What is the global game market declines for the first time in seven years?


According to a "2022 Mobile Game Market Outlook" report recently released by game industry analysis agency Sensor Tower, the global mobile game market revenue in 2022 may reach US$86 billion, a year-on-year decline of 2.3%.


  This is not the first report to predict a decline in the global gaming market. In July, data from market research firm Ampere Analysis showed that the gaming market is expected to experience its first decline this year after seven years of continuous growth, with global video game sales expected to drop 1.2% to 1,880 in 2022. One hundred million U.S. dollars.


  The "2022 Mid-Year Global Mobile Game Market Report" recently released by OpenMediation also shows that global game manufacturers will decrease by 1/5 in 2022, and the game market will show a significant shrinkage, of which the waist and tail games will have the greatest impact.


  In addition, the financial report shows that global game manufacturers such as Sony and Tencent are facing the challenge of declining game business this year. However, these big manufacturers are still “buying, buying and buying” in the global game market and have not stopped their expansion.


  Under such circumstances, there are still some optimistic expectations, such as the industry's expectation that the game market will return to a growth trajectory in 2023.


  Both supply and consumption decrease


  "The epidemic has caused everyone to stay at home, so the growth that should have occurred in 2022 was realized ahead of time." Zhao Yijiang, head of business development in mainland China, Google Play believes that benefiting from the stay-at-home dividend brought about by the epidemic, the game industry will grow in 2020 and 2021. Rapid growth, based on this high base, will show a trend of sluggish growth in 2022.


  Ampere analysis shows that video game sales have been growing since at least 2015. After 7 years of continuous growth, the game market will experience its first decline in 2022, a decrease of $3 billion from 2021 to $188 billion.


  In the two years from 2019 to 2021, the size of the gaming industry has grown by 26% to a record $191 billion.

Sensor Tower's report shows that after reaching an all-time high of $22.6 billion in the first quarter of 2021, mobile game revenue in the Apple App Store and Google Play Store fell by about 6% to $21.2 billion in Q1 this year. However, this The data is still almost 20% higher than in Q1 2020. In the second quarter of this year, App Store and Google Play mobile game revenue was about $20.1 billion, down 6.9% from the same period last year.


  Deng Hui, vice president of the game industry of Google China's major customer department, said that if it is compared with last year, this year's annual growth will indeed have some challenges, but if it is compared from 2019, the growth of the entire overseas game has nearly doubled.


  In addition, from last year to this year, the game market released relatively few major works, "the supply side has become more cautious."


  Zhao Yijiang observed that on the mobile supply side, global developers have fewer major or successful product releases than last year. "This reflects that in the face of more intense market competition, the cycle for everyone to launch new products is longer."


  According to OpenMediation’s report, the number of global games in the first half of 2022 decreased by nearly 3,000 compared to the same period last year, most of which were waist-and-tail games, and the number of game developers decreased by 909. Funds to maintain the impact of the epidemic, it is difficult to survive.


  Zhao Yijiang said that in some countries, some products, whether in trial operation or after the official release, did not achieve the expected results, which would push back the later market release time, resulting in a delay in the overall progress. A lot of companies are also merging some projects, stopping some projects that don't look or have early test data as well.


  "When the supply side launches content more cautiously, the industry seems to be declining compared to previous years, especially after two years of relatively high growth." Zhao Yijiang said.


  On the demand side, a game company CEO believes that some big R players (players with more consumption) are obviously affected by the economic decline. A large part of the big R group is small and medium-sized enterprises. The epidemic affects both himself and his place. 's enterprise. Small and medium-sized R players will have less impact, but the game itself is an optional consumption. When basic living needs become a problem, there may be problems in the consumption in the game.


  The domestic game market experienced a "double drop" in revenue and user scale in the first half of the year, and Gamma data also analyzed the factors that reduce the willingness to spend in the report.


  Gamma data shows that in the first half of 2021, the actual sales revenue of the domestic game market was 147.789 billion yuan, a year-on-year decrease of 1.8%, the first year-on-year decline in recent years; the number of game users fell by 0.13% year-on-year to 666 million people.


  Gamma analysis believes that the decline is mainly due to the decrease in user income during the epidemic, the decrease in willingness to spend, and the continuous increase in operating costs of game companies. From January to May 2022, the total retail sales of consumer goods in my country will decrease by 1.5% year-on-year. The public's entertainment consumption and even game spending have also decreased. Although the game time of players has not been significantly shortened, the payment rate and ARPU have decreased.


  The performance of global game companies is also declining. Sony Group announced its overall results for the first quarter of fiscal 2022 in August, showing that its game and network services business (G&NS) had sales revenue of 604.1 billion yen and operating profit of 52.8 billion yen in the first quarter, both down from last year.


  According to Sony's financial report, the decline was mainly due to the decline in sales of non-first-party games and first-party games including additional content, as well as the increase in the cost of existing game software development. In response, Sony lowered its fiscal 2022 revenue forecast for its gaming and network services division.


  In addition, Tencent's latest financial report for the second quarter of 2022 showed that online game revenue in this quarter was 42.5 billion yuan, a year-on-year decrease of 1.2%. With the full lifting of the global epidemic, overseas games and local games have entered negative growth. The local game industry is facing transitional challenges such as consumption contraction, reduction in the number of large-scale game releases, and protection of minors. Under the background of stable prevention and control, there is pressure to slow down.


  Data decline does not affect investment enthusiasm


  Despite the emergence of Waterloo in 2022, the industry is still optimistic about the growth of the game market next year, and many big manufacturers are still increasing their investment in game IP.


  In the opinion of a game practitioner, the current decline data of the industry is only a narrow fluctuation. He told China Business News, "This fluctuation is related to the lack of supply of big IP games last year and this year, and there is not a huge drop in the data. Pretty normal range.”


  The above-mentioned game practitioners said that the global game industry cannot be called decadence, after all, the developers of console games are still increasing their investment. "Since last year, Sony and Microsoft have been frantically acquiring game studios, because the core competitiveness of the content industry is exclusive content, and this investment has both defensive and offensive meanings."


  At the beginning of this year, Microsoft announced that it would acquire Activision Blizzard (ATVI), the world's largest game developer and publisher, for a sky-high price of $68.7 billion (approximately RMB 436.4 billion).


  Microsoft's huge acquisition of Activision Blizzard is actually a bellwether, an industry insider said to Yicai, "Large companies like Microsoft must have done a lot of research before investing, considering financial security and other aspects, so international Shangda’s mergers and acquisitions and investments give everyone a clear point that this industry can develop, and with the arrival of times such as the Metaverse, it may be the most profitable place in the future.”


  In addition to Microsoft, despite the pressure of business decline, Tencent and Sony are also investing more globally to cooperate with game developers.


  At the end of August, Tencent's company and Sony jointly invested in From Software, the developer of "Ayrden's Circle" from Japan, becoming the second and third largest shareholders. Just a week later, Tencent invested in Ubisoft, a veteran French game maker, to continue expanding its presence in the overseas game market. Liu Chiping, president of Tencent, said that he is looking forward to bringing more Ubisoft 3A-level products into the mobile field.


  It is generally believed in the industry that Tencent hopes to obtain more IP resources to develop its mobile game products. Tencent has already invested in game giants such as Riot Games and EPIC overseas, but in the past year, it has also accelerated its investment and acquisition of overseas game manufacturers.


  Dutch market research firm Newzoo predicts that there will be about 3.2 billion gamers worldwide in 2022, which will increase to 3.5 billion in 2025, and the game market will reach $225.7 billion.


  Newzoo analyst Rhys Elliott said gaming used to be recession-resistant, and platforms like Nintendo's Wii grew rapidly during the 2007-2009 downturn. For the vast majority of consumers, gaming is clearly more cost-effective than other forms of entertainment, such as watching movies. Today, with more than 3.2 billion gamers worldwide, gaming participation and consumer spending will continue to grow even as the economy begins to decline.


  Sensor Tower expects that the global mobile game market revenue will return to a growth trajectory in 2023, rising to $117 billion by 2026, with a compound annual growth rate of about 5.6% in the next few years.

"In the long run, the game industry is still a potential market." Deng Hui believes that users' demand for entertainment has always existed, and many innovations in games now allow players to have more consumption choices in the market. With the emergence of new hardware and interactive forms such as the metaverse and VR/AR, the game field is still very imaginative in the future.


  Specific to the regional gaming market, emerging markets such as Latin America, Asia Pacific, and the Middle East and Africa are growing rapidly and will be the main force for growth in 2022 and beyond. In these regions, better mobile internet infrastructure, affordable mobile internet prices, and a growing middle class are all drivers of player growth.


  When referring to his advice to developers, Zhao Yijiang also expressed his optimism about emerging markets, "From the perspective of market revenue, Europe and the United States, including Japan and South Korea, are a big market that everyone must enter. But at the same time, companies like Latin America, In the Middle East, in fact, the revenue share and growth rate of Chinese manufacturers in it are also quite good.


  However, Zhao Yijiang said that each market still needs to be focused on the characteristics of game manufacturers' own products. As a whole, the Latin American market has relatively high interest in competitive games. Shooting games such as "Free Fire" are very popular with local audiences. Manufacturers should take advantage of their own advantages. Select the corresponding regional market.

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