What do Naavik staff, friends, and partners forecast for the year ahead? We collected a rich set of predictions covering evolving business models, game design innovations, and the market as a whole. We’d also love to hear what you think – feel free to send us a note at [email protected] with your own predictions.
Alexandra Takei
Naavik Podcast Host & Director at Ruckus Games | LinkedIn
#1: Development: Time and Creation Costs Down to Zero – You’ll see development budgets and staffing needs for titles, even in AAA console and PC, decline. The AAA industry will recalibrate and ask itself: Are the profits and losses of these businesses healthy, and are we being good stewards of our shareholder’s capital? UGC, AI, and distribution tooling will continue to supercharge the individual game developer and the premium market.
#2: Live Service Titles: Goose Eggs – Zero new live PC and console F2P hits. Premium is back.
#3: Games VC: It’s Either Up or Out – Investors that entered the asset class during the zeal of the 2020-2022 pandemic boom will realize that the return horizon and proof point incubation takes longer in games than Silicon Valley tech. It will be a buckling down for those that know what they are doing or a retreat for those that were expecting markups similar to fintech, B2B SaaS, or the prototypical consumer.
Carson Taylor
Naavik Contributor & Product Strategist at Samsung Electronics America | LinkedIn
#1: UGC Scene Intensifies – Roblox versus Fortnite continues to heat up with new creator tools (often with AI), collaborations, and advertising; Minecraft will begin to seriously decline as a result.
#2: New Tech Falls Flat – Apple Vision Pro does nothing for gaming in 2024; but the XR winter could be thawing. Look out 2025!
#3: Platforms Intensify their Liberalization – Microsoft launches an Android app store with Game Pass partially integrated. Content from third-party publishers will also be on the store, but most content will also be available on Google Play.
#4: Better Opportunities Lie in Mobile and PC – Mobile growth is better than 2023. PC continues its growth trajectory, but console growth sputters — especially outside of Fortnite.
#5:Cloud: the One to Watch Out For – Cloud gaming has some major announcements coming from startups and established players, but user adoption continues to grow relatively slowly.
David Elton
Naavik Roundtable Panelist & Gaming Industry C-Suite Veteran | LinkedIn
#1: Layoffs Continue – We will unfortunately continue to see layoffs during 2024, in addition to Unity and at some large companies, but we will also start to see some new hiring taking place. Overall, 2024 will be a mixed bag in terms of hiring and layoffs.
#2: More M&A and Investment than 2023 – We will see some smaller-scale mergers and acquisitions over 2024, as well-funded companies see opportunities to acquire companies for far cheaper than they have been over the last three years, including some acqui-hires. Early stage investment will increase over 2023, but will not top the levels of 2019. There is potential for Savvy to make another big splash.
#3: More Brands/IP in mobile games – As mobile companies look for different and less risky ways to acquire users, we will see more IPs added to the games. Companies will see the success of adding Monopoly IP to a Coin Master-type of game and look to recreate its magic formula.
#4: Quieter Releases – Companies will be looking to spend every dollar wisely, so expect to see smaller launch campaigns and attempts at alternate marketing to find the most players for as cheaply as possible.
#5: More Investment in the West by the East – With the drafts of the new monetization regulations being floated by the Chinese government, look for renewed investment by the big Chinese publishers (such as Tencent, NetEase, miHoYo) in Western markets, with investments and studio purchases.
#6: Big Year for Indies? – It’s a potentially lighter calendar for big releases than in 2023, and quieter releases by the big publishers could allow more room for the indies this year, allowing them to shine even brighter.
David Taylor
Naavik Contributor & UGC Expert | LinkedIn
#1: UGC Platform Owners to Retain More Revenue – Revenue for UGC game platforms will continue to grow, but there will be a tightening of the belt around UGC game developer payouts as a percentage of total platform revenue.
Most notably, I expect Fortnite Creative developer payouts to contract this year. Epic-owned experiences were the primary drivers of engagement and monetization for Fortnite in 2023. Epic will understandably look to claw back a larger share of its engagement-based payout pool until the UEFN tool set enables game development comparable to Epic's first-party games like LEGO Fortnite and Rocket Racing.
#2: Accessibility of UGC Tools and Layoffs to Drive a Startup Boom – There were 10,500 game layoffs in 2023, and there have already been almost 3,000 in the first couple weeks of 2024. I expect game designers and developers to weather these challenging times in UGC game platforms like Roblox and Fortnite Creative, where they can solo-develop their own games and reach millions of players just by hitting “publish.”
While nonnative developers will need to familiarize themselves with the nuances on these platforms to be successful, I'm hopeful we will see at least one breakthrough success on Fortnite or Roblox from a nonnative game developer.
Devin Becker
Naavik Contributor and Consultant & Game Economist at Nami | LinkedIn
Web3 to Still be Strong in the East and Fledging in the West – For web3 in 2024, I expect the West will remain disinterested, except when it's mostly a profit chasing opportunity. Genres that are collectible-centric like trading cards and sports may still see some minor interest. France could be the exception in the West, as players there have shown strong interest in both genres with Sorare and Ubisoft.
Asian countries will cultivate the game side of things for web3, with better reception for collectibles in gaming that include allowance for pay-to-win and gacha elements. The more complex multicurrency economies in multiplayer Asian RPGs and strategy games will also blend with further token experimentation. China will only be a minor player due to the back and forth between the CCP and gaming. Many Japanese and South Korean developers see it as the future, but the Japanese government is supportive and the Korean government isn’t, so Japan will push internally and Korea will push externally.
Most web3 gaming innovation will happen on Android, web and regional platforms, with Steam, iOS and consoles budging very little, and web-based workarounds just facilitating further expansion of the web side. Web3 technology and financial use will continue to mature faster than game usage. I expect language barriers to obfuscate much of the activity.
Harshal Karvande
Naavik Contributor & Game Design Lead at Rovio | LinkedIn
Big Year Ahead for Dream Games and its Royal Match IP – We’ll see Dream release a second, even more successful puzzle game, Royal Kingdom, expanding on the established Royal Match IP and prove it isn’t a one-hit wonder. This will cement its reputation as a leading casual gaming studio and prime it for the next biggest acquisition in gaming.
With the addition of Ed Catmull as strategic adviser, the co-founder of Pixar and a pioneer of 3D animation, Dream Games will explore the transmedia opportunity, and the Royal Match IP will challenge the established players in film and TV.
Jordan Phang
Naavik Consulting Partner | LinkedIn
Regulations to Drive Bold Experimentation with Monetisation Models – I predict we’ll see more experimentation in IAP models in 2024. Besides the tried and true models of gacha and/or battle passes, developers will begin trying out new ways to entice players to spend. This may well be accelerated due to the draft regulations in China that shocked the industry in December 2023, the ongoing impacts from IDFA deprecation, and the looming introduction of Google’s Privacy Sandbox in 2024.
Whale-focused monetization techniques will be less effective moving forward, and developers will need to spread the revenue load across player segments by having spend be much more meaningful.
Matthew Dion
Naavik Contributor & Game7 Biz Dev | LinkedIn
#1: Watch Out for the Next Nintendo Console – Nintendo will announce and launch a new console, but it will be an incremental upgrade over the Switch (perhaps a Super Nintendo Switch?). The big selling point will be backward compatibility with original Switch games, and (hopefully) an increase in performance to handle titles like Call of Duty, which was promised as part of the Activision-Microsoft merger negotiations. Any other upgrades will be minor, at best — fixing joystick drift, upgrading storage capacity, and so on.
#2: Land of the Rising Revenues – Japanese game publishers on the whole will have a strong year, as Nintendo launches new hardware, Sony continues to lead in the console wars (while Microsoft is busy integrating Activision and trying to reinvigorate Game Pass), and publishers from other parts of the world struggle with more layoffs (North America, Europe) and regulatory challenges (China). This will result in more game delays; more underperforming, half-baked games being released; and opportunities for companies like Capcom, Square Enix, and Bandai Namco to outperform the competition.
#3: Fully Onchain Games to Establish Foothold in web3 – The niche of fully on-chain games in web3 will roughly double in size in 2024.
Miikka Ahonen
Naavik Contributor & Co-Founder at Lightheart Entertainment | LinkedIn
#1: Nothing New Under the Sun – The top grossing list on mobile will remain static. Mobile games will continue to be marketed primarily through direct response channels. The top new games on PC and console will be existing intellectual properties with a premium business model, and Web3 games will not take off. Even the new Nintendo Switch will be backwards compatible!
#2: Micro Teams Will Surprise With Innovative Gameplay and Inherent Market Pull – It’s huge teams or tiny teams, no in-betweens. While the growth of conventional game teams has been widely covered, the rise of micro teams (one to three developers) is a less explored narrative. There are already numerous examples of tiny teams succeeding on varied platforms (Eatventure, Hunt Royale, Lethal Company, and Dredge, to name a few).
Now, incumbents are more risk-averse than ever, leaving ample room for innovation. At the same time, off-the-shelf tools for developing, publishing, marketing, and operating a game are more powerful and easier to use than ever before.
#3: Most Predictions are Already Happening Through Gradual Change – For many years, these predictions have talked about three things: hybrid business models with a paid and an advertising component, Apple and Google’s crumbling platform duopoly, and the rise of cross-platform games. Even though there has been no upheaval, all of the above are already happened or have started happening.
Niek Tuerlings
Naavik Contributor & Lead Game Designer at Moonlit Games | LinkedIn
#1: New Games from Hypercasual Publishers Will Have Higher RPDs – With continued efforts in hiring casual and midcore game developers and their existing expertise in the increasingly thin margins of the CPI/LTV equation, these companies will keep optimizing their hit-filter funnels as their nonpublishing competitors are less able to innovate.
#2: The First Successful Mobile Game with NFT Implementation – After years of strife, new incumbents in the web3 ecosystem will find ways to release their products on the Play and App stores. They will enable their players to provide assets with tangible value that can be traded outside their game clients. Success will be achieved leveraging traditional F2P practices like IAPs and live ops, combined with novel web3 monetization and promotions like mints and community-driven, external tournaments.
Niko Vuori
Naavik Podcast Host & CEO at Linus Labs | LinkedIn
Mass Layoffs Could Bring New Players and Investment Deals – 2023 was a tough year for game developers. According to unofficial counts, over 9,000 gaming professionals lost their jobs from companies both large and small. Almost 1,000 each were lost at Epic Games, Embracer Group, Hasbro, and EA. Smaller layoffs impacted Bioware, Microsoft, Bungie, Naughty Dog, Ubisoft, Amazon, CD Projekt Red, Sega, Unity, and Activision Blizzard.
But every time there has been adversity in the game industry, an explosion of creativity has followed. So, laid-off colleagues from those gaming giants will band together to form new gaming startups, bringing fresh twists to the genres they know best. After a tough 2023 for VC funding for games, 2024 will bring a new dawn as the most promising of these new ventures get funded. And as a result, we will witness the next wave of innovation in gaming, after half a decade of creative stagnation driven by (relatively) easy UA, high profits, and pandemic-fueled overhiring. 2024 will be the year of the gaming startups.
Tom Kinniburgh
Naavik Senior Consultant & Games Industry PM and GD Veteran | LinkedIn
#1: Crypto Gaming Isn’t Dead – Despite the recent surge in the stock market and BTC and crypto seeing 150%+ gains, renewed attention is now focused on tokens. We will still witness a lot of successful but short-lived tokens or huge NFT collections, but I believe we will also see the resurgence of old classics (such as Axie and StepN) or a new evergreen title.
This is due to the changes in NFT technology. NFTs are the most fertile ground for redevelopment in gaming, as they can be utilized as items, tickets, or collectibles. ERC-6551 (tokens as wallets) and ERC-1155 (multitoken standard) allow development teams to use NFTs higher up the social stack, such as in guilds, teams, or competitive infrastructure. These new standards can provide fewer but more powerful NFTs that can be controlled or managed by multiple wallets or businesses. This creates much clearer management as well as social hierarchies that support online PvP experiences. I believe we will see a small number of games build healthy social layers that are driven through crypto.
#2: Gamification Will Expand Beyond Points and Prizes – We’ve seen a rise in all forms of gamification and rewards (McDonald’s Points, Temu/Ali Express Vouchers, Uber Profile Rewards). Each of these companies sees the value in engagement, and uses points to reward activity. As it is driven by a highly competitive market and customer loyalty, brands trial simple features. Chinese firms more fully embrace points-based rewards, which may be luring younger audiences or increasing spending.
2024 will see some of these larger brands invest in more engagement techniques, possibly around live ops, progression, and/or clan/online PvP, but in very light and casual ways. A truly engaging gamification feature needs to bridge online and offline, and build a simple story that reinforces that brand’s archetype. Brands still view gamification as risky, but we’re seeing it being used more and more because consumers enjoy it. One or two of these large brands can leverage much more engaging and thoughtful experiences, and it should help their bottom line when done properly.
Predictions from our OGRI partners
Special thanks to our Open Gaming Research Initiative partners that shared their 2024 predictions with us and you as well! Here they are.
Moritz Baier-Lentz
Partner & Head of Gaming at Lightspeed | LinkedIn
2024 Will Continue AI’s Far-Reaching Impact on Consumer Media, Including Gaming – As in previous platform shifts — like the introduction of the internet or mobile phone — the most valuable applications will embrace a novel technological paradigm not only in the form of incremental improvements (like helping game developers complete their work faster, better, or cheaper) but instead create previously impossible player experiences: agentic simulations, emergent narratives, or procedural generation of immersive worlds.
This will have significant implications for existing professional game makers, enable an unprecedented number of content creators (through supercharged UGC like prompt-to-game), and possibly even surface a new class of hardware that benefits from on-device foundational models.
About Lightspeed: Lightspeed Venture Partners is a globally leading venture capital firm with over $29B under management and more than 500 investments across the U.S., Europe, and Asia. Over the past two decades, the firm has partnered with hundreds of exceptional entrepreneurs and has helped build and scale companies to achieve 190+ IPOs and acquisitions.
With its dedicated gaming practice, Lightspeed Gaming, the firm invests from an over $6.5B pool of early and growth-stage capital — by far the largest set of funds with a dedicated gaming practice. Lightspeed's team combines deep expertise in gaming interactive technology with a global multistage investment platform and a culture that truly puts founders first. Learn more here.
Justin Sacks
CEO at Nexus | LinkedIn
2024 is the Year for"Creator Driven Publishing" - games where large influencers are critically intertwined with the games development and go-to-market. As with any new spin on publishing, there will be plenty of misses, but I expect those influencers and teams who truly invest for the long term and have quick iterations will find immense success.
About Nexus: Explore implementing a game-changing Support-a-Creator program with Nexus, the leading platform for live service PC, console, and mobile video games, designed for building holistic creator programs.
Through Nexus’s Support-a-Creator API, live service publishers can build world-class creator programs that drive significant growth in conversion, ARPPU, retention, and LTV. Nexus has partnered with leading live service publishers like Capcom, Grinding Gear Games, Hi-Rez Studios and Ninja Kiwi to build out their creator programs by managing creator onboarding, payments, analytics, attribution and so much more. Learn more here.
Shahar Sorek
CMO at Overwolf | LinkedIn
The Evolution of the UGC Modding World Will Drive Parts of the Gaming Landscape to go Through Another Seismic Shift in 2024 - The interoperability of cross-platform mods will continue to thrive this year. We will see a new in-game creator category emerge, with game studios of various sizes crafting their own DLC-level mods for existing major game titles to unleash new revenue streams. In parallel, AAA game studios will continue to unlock the modding door to their biggest titles, standardizing UGC and inviting in-game creators to create the customization that will expand the longevity of their games at scale.
About Overwolf: An all-in-one platform that lets creators build, share, and monetize in-game apps, mods, and private servers. With over 165,000 creators, and 41M monthly active users, Overwolf supports the world’s most popular AAA titles such as League of Legends, Minecraft, World of Warcraft, and 1,500 other games.
For game developers, Overwolf offers CurseForge For Studios. CurseForge For Studios is a white-label solution that lets game makers and publishers easily integrate mods safely and seamlessly into their games, both existing and new, at zero cost. It’s battle-tested by AAA studios and games, including Maxis (The Sims™ 4), Studio Wildcard (ARK), TakeTwo Interactive (KSP), and others. Learn more here.
Ben Cousens
Chief Strategy Officer at ZEBEDEE | LinkedIn
#1: Scaling Would Still be Challenging - UA remains a bloodbath and privacy regulations around user data continue to tighten and become more geographically restricted
#2: Another web3 Busted Flush Would Come to Market - Amidst a new bull run in bitcoin, someone becomes the TerraLUNA/FTX of web3 games, significantly undermining credibility of crypto tokens as in-game currencies once again
#3: Platform Liberalisation Would Still be a Few Years Aways - EU DMA gets overhyped and, while the impact for games studios, payment processors and others is profound, it will take 3-5 years to feed through into the market (e.g. the major challenge of getting iOS users to understand and trust side-loaded apps after 15+ years of App Store for downloads)
About Zebedee: A fintech and payments processor with a plug-and-play API plus SDK, enabling developers to easily integrate instant, borderless low-fee payments into various applications using the Bitcoin Lightning Network. Offering transactions with fees of less than one cent, ZEBEDEE already powers over 4,000 developers across a variety of sectors, including gaming, streaming media, and social media, processing 10,000-plus million transactions monthly. Learn more here.
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Content Worth Conusming
The Lethal Comedy of Zeekerss' Lethal Company (Errant Signal): "Lethal Company is the latest viral internet multiplayer sensation popular among streamers and kids! But also... it's kind of rad?"
Circana is releasing Dec 2023 US video game market results on January 18th (Mat Piscatella): “So, to celebrate, let's look back at 25 years of the best-selling video games! These rankings include 100% of physical, as well as digital for these publishers that provide their digital sales.”
Mobile Gaming: A Freemium Economy (Business Breakdowns): "This is Matt Reustle and today we are breaking down the mobile gaming industry. It was several months ago that I was reading an industry report for our Business Breakdown on Electronic Arts. I was shocked to see that mobile gaming was now 50% of the overall gaming market. What really stood out to me was just how different the business model is. You have smaller game developers operating with a completely different monetization model. It's the same industry but with drastically different strategies."
The Power of Shared Experiences (The CMO Podcast): “Ring in the new year with the CMO Podcast as Jim welcomes Jonathan Knight, the SVP, Head of Games for The New York Times. The Times Games include the famous New York Times Crossword Puzzle, The Mini Crossword, Wordle, Spelling Bee, Connections, and Tiles. Founded in 1851, The New York Times is one of the oldest and most respected brands in the world, with nearly 10 million subscribers.”
Super Evil Megacorp's Kristian Segerstrale (The AIAS Game Maker's Notebook): "Adam Orth chats with CEO of Super Evil Megacorp, Kristian Segerstrale. Together they discuss Kristian's career and how he found himself on the cusp of several emerging platforms; his journey to becoming the CEO of Super Evil Megacorp and what they're doing to transform the studio; his ideas around best practices and methodologies for remote-first game development; and his efforts around climate change and what the games industry can do to become a positive force for change."
