Remember 2022? Me neither. Now that we've got that year out of the way, and 2023 has begun, it's time to look ahead. In today's article, we're exploring the 5 key trends affecting the games industry in this calendar year.
Talent Churn
If you've been paying attention, you've probably noticed that there's been one thing on everyone's mind lately: Layoffs. And while this trend affects the entire tech industry, it's being felt keenly at games studios and publishers.
Tens of thousands of people have been made redundant from big companies like Google, Meta, and Amazon - all of whom have videogame ambitions. But most notably, Microsoft have laid off 10,000 people, thought to include a large number of Xbox staff. 343 Industries, who currently make Halo, were reportedly among the divisions most affected. Riot Games and Unity have also recently let people go, and in the gaming press, there has been a reduction of staff at Gamespot, Giant Bomb, and the Washington Post. To name just a few.
It marks an end, of sorts, to a period of time where it felt like all anyone wanted to do was hire. Now, companies are shrinking in the face of recession, and looking at a post-pandemic normalising of games spending. That said, many will look at the longer term growth of our industry, and see this wave of job losses as a relatively minor correction, in the grand scheme of things. The games industry is still growing overall, and hiring is still an extremely competitive market.
The war for talent is still on. It's just getting more focused. And the right candidates are looking for companies with good cultures, where they can feel safe and secure.
Multimedia Is The New Normal
Arguably a trend long before now, but currently being kicked into overdrive by the success of HBO's The Last of Us TV show - it's fast becoming the norm for videogames IP to be explored in other forms of media, and reaping the rewards of selling your world and characters to consumers of all kinds.
It's a two way street: As well as introducing Joel and Ellie to millions of non-gaming viewers, the popularity of the TV show is causing a surge of sales of the game. For Sony, it couldn't have gone much better. And now, every other franchise wants a taste.
We already know that games like BioShock, God of War, Fallout, Mass Effect and Horizon are getting adaptations. What remains to be seen is whether the success of The Last of Us can be replicated. There are good signs: Cyberpunk 2077 and League of Legends have both benefited from animated Netflix adaptions, long before HBO made it live-action and mainstream.
There's also fertile ground to be explored in other mediums, including podcasts, short form social media videos, interactive fiction, websites, and more. Expect big things this year. And, as luck would have it... We know a thing or two about extended experiences.
Co-op is back
A renaissance of co-operative play finally seems to be on the cards. After the critical success of It Takes Two, and in the face of growing appetite for social experiences that reward and encourage positive connections, we finally seem to be getting more co-op experiences on the horizon. Among them are highly anticipated titles such as Redfall, Minecraft Legends, and Suicide Squad: Kill The Justice League.
Games take a long time to make, so this trend could be sticking around for a while. We know that studios like Bungie are exploring new titles with co-operative aspects, and this summer's selection of press conferences and showcases is expected to reveal a number of titles that focus on collaboration and friendly relationships.
For marketers, a marketplace shift like this presents interesting opportunities, as well as challenges - instead of selling to one person, you're trying to sell to a couple, family, or whole friendship group.
Elsewhere, "live service games" are experiencing a slump at the moment, with games like Rumbleverse and Knockout City being discontinued due to running costs. But appetite for live service is still high among publishers, and still expected to be a key part of the strategy for companies like Sony. Player retention will be critically important, and fiercely competitive. It's a lucrative option, for the studios who manage to pull it off.
Sony and Microsoft in the Spotlight
Speaking of Sony, after a strong showing in 2022, this new year should pay dividends. After months (years!) of PlayStation 5 being difficult to source, they're finally readily available on store shelves. And consumers are buying in droves, bolstered by the positive reception to games like God of War: Ragnarök. The PS5 has finally, truly, arrived.
This year, Sony are taking another bite of the VR apple too, with the PSVR2. It's technically impressive, but expensive, and it remains to be seen whether this is the year that VR becomes more mainstream. On the evidence so far, we'd say it doesn't look like PSVR2 will become a cultural phenomenon like the PS5 - but Sony will be very happy with their current market position, and feel empowered to experiment.
Microsoft, by comparison, have a tough year ahead. We've mentioned the layoffs, which isn't a good start. The games haven't been coming fast enough to satisfy consumers, and although Game Pass represents incredible value (and Hi-Fi Rush is an unexpected success story), they're still trailing in desirability compared to what their rivals are offering. What's more, their big money deal for Activision Blizzard is under intense scrutiny, including from the CMA here in the UK, which may force them to make significant concessions, and limit their ability to take big swings.
That said, Microsoft are incredibly resilient, and patient when it comes to winning over consumers. They will be hoping for a good reception to big titles like Starfield this year to attract more of an audience. Plus, there are some signs that their frosty relationship with Sony may be thawing - so perhaps the Activision deal will go through after all, once they've hashed out a Call of Duty agreement that suits both parties.
Generative AI - Say Hello To The Robots
This one picks up speed here in 2023, but the long term impacts of it may not be fully felt for years to come. Generative AI is changing our perception of what computers can create without human interference - and these burgeoning systems can already be used to create artwork, audio, narrative, and more, to varying degrees of effectiveness.
The very existence of a system that can write for you, paint for you, or compose music for you raises huge questions, that every creative industry will likely grapple with as these platforms become more mature. Putting aside the massive copyright and ethical concerns, it will also likely change what consumers expect out of the games industry - both in terms of products and how they're marketed.
Whether it's AI-assisted game development, AI-written marketing copy, or using AI in novel, experimental ways, we're expecting generative AI to start making an impact in this calendar year. It's only a matter of time before you can chat to an AI-imitation of characters from your game. But it could be a very long road, from the proof-of-concept of today, to the kinds of AI output that some people are dreaming of. Either way, it's a trend to keep an eye on.
In Summary
Every year brings new challenges, and new opportunities. 2023 is no exception. Perhaps the biggest one this year is this idea, or the notion, of connection. We all want to feel connected to something, or someone. The trends we're starting to see this year are reflective of that desire.
We all want to be part of companies that truly value us. We all want to talk, play, engage, and share. And we're all ready to be shown what's next, by whichever companies are bold enough to stake their claim.
Whatever your plans are for 2023, the future starts now.
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