What are the big things going on these days in the gaming space? That was the subject of a SXSW 2022 talk called “All About Games. Data, Trends, and What’s Next.” The talk was delivered by Joost van Dreunen, who is a writer, academic, and entrepreneur, and it touched on everything from the metaverse to recent workplace scandals to the role gaming has played in the war in Ukraine.
“It was always this weird, anti-social… Cheeto-dust-covered behavior that people would do in the basement of their parents’ houses, it was this weird demographic that did this,” van Dreunen said, “but since then, games have gone mainstream.”
Gaming, van Dreunen said during the talk, has come a long way from how it was seen not long ago. It’s now, in fact, a $219 billion industry. And a big change is that services are now a much larger part of the picture than was previously the case. The market is now dominated by content holders, like Apple and Google, in addition to console manufacturers like Microsoft and Sony.
The industry is now largely dominated by subscription services that bring in recurring revenue. These include PlayStation Plus (46 million subscribers), Switch Online (25 million), Xbox Game Pass (23 million), EA Play (13 million), and Apple Arcade (12 million.)
Already, the early days of 2022, he pointed out, have featured a trio of major acquisitions in the gaming space — Microsoft’s purchase of Activision, Take-Two’s purchase of Zynga, and Sony’s purchase of Bungie. And that’s to say nothing of The New York Times’s acquisition of Wordle which, he said, should be considered gaming.
“Within a single swoop, we saw more transitions, in terms of value, than we had seen the entire previous year,” van Dreunen said at the talk.
There have also been, he said, mistakes to avoid, including overpromising and underdelivering, which was what CD Projekt Red did with last year’s Cyberpunk 2077 game, which was both delayed and arrived full of bugs. The industry must also, he said, learn from workplace issues such as the sexual harassment and unfair labor practice scandals at Activision Blizzard.
The industry must also contend, he said, with antitrust concerns, with antitrust hawk Lina Khan now in place as chairwoman of the Federal Trade Commission. While praising Khan’s legal writing, van Dreunen cited The Wrath of Khan, making a Star Trek pun, and noted that since the FTC is specifically looking at Big Tech, the Microsoft/Activision deal could get those two companies “on the wrong side of the law.”
Another major trend, he said, has been the exposition of the popularity of adaptations of video games by the entertainment industry. Not only has this happened with movies, such as the recent hit movie version of Uncharted, but the major content spends by streaming services have also led to hit TV versions of games, like The Witcher on Netflix. Similarly, Halo has been eyed for an adaptation for more than a decade, and one will finally arrive next month on Paramount+.
Van Dreunen also touched on the surprising role gaming has taken in the Russia/Ukraine conflict. Following Russia’s invasion of Ukraine, the Ukrainian deputy prime minister wrote a letter calling for all major gaming companies to de-active game accounts in Russia and its allied nation of Belarus.
“Suddenly the games industry plays a role in this geopolitical conflict,” he said.
And like most things at SXSW this year, the talk dealt with the metaverse as well, including some shots at Meta’s recent moves into the space. Van Dreunen introduced the topic by showing a humorous mural of Mark Zuckerberg.
“No midlife crisis is complete without unnecessarily rebranding something that was totally fine,” he joked. “It’s the idea, of course, that you would do something so bold because that’s what makes it real, that’s true innovation, taking a page out of a whole new book, and just going off the rails… We’ll see. I have some skepticism about it, obviously, but this is the kind of energy that drives a lot of what’s going on in games.”
Former Nintendo executive Reggie Fils-Aime, in his keynote at SXSW 2022, had similarly expressed skepticism about Facebook’s metaverse plans.
Van Dreunen also noted, as he did in a recent Substack post, that the metaverse in its early days and is almost entirely controlled by male investors, even more than the traditional gaming industry. Most of these are major financial firms like Vanguard, Blackrock, SSgA, Fidelity, and T-Rowe Price.
Van Dreunen covered a surprising amount of relevant ground in regards to the gaming industry and gaming trends, a sign of just how much the sector is making its way into everything.