Microsoft, Sony and Nintendo each reported a fall in quarterly video game sales. Ubisoft down. Electronic Arts down. Take-Two shares dropped after its annual forecast missed estimates. Activision underperformed even though it beat its competitors. According to NPD the entire ecosystem — hardware, accessories, and titles — is in sad shape. The main reason, according to analysts, is the post-pandemic fleeing from the house.
But we think there’s more going on than meets the eye. There are way too many subscription-based gaming services: Xbox Game Pass (Microsoft), PlayStation Plus (Sony), Google Stadia, GeForce Now (Nvidia), Nintendo Switch Online, EA Play (Electronic Arts), Apple Arcade, and Amazon Luna. There are the (thankfully free) digital game storefronts and launchers:
Valve’s Steam, Epic Games Store, and Activision Blizzard’s Battle.net. Even Netflix is now offering streaming gaming, though they suffer from marketing woes.
The silver lining? Gaming companies have a really valuable skill set that could be put to serious work (and revenue) in emerging industries. For example, we’re pretty excited about the Microsoft/Unity partnership because it blends cloud, metaverse and traditional gaming prowess. The gamification of everything from
health to entertainment is crying out for good gaming engines. Metaverse gaming and the blockchain will reinvent what it means to game in a DeFi world. Advice to gaming companies? Just like your characters, you need to evolve or die. |