, consumer
spending is set to bounce back in 2024, with a projected
4% year-over-year increase to reach $111.4 billion
by the end of the year – which falls just short of peak
levels during the pandemic at $115.8 billion.
Source: Data.ai
MOBILE GAMING
CONSUMER SPEND
2018 to 2024
Ar ticle
01
THE XSOLLA REPORTMOBILE GAMING
THE XSOLLA REPORT
MOBILE GAMING
63 62
MOBILE CONSUMER
SPEND GROWTH (YOY)
Source: Techcrunch.com
DRIVERS OF GROWTH
The positive growth in consumer spending began in late 2022, following the trend
of holiday-driven spending. That growth continued into the first half of 2023
as consumers downloaded a record 76.8 billion apps globally across the iOS App Store
and Google Play.
THE XSOLLA REPORTMOBILE GAMING
THE XSOLLA REPORT
MOBILE GAMING
65 64
REVENUE SHARE OF LEADING
MOBILE GAMING MARKETS
2017 to 2022
Source: Statista
The US is positioned to be the primary driver
of spending growth in 2024, contributing 40%
to the year-over-year spend . Following closely
are Japan, South Korea, Taiwan, Germany,
and the UK. Mobile game spending in China took
a hit in 2023, declining nearly 11% year-over-year.
But outside China, the picture was brighter,
with a 4% rise, reversing the 11% decline of 2022.
Additionally, several markets, including South
Korea, France, Brazil, and Turkey, saw double-digit
spending growth, fueling the global comeback.
Japan, in particular, is anticipated to account
for 16% of the total growth in year-over-year
spend . These regional pockets of growth signal
a global resurgence in mobile game spending
as these key markets lead the way.
> 40 %
The US will drive >40%
of mobile gaming
spend in 2024
$1 out of $5 of aggregate
growth in spending will
be driven by RPG
and Match games
RPG, Match, Party, and Casino games are expected to be the most popular game
genres to fuel mobile game spending, and unlike previous trends, spending across
these genres is projected to be more evenly distributed. RPG and Match games,
in particular, are poised to drive $1 of every $5 of aggregate growth in spending. These
genre dynamics suggest a broadening appeal for mobile games across various player
preferences and the positive trajectory in mobile gaming spend is a promising sign
for the gaming industry’s overall growth.
THE XSOLLA REPORTMOBILE GAMING
THE XSOLLA REPORT
MOBILE GAMING
6667
INDUSTRY IMPACTS
ON MOBILE GAMING SPENDING
While there’s an optimistic outlook, mobile gaming has encountered industry-wide
challenges that have led to a lowered growth forecast – initially predicted to be
a 2.6% increase but now estimated to be a 0.6% increase year-over-year. Several
industry-wide trends and current events will be important to watch as they might
continue to impact the mobile gaming sector.
EPIC VS GOOGLE
ANTITRUST TRIAL
The Epic Games and Google trial represents a significant impact on mobile games
and how they will be monetized and distributed. Epic Games’ victory could also unlock
a potential spending spree in mobile gaming. Lower app store fees could mean cheaper
in-game purchases and subscriptions. At the same time, increased competition
and developer freedom could bring players more attractive deals and a wider range
of high-quality games.
THE IMPORTANCE
OF IN-APP PURCHASES
(IAP s)
While there may be some
skepticism around the value
of rewarded traf fic,
65% of rewarded users make
in-app purchases, compared
to only 44% of those who don’t.
This highlights the correlation
between rewarded engagement
and user interaction and affects
how of ten and how much users
will spend on mobile games.
WHAT DOES
THIS MEAN
FOR THE
GAMES
INDUSTRY?
The resurgence of mobile game spending in 2024 paints a positive
picture of the industry’s future. Despite its fluctuations, mobile
gaming remains the most significant segment of the gaming
industry by consumer spending, accounting for nearly 50%
of the overall market . The sector is also entering a phase
of normalized growth, moving away from the surge witnessed
during the pandemic’s peak.
Source: Fluentco.com
FREQUENCY
OF IN-APP
PURCHASES
IN MOBILE GAMES
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MOBILE GAMING MOBILE GAMING
69 68
GAMES MARKET REVENUE
IN THE US BY SEGMENT
2017 to 2027
Source: Statista
The success of mobile games is influencing other
segments as well. Console and PC developers
increasingly incorporate mobile-inspired features like
in-app purchases and free-to-play models. LiveOps has
also become a key component in mobile game success
and is now used by 62% of developers in their most
profitable titles, indicating the benefits of LiveOps
for a game’s post-launch phase in ensuring sustained
engagement and monetization opportunities.
And for developers looking to optimize their mobile game
strategies, platforms like Xsolla Web Shop provide
comprehensive solutions for monetization, enhancing
player engagement, and driving overall success in mobile
gaming.
The outlook for games and apps alike looks promising
in 2024, with consumer spending on apps continuing
to drive the bulk of the growth and an increasing number
of mobile games achieving annual revenues
of over $1 billion.
62 %
of developers are using LiveOps
in their most profitable titles
THE XSOLLA REPORTMOBILE GAMING
THE XSOLLA REPORT
MOBILE GAMING
Section
04
PRODUCT
73 72
CURRENT
NEWS AND
TRENDS
IN GAME
DEVELOPMENT
METAVERSE
In 2024, metaverse gaming is expected to remain
niche amid the persisting metaverse winter.
Despite this, significant dynamics are at play
as game publishers and 3D game engine
providers emerge as prime M&A targets
for major publishers and tech giants.
With a compound annual growth rate (CAGR) of 39.8%,
the metaverse market is anticipated to reach $996 billion
by 2030, as companies across the globe, including those
in non-tech sectors, increasingly invest in the technology
for better engagement with customers, brand awareness
expansion and identification of new revenue streams.
Anticipated developments in 2024 include the release
of several metaverse hardware devices. Apple is set
to enter the market with the Apple Vision Pro augmented
reality (AR) headset, scheduled for a U.S. release
in February 2024 with a global rollout to follow. Despite
the anticipated release of these devices, metaverse
gaming will likely not enter the mainstream in 2024
because important technologies driving the development
of the metaverse, like AR and VR, are still being
developed and tested.
METAVERSE MARKET
FORECAST 2021-2030
Source: GlobalData
THE XSOLLA REPORTPRODUCT
THE XSOLLA REPORT
PRODUCT
75 74
GLOBAL CLOUD GAMING REVENUE
2021 to 2028
CLOUD GAMING
0102
While Cloud Gaming is not yet
mainstream , and streaming
games directly via the cloud
is a novel form of game delivery
awaiting full industry adoption,
the industry shows positive
tendencies toward its adoption.
The Cloud Gaming market is poised
for significant growth, with a projected
worldwide revenue of $6.91 billion
by 2024 .
THE XSOLLA REPORTPRODUCT
THE XSOLLA REPORT
PRODUCT
7677
Leading regions in this market include:
• North America (United States, Canada, Mexico)
• Europe (Germany, UK, France, Italy, Russia, Turkey)
• Asia-Pacific (China, Japan, Korea, India,
Australia, Indonesia, Thailand, Philippines, Malaysia, Vietnam)
• South America (Brazil, Argentina, Colombia)
• Middle East and Africa (Saudi Arabia, UAE,
Egypt, Nigeria, South Africa)
03
TOP 3 REGIONS
FOR CLOUD GAMING
GROWTH
NORTH
AMERICA
There is a growing
adoption of Cloud Gaming
among gamers, with 29%
of heavy gamers having
engaged with cloud
gaming services.
And an average of 45%
of cloud gamers use their
smartphone as their
primary device.
04
EUROPE
ASIA-
PACI F IC
THE XSOLLA REPORTTHE XSOLLA REPORT
PRODUCT PRODUCT
7879
THE POWER
OF THE CLOUD:
Gamer preferences, monetization
models, and opportunities
in cloud gaming
Xsolla experts and the research team from 80LV dove into
the realm of cloud gaming in a joint effort to explore the ways
gamers are utilizing it, the way it is being monetized,
and the strategies developers can adopt as this new gaming
market continues to evolve.
With a focus on 700 gamers from diverse backgrounds,
this study uncovered key insights into the relationship between
gamers and cloud-based gaming platforms, the habits and
behaviors of a global gaming community, and the way cloud
gaming might take shape in the industry.
With an average playtime of 15 hours per week, the significance
of gaming in participants’ lives became evident. Global
participation further underscored the survey’s reach,
with responses from countries like the US (24%), Canada (5%),
Italy (5%), India (5%), and beyond. The study also addressed
participants’ readiness regarding technology and infrastructure.
More than half of the respondents possessed a 5G-enabled
device (55%) and actively engaged with 5G networks.
This high-level overview sets the stage for a deeper dive into
cloud gaming solutions, with a particular focus on how
technology, economic factors, and player preferences converge
to shape the future of this dynamic industry.
Ar ticle
01
Source: 80LV
GAMER RELATIONSHIPS
WITH 5G
THE XSOLLA REPORTTHE XSOLLA REPORT
PRODUCT PRODUCT
8081
GAMER PREFERENCES
AND BEHAVIORS
Exploring gamers’ engagement with cloud gaming
and its features is pivotal for developers, marketers,
and industry experts since it can influence games’
content and deployment strategies – especially for game
studios or publishers that plan to launch or distribute
their games in the cloud.
Neela Dass, Program Director of Xsolla Cloud Gaming
underscores the promising landscape for cloud gaming
solutions.
“With a significant 91% ownership of PCs,
as well as an 86% ownership of Androids
and iPhones, a majority of gamers
have the necessary hardware
and the smartphone compatibility
to support cloud gaming. However,
the adoption of cloud gaming hinges
on factors such as internet connectivity,
including 5G, the availability of cloud-
based gaming services, and individual
preferences for gaming experiences.”
INTEREST IN REMOTE
GAMEPLAY
Source: 80LV
Examining gamer
preferences for remote
play features revealed
a few key trends.
First, 43% of people
expressed interest in using
remote play as a learning
tool from skilled peers,
while 33% preferred
independent gaming
experiences. About 25%
remained uncertain about
their interest in remote
p l a y.
THE XSOLLA REPORTTHE XSOLLA REPORT
PRODUCT PRODUCT
83 82
Additionally,
the pay-as-you-go feature,
enabling gamers to start
playing without a lengthy
download and installation
process, offers a quick
and ef ficient experience
that 76% of respondents
found important,
with the appeal lying
in time savings
and reduced wait times
associated
with downloads.
More than 56%
of respondents
appreciated
the opportunity to try
a game before committing
to a full download,
purchase, or subscription,
emphasizing how
important gamers find
previewing their games
and informed decision-
making. Other benefits,
like saving device storage
space (54%) and exploring
overlooked games (40%),
added to the overall appeal
of cloud gaming.
76 %
of respondents preferred the reduced
wait times of pay-as-you-go
Source: 80LV
IMPORTANCE OF HAVING
THE OPTION TO PLAY A GAME
WITHOUT DOWNLOADING
CLOUD GAMING
MONETIZATION
MODELS
As cloud gaming continues to gain traction in the games
industry, the big question when it comes to viability
and longevity is monetization.
Based on the research conducted, a notable 39%
of gamers leaned towards Free-to-Play (F2P) titles,
emphasizing the appeal of accessible gaming
experiences. On the other hand, 53% preferred paid
or premium games, indicating a substantial market
for premium gaming content. A smaller 9% of gamers
opted for subscription-based models.
Additionally, genre preferences and engagement patterns
are important for developers strategizing cloud gaming
launches. According to 80 Level research team:
“Developers should pay attention to action,
adventure, and role-playing games when deciding
on the genre for cloud gaming launches.”
80 Level research team
Developers can strategically position their cloud gaming
products by understanding and leveraging these genre
preferences for favorable market reception.
Two predominant models have emerged, each catering
to distinct player behaviors and commerce trends.
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PRODUCT
85 84
Subscription
The subscription monetization model,
paralleling the success of platforms like
Netflix and Spotify, mirrors users’
consumption patterns outside of gaming
and proves advantageous for companies,
particularly in the context of potentially
high customer acquisition costs.
Companies can establish a predictable
income stream by offering a fixed monthly
fee, effectively covering the expenses
of delivering top-notch gaming
experiences. The subscription model
emerges as a stable and sustainable
approach, providing companies
with a reliable means of recovering costs
compared to the variability
of a pay-as-you-go model. MONETIZATION MODELS
“PAY AS YOU GO” VS “SUBSCRIPTION”
Cheaper
to launch
and maintain More consistent
income: a stable
and sustainable
way for recovering
costs
Less demanding
on audience size Much more
expensive
to implement
for a cloud gaming
provider
More accessible
way for players
to engage with
a particular title Aligns with how
users consume
content outside
of gaming
Pay-as-you-go
There’s also a notable surge in the popularity of the pay-as-you-go
(PAYG) monetization model, which is anticipated to reach
$16 billion by 2030. This model, which allows users to pay solely
for the time they spend playing, is appealing to players who may
lack the financial means to make upfront game purchases
or invest in expensive gaming equipment.
Beyond financial considerations, the pay-as-you-go model
serves as an economical entry point for players to test a game
before committing to the full version, presenting a more
accessible way for engagement with specific titles.
This accessibility, in turn, holds the potential to drive higher
game adoption rates and subsequent purchases. PAYG
subscriptions are projected to grow from $10 billion to $14 billion
by 2028, highlighting the increasing traction of this flexible
payment model.
From a developer’s perspective, exploring additional monetization models, like
incorporating game ads, can offer more stable revenue streams. This diversified
approach enables developers to boost income while offering players various options
for engaging with and supporting their favorite games.
PAY AS YOU GO
MONETIZATION
MARKET
PROJECTIONS
2019 to 2030
(in billion U.S. dollars)
However, the dynamic nature of the subscription model
requires a strategic approach, especially for emerging
players in the cloud gaming industry. With the number
of cloud gaming subscribers projected to grow
from 7 million in 2023 to 87 million in the next 5 years,
implementing the subscription model poses a more
significant expense for cloud gaming providers.
This means developers should carefully assess the size
of the service’s audience and recognize that while
enterprise companies may possess the resources and
buying power to implement cloud gaming successfully,
new startups may face challenges in replicating this.
CLOUD GAMING SUBSCRIBERS
PROJECTED TO GROW FROM
7 MILLION TO 87 MILLION
IN THE NEXT 5 YEARS
THE XSOLLA REPORTPRODUCT
THE XSOLLA REPORT
PRODUCT
8687
WHAT DOES
THIS MEAN
FOR THE
GAMES
INDUSTRY?
The rise of cloud gaming is reshaping
the games industry and changing how
games can be accessed and monetized.
The cloud gaming sector’s substantial
revenue surge, particularly noticeable until
2023, showcases over 60%
year-over-year growth from 2022. While
this growth is expected to align more
closely with rates in other gaming sectors
in the future, it underscores the potential
of cloud gaming in the industry landscape.
GAMES MARKET REVENUE GROWTH
IN THE US BY SEGMENT
2018 to 2027
Source: Statista
60 %
year-over-year growth
in revenue
THE XSOLLA REPORTTHE XSOLLA REPORT
PRODUCT PRODUCT
89 88
Guest
Column
WALTER SOUTO
Head of Product –
Cloud Gaming at AWG Despite the challenges, Cloud Gaming
is focused on reaching three primary target
audiences.
The first is families, particularly those
with children who constantly seek new
games. By offering a subscription model,
we provide an affordable alternative
to purchasing individual games since that
can be expensive. This is especially
important for many families in poorer
regions, where purchasing games individually
may be financially unfeasible.
The second target audience is composed
of mid-core players who used to be
passionate gamers but now have limited time
due to family or life commitments. They may
only be able to play games for short periods
of time, like 30 minutes.
Lastly, we focus on a growing target
audience consisting of gamers who lack
the necessary gaming equipment. They may
rely on platforms like YouTube to watch
others play games because they don’t have
access to high-end computers or consoles.
“Developers should consider introducing new
features when launching a game in the cloud.
This approach is crucial to offer gamers fresh
opportunities and capabilities and give developers
and publishers a chance to stand out
among competitors.”
Nick Bondarenko,
VP of Product at Xsolla
For developers, cloud gaming presents an opportunity to reach
a broader audience by overcoming hardware limitations, catering
to gamers with poor hardware or budget constraints,
and expanding gaming through the cloud. The Xsolla Cloud
Gaming solution enables developers to explore different
monetization models and adapt to gamer preferences
with a solution that not only supports the technical aspects
of cloud gaming, but also empowers developers to manage
monetization strategies efficiently. Meanwhile, cloud gaming
service providers are also poised to invest more in Platforms
as a Service (PaaS), diversifying from consumer gaming offerings
to powering graphically intensive programs, including generative
AI tools.
Cloud gaming platforms are emerging to break down hardware barriers and provide
developers the capability to offer their players the flexibility to enjoy high-quality
gaming experiences across various devices. This broader accessibility accommodates
individuals without high-end gaming hardware and caters to convenient, on-the-go
gaming demand. This ensures a more inclusive gaming environment and presents
businesses with opportunities for success in this evolving sector.
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PRODUCT
Section
05
INVESTMENT
9293
WHAT
ARE CURRENT
INVESTMENT
PATTERNS
IN THE GAMES
INDUSTRY?
Steam went from releasing 8,000+ games in 2019 to 14,535 in 2023,
making it the top platform for video game releases in 2023. The closest
any other platform came in the US in the same year was Switch,
which released 2,360 games.
A total of 4,888 new titles were released across all three consoles
in 2023, which is almost 3 times less than the amount released
on Steam. PlayStation 4 and 5 lead the charge by releasing 1,335 new
games, closely followed by Xbox One/Series X|S with 945 titles.
STEAM GAME
RELEASES BY YEAR
2018 to 2023
Steam released 3x more
games than consoles in 2023
Over 88% of studios with more than 50 employees actively develop cross-platform
games. This involves streamlining player configurations and fine-tuning per formance
for various hardware, which may not seem attainable for smaller studios.
SIZE OF STUDIOS FOCUSING
ON CROSS-PLATFORM GAMES
people
THE XSOLLA REPORTTHE XSOLLA REPORT
INVESTMENT INVESTMENT
95 94
GAMES INDUSTRY INVESTMENT ACTIVITY,
BY DEAL VALUE AND NUMBER OF DEALS
Source: Ampereanalysis.com
In the first half of 2022, $106 billion was spent
across 280 deals, but there was a significant drop
to just $8 billion (a decline of 93%
year-over-year) and 213 deals (a drop of 44%
year-over-year) in the first half of 2023. Despite
this decline, the second quarter of 2023
witnessed a continued acceleration
in investments in artificial intelligence (AI),
with 8 AI-focused companies attracting
investments or acquisitions.
AAA games released in 2023 commanded
substantial development budgets, of ten
exceeding $200 million, with titles like Call of Duty
surpassing $300 million in development costs
alone.
When factoring in marketing expenses ,
the overall investment in a franchise can
skyrocket to over $1 billion. Major studios of ten
report development costs of $660 million
and marketing expenses close to $550 million,
a significant escalation from 5 years ago, when
the budgets for most AAA games ranged between
$50 and $150 million.
203
>$ 500M 93
%
decline in deal value
year-over year
in the first half of 2023
deals in the first half
of 2023, down
from 280 in 2022
game marketing
expenses are
costing more
than 5 years ago
THE XSOLLA REPORTINVESTMENT
THE XSOLLA REPORT
INVESTMENT
97 96
STRATEGIC
SHIFTS:
Recent mergers & acquisitions
in the games sector
Ar ticle
01
2023 saw a shif t in the gaming industry’s focus away
from traditional game releases and towards a rising trend
of mergers and acquisitions (M&A). Over $150 billion worth
of deals were struck, signaling a financial shif t already impacting
gamers, developers, and the strategies behind partnerships.
Let’s analyze the potential impact of these M&As to explore how
they correlate with industry trends like the rise of subscription
services and the challenges and opportunities they offer game
studios.
33 M&As
deals
announced
NOTABLE DEALS
Capping off a wave of industry-wide anticipation, Microsof t
closed its $69 billion acquisition of Activision Blizzard in early
Q4 2023, which has influenced a rise in mergers and acquisitions
across multiple gaming sectors. Savvy Games Group, a rising
player backed by Saudi Arabia’s Public Investment Fund, is one
example, investing over $7.2 billion across 4 deals since January
2022 , culminating in their $4.9 billion acquisition of mobile game
developer Scopely in April 2023. Not only did it mark Savvy’s first
mobile-focused acquisition, it was also the 6th largest gaming
deal to date.
While the number of M&As in the gaming industry dipped
to 33 deals between July and September of 2023, the total deal
value rose to around $5 billion – surpassing three of the previous
five quarters. This trend was echoed in the private financing
space, where approximately $1 billion flowed into 185 deals,
surpassing Q2 figures, which suggests a shif t in focus towards
larger, more strategic transactions despite a slowdown in overall
deal volume.
GAMING M&A
TRANSACTIONS
Q3 2023
The third quarter of 2023 also witnessed a near billion-dollar
surge in private investments, exceeding spring figures and
primarily targeting PC, console, and blockchain companies.
Examples of a few deals during this period include Playtika’s
$450 million acquisition of mobile gaming firms Youda Games
and Innplay Labs, and Goldman Sachs’ $1.7 billion move to take
educational gaming platform Kahoot private.
THE XSOLLA REPORTINVESTMENT
THE XSOLLA REPORT
INVESTMENT
99 98
THE FORECAST FOR 2024
While consolidation will undoubtedly push industry giants like
Tencent, Sony, and Take-Two to even greater heights, it raises
concerns about job security in an already turbulent landscape.
2023 witnessed a wave of layoffs, even at seemingly
untouchable companies like Epic Games, Riot, and Bungie.
The trend will likely continue in 2024, potentially impacting
studios across all levels of the industry. However, public
companies like Nintendo, EA, and Nexon sit on $45 billion in cash
and cash equivalents, potentially fueling further M&A activity,
which could create unique opportunities for smaller studios.
And balancing growth with player experience and adapting
to the changing market dynamics will be crucial for established
giants and rising stars.
THE XSOLLA REPORTINVESTMENT
THE XSOLLA REPORT
INVESTMENT
101 100
0102
03
FUNDRAISING
IN A RECESSION:
Creative fundraising approaches
in game development
Ar ticle
02
The first half of 2023 brought challenging times for the games
sector, as less-than-favorable macroeconomic conditions,
sluggish games market growth, and the crypto winter dampened
investment activities. The downward trend persisted throughout
the first half of 2023, witnessing a 24% quarter-over-quarter
drop in the overall volume of investments. However, despite
the decline in deal volume, investment value saw a surge
of 577%, soaring from $1 billion in Q1 2023 to $7 billion in Q2 2023.
While challenging economic forecasts can be unavoidable,
there are methods and strategies that developers can use
to fundraise during a recession that can keep their game’s
development on track.
577 %
rise in investment value
in the first half of 2023
HOW TO TACKLE
CURRENT
CHALLENGES
GLOBAL VS. LOCAL
Limited control over
OS platforms increases
acquisition costs,
particularly for global
studios attempting
to reach diverse
audiences. Tailoring
gameplay experiences
and localizing marketing
campaigns to specific
regions and cultures while
optimizing app store
presence becomes crucial
to maximize visibility
and downloads.
NAVIGATING PRIVACY
REGULATIONS
The implementation of IDFA and privacy regulations has
posed challenges for traditional store discovery tactics,
reducing data visibility for targeting potential players and
making personalized ads less effective. Adapting
to evolving privacy measures has prompted restructured
fundraising approaches that resonate with broader
audiences and build organic reach through engaging
content and community building.
MEANINGFUL
ENGAGEMENT
WITH GAMERS
With the effectiveness of traditional
per formance marketing waning, game
developers are pivoting towards a more
holistic approach to audience
engagement. Craf ting compelling
narratives that connect with players
on an emotional level and engaging
directly with players through
user-generated content campaigns
and direct-to-consumer strategies can
foster a lasting, loyal gaming community.
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INVESTMENT
103 102
INNOVATIVE
FUNDRAISING
STRATEGIES
These industry-wide shif ts demand a complete
rethinking of fundraising approaches for game
developers, where studios should focus
on creating compelling narratives, fostering
positive word-of-mouth, and building loyal
communities that become their champions.
ALTERNATIVE
ACQUISITION
CHANNELS
Exploring alternative channels like organic
marketing, influencer partnerships, and cross-
promotion opportunities can lower reliance
on costly platform-based acquisition.
COMMUNITY ENGAGEMENT
AND EARLY ACCESS MODELS
Engaging the gaming community directly through early
access models and exclusive perks has proven
an effective fundraising strategy. Developers are leveraging
their community’s support, offering exclusive access
or in-game benefits in exchange for financial backing.
DIVERSIFICATION
OF FUNDING SOURCES
Acknowledging the volatility,
developers should explore a mix
of funding sources beyond
traditional investments.
Crowdfunding, strategic
partnerships, and collaborative
ventures are gaining traction
as more stable options
in diversified funding streams.
Game developers can survive and thrive despite economic fluctuations or downturns
by confronting these challenges head-on and adapting their strategies. And the current
landscape presents an opportunity for innovation, creativity, and a renewed focus
on building meaningful connections with players.
01 02
03
WHAT DOES
THIS MEAN
FOR THE
GAMES
INDUSTRY?
THE XSOLLA REPORTINVESTMENT
THE XSOLLA REPORT
INVESTMENT
105 104
01
OPPORTUNITIES
FOR SMALL STUDIOS
The market’s shif t towards supporting indie games,
driven by a surge in international developers and robust
customer support, promises exciting new games with
substantial commercial potential. Additionally, studios’
integration of generative AI tools is set to revolutionize
production processes, cutting costs and reducing
development time. This shif t presents a favorable
landscape for indie developers to thrive and innovate.
03
02
INCREASE IN VR
INVESTMENTS
SLOWING M&A AND
POTENTIAL PRICE DROPS
VR technologies in game development are expected
to gather substantial investments in 2023.
With a projected market revenue of $31.1 billion in 2023
and user penetration expected to reach 32.6% by 2027,
VR holds immense potential for shaping the future
of gaming.
Recent acquisitions may be revisited due to increased cost
of capital and potential cash shortages among acquirers, leading
to possible sales at reduced prices. The appetite for M&A
is expected to continue to decline, and coupled
with an over-saturation of games (90+ rated games shipped
in 2023) and high-quality content, it might reduce opportunities
for smaller studios and new entrants
REVENUE GROWTH
OF AR AND VR MARKETS
Source: 2023 Unity Gaming Report
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CONCLUSION ABOUT XSOLLA 106107
CONCLUSION
ABOUT
XSOLLA
Xsolla is a global video game commerce company with a robust
and power ful set of tools and services designed specifically
for the industry. Since its founding in 2005, Xsolla has helped thousands
of game developers and publishers of all sizes fund, market, launch
and monetize their games globally and across multiple platforms.
As an innovative leader in game commerce, Xsolla’s mission is to solve
the inherent complexities of global distribution, marketing,
and monetization to help our partners reach more geographies,
generate more revenue, and create relationships with gamers worldwide.
Headquartered and incorporated in Los Angeles, California, with offices
in London, Berlin, Seoul, Beijing, Kuala Lumpur, Raleigh, Tokyo, and cities
around the world, Xsolla supports major gaming titles like Valve, Twitch,
Roblox, Epic Games, Take-Two, KRAFTON, Nexters, NetEase, Playstudios,
Playrix, miHoYo, and more.
For additional information and to learn more,
please visit: xsolla.com
The future of gaming is poised for continuous evolution, fueled by a combination
of financial shif ts, new technologies, and evolving consumer preferences.
This promises new avenues of growth for developers, investors, publishers,
and gaming enthusiasts alike.
Transformative trends like the metaverse, AR/VR, and cloud gaming
are fundamentally reshaping game development and consumption. Meanwhile,
mobile gaming has become a major revenue driver, with direct-to-consumer
web stores empowering developers to connect directly with their audiences.
We’ve also seen major cultural shif ts in the industry, with women now playing
key roles in executive, design, and development. This infusion of diversity
reflects a commitment to inclusivity and positions the industry to tap into
a broader range of perspectives and creative talents.
In an industry full of new developments and shif ting dynamics, gaming thrives
on strategy and adaptability. At Xsolla, we’re committed to supporting our
partners and helping them turn these changes into unique opportunities that
power their success.
XSOLLA.COM