Three trends from Pocket Gamer Connects: Video Games Industry Memo - 25/01/2024
Working off the games industry's 2023 hangover one event at a time
Global games industry in mood for maturity at Pocket Gamer Connects London
Palworld guns for controversy after multi-million selling launch
Tekken 8 punches its way to the top of the new releases
Welcome back to another Video Games Industry Memo. Before we get down to business, I wanted to provide a quick update on my nefarious plans for VGIM.
As you likely know, my aim when I started this out was to create a newsletter that explained games in a single engaging read that’s ideal for industry insiders and outsiders alike every week.
Broadly, I think I’ve achieved that. VGIM’s rapid growth in three months from a soft launch subscriber base in the tens of people to over a thousand suggests that I am on the right track.
However, I think I can go further too. I believe I can do more with VGIM to provide fair, interesting and engaging coverage of the world of video games - especially when it comes to producing research intensive pieces like my Saudi Arabia shakedown or the story around extremism and games.
To achieve this, I need to put in place a structure around VGIM that allows me to achieve two goals: to earn the money I need to earn to support its growth and to do all of this without compromising my promise to keep the Thursday newsletter free.
That’s why I’m planning on rolling out two ways for me to generate an income from VGIM to support its growth from Q2 2024 onwards.
The first will be the chance for businesses to unobtrusively sponsor editions of VGIM, through the inclusion of their logo below the opening bullet points of each email and a sponsor message between the news and events section in each newsletter they support. Sponsors will have no control over the editorial output of VGIM to ensure that it continues to serve readers first.
Second, I will be introducing a new VGIM Plus paid subscription for the newsletter. VGIM Plus subscribers will receive additional content each month in the form of an extra deep dive and an “Ask VGIM” newsletter, as well as access to other exclusive benefits as VGIM continues to evolve.
Crucially, and just to repeat the point in case you scanned this bit too quickly, the Thursday edition of VGIM will always remain free to read to ensure that anyone can enjoy peeking through this window into the world of games.
I intend to finalise my plans for the next phase of VGIM by the middle of February, after which I’ll provide full details about sponsorship opportunities to interested parties and a timeline to launch for VGIM Plus.
But if you would like to chat to me about sponsorship opportunities now, or flag that you’d be interested in a chat about what you’d like to see in VGIM Plus, email me at videogamesindustrymemo@substack.com and I’ll be happy to have a catch up.
And with that out of the way, let’s get on with the newsletter.
The big read - Three trends from Pocket Gamer Connects
The first major games business conference of the year took place earlier this week, ending the sector’s slumber with a networking bang.
Mobile games get together Pocket Gamer Connects (PGC) celebrated its 10th birthday at the appropriately named The Brewery in Central London - bringing together thousands of industry reps for business meetings, panel talks and much needed gossip.
PGC has long been an excellent way to kick off the year, especially for anyone looking to practice pitches and warm up their networking skills after the festive break.
But with the industry in somewhat of an odd place, this year’s conference was also a good opportunity to see what the sector is thinking as we wade deeper into 2024.
And to help you get into their heads, I’ve picked out three trends that I spotted during conservations at the show (and on stage) to ease you in.
Away we go!
Trend 1 - The Hangover: Part 2023
The atmosphere at PGC London was mostly what I’ve come to expect from a games industry business conference: optimistic, energetic and friendly. But the sector’s generally sunny disposition was clearly affected by the lingering hangover from 2023.
I moderated a panel on the morning of the first day of the show about whether 2024 would prove to be a renaissance for the games industry. The panellists, enjoyably, rejected the premise of the question - suggesting that this year would be more about industry reconfiguration and reconstruction than a moment of rebirth for the sector.
Part of this answer came from an acceptance from those that I spoke to that the maturity of games means that the sector’s fortunes move more slowly. As the industry has grown in size, it naturally can’t move as nimbly as it once did and therefore can’t recover from a challenging time quite so rapidly.
But the central reason why my panel guests dissented against the title of the session is that many of the wider challenges that afflicted games in 2023 remain with us.
The macroeconomic issues that gave games a kicking last year, such as the impact of inflation on development costs and increasing interest rates weakening investor impetus to pump money into games, are lingering on.
And with the industry still coming down off the very last of the investment community’s pandemic sugar high towards games, further layoffs and closures remain the likely price of industry over-exuberance in 2021 and 2022.
The result of these industry wide pressures naturally, and unfortunately, has been individual hardship. Across the event, I heard a range of stories from those who had been personally hit by the problems engulfing the industry.
There was the person who went through a layoff, earned themselves a dream job months later and saw it get cruelly removed just before they started when what was meant to be their new employer embarked on their own round of reductions.
I had a chat with another person who saw their layoff coming steadily over the horizon, watching colleagues in other teams who were there to support the project they were working on get axed over the course of 2023.
And amongst business leaders, I heard a number of stories of scrambles for survivals as a result of contracts unexpectedly falling through, budgets being ripped up and investors walking away from deals in last year’s tough economic climes.
The outcome of all of this is a fragmented and fractured industry that is also paradoxically serving more players (and continuing to steadily generate more revenue) than ever.
This does present opportunities for businesses who can pick up the slack. Consultants, contractors, external developers and agencies flexible enough to pick up projects may be able to benefit from the fragmentation.
There’s also a reasonable chance that hiring opportunities do re-open towards the end of the year, especially in businesses that may have mistakenly cut too deeply in the belief that technology (coughs AI coughs) could effectively replace talent in their business.
But for most companies and individuals, the mission for 2024 as summarised by Susan Cummings over on LinkedIn appears to be “survive to ‘25” - a less optimistic view of the industry than I advanced in these pages earlier this year.
Trend 2 - Blurring boundaries
If the main challenge facing companies is how they’re going to survive, the next obvious question is how they think they might do it.
And the answer for many businesses appeared to be to blur both the boundaries between game platforms and the relationship between players and developers in an effort to unlock growth.
In regards to platforms first, I caught the tail-end of a presentation from Tom Wijman of Newzoo which showed that a record 15 out of the top 100 grossing games in the world last year were true cross-platform titles playable across all the major platforms.
To an industry outsider, this might seem surprisingly low. Practically every other form of media that we consume via digital platforms - TV shows, films, books and music - are easy to access across a range of devices with minimum fuss. It feels unintuitive that games are behind the curve on this somehow, especially given their reputation for innovation.
However, making games work across platforms has been historically hard. PC, console and mobile players were mostly fenced off from one another because each device had significantly different technical limits and input methods. While developers may have wanted to create one unified experience, building one would both create a “lowest common denominator” experience that would annoy some players and was hard to do without modern digital infrastructure.
But the world of games has changed. While games hardware does still differ from platform to platform, the technological “floor” of the industry has been raised. For example, PC hardware may still offer the most technologically impressive experience for players but consoles and smartphones now run high-end games well enough to make it possible to bring players together across a range of devices.
Marry these hardware advances to the emergence of the digital infrastructure necessary to connect a new generation of players - many of whom are happy to trade console wars for playing games in the context they want - and we finally have the conditions for developers to expand games across platforms more easily than ever: opening up opportunity in the market.
Beyond the conversations about the blurring between games platforms, there was extensive talk about how developers are benefitting from blurring the boundaries between themselves and their players.
On the panel I moderated about the industry’s possible renaissance, this point was first made in regards to the way that evolving habits within social media are changing the way our games are made and sold.
Eric Goldberg of Playable Worlds identified this particularly in regards to TikTok. While the platform itself relies on games content to provide trillions of minutes of entertainment to its audience, games developers are aware that it has two important strategic impacts on them: it swallows up play time - making it a possible rival - but it also acts as a potentially essential engine for discovery of new games such as last year’s viral hit Lethal Company.
This is leading developers and publishers to evolve their influencer strategies to prioritise TikTok over other platforms (including, interestingly, Twitch), while also encouraging them to keep an eye on whether they think their game may create the kind of shareable moments that could lead to viral pick-up on the platform.
This blurring of the boundaries between players and developers was most typified, however, by the enormous range of discussions I had about the growth of user generated content (UGC) platforms within the sector.
The serious strides made by Roblox and Fortnite Creative - notably both cross platform experiences - in the past year was predicted to be a source of major value creation for the creators of those platforms: something that was evidenced indirectly the week before by the announcement of a $110m Series D for Edinburgh based UGC business Build a Rocket Boy.
But the value in those platforms isn’t predicated on those businesses making that cash themselves; it’s based on the possibility that they are set to unleash the next wave of democratisation of development and distribution within the sector. And we have already started to see the impact of these platforms on the market.
Roblox experiences such as Adopt Me! have generated revenues big enough to turn a hobbyist business into a thriving international concern. Agencies like Karta are expanding rapidly to transform enormous demand from brands for UGC experiences into entertaining games that players may actually like. Investors are putting sensible cash behind “UGC first” start-up games businesses on the basis that they believe it could be the next major frontier for the industry. Oh, and that viral PC game hit Lethal Company? Take a guess where the creator of it cut his teeth.
The blurring of the barriers between games businesses and players will present challenges, of course. But for those wondering what the next era of the industry looks like, it will likely come from the businesses who give players even greater agency to shape and create the games they love.
Trend 3 - We fought the law and the law won
I was catching up with one of my contacts at PGC and during our chat they said that they’d “never heard as much talk about regulation at a games conference.”
And they were definitely right. I’ve been to plenty of these events over the past decade or so and this was the first one where what was happening at a law and policy level was being discussed amongst the industry grassroots.
So why the shift now? We all know that law and policy does have a major impact on the way games are made. We also know that it has been the subject of fervent discussion in previous years, such as the great last minute panic over GDPR compliance in 2018.
But for the most part, conversations about law and policy at games conferences were either broadly after the fact (comply with this or die) or almost solely of interest to the law and policy wonks that game developers have broadly tried to ignore when they can.
This year was different. The impact of regulation was clearly embedded in the industry’s thinking this year because the impact of regulation appears to be more directly advantageous - or mission critical - to a broader spectrum of video games businesses.
Changes in competition was one of the consistently discussed potential positive changes for the sector, with companies trying to work out whether regulatory and legal efforts to open up the app stores would lead to meaningful benefits for developers (or spark another round of stonewalling from storefronts determined to keep their cut).
Importantly, the risks associated with policy changes were also being discussed openly too.
I caught the end of a panel on the Digital Policy Decoded track - itself a new addition to the conference agenda this year - that was ostensibly about mobile advertising and the challenges facing user acquisition.
But by the time I was in the room, it had shifted almost entirely into a discussion about age appropriate design and incoming online safety rules - such as the EU’s Digital Service Act and the UK’s Online Safety Act - in which the panellists were providing measured, but ominous warnings, about non-compliance to the audience.
And while these warnings are still coming relatively late in the day, the tone of the conversations around regulation at the show were less about minimum viable compliance like it was in the days of the GDPR rush and more about what responsible games businesses need to do to thrive in the modern age.
The evolution of the industry into a major centre piece of the digital economy has inevitably attracted attention from regulators across the world.
And the evidence from the past week is that the industry increasingly is aware of this and is hungry for more accurate information to help them keep ahead of the challenges coming down the track.
Maturing Content
I left PGC with a sense that 2024 will be a year of transition and change for the sector. In part, the blurring of the boundaries between platforms and players is likely to continue to shift the way we think about games and the way the sector makes money.
But beyond that, it felt like the challenges of 2023 (and the incoming regulatory issues of 2024) has forced the industry to think harder about what it wants to be for both the people who work within it and those who enjoy its games.
It was a welcome feeling. I’ve always loved the games industry and felt the culture within the sector has been often completely misread by the outside world.
But I’ve also, unfortunately, also felt that the games industry has sometimes been so insular and self-contained that it hasn’t realised that it truly means something to the world at large.
The penny, it seems, is starting to drop. And if this maturity continues to show itself over the course of this year, we may emerge with an industry with a much healthier long term culture for years to come.
News in brief
New Palworld Order: Palworld has sold over 7 million copies in five days, despite it facing accusations of directly copying Pokemon games. The case in favour of Palworld is that it plays like a survival game rather than a mainline Pokemon title. The case against it is the dispiriting similarity between some of Palworld’s pal designs and those used by some familiar pocket monsters…
Tanks for the memories: A Ukrainian tank gunner has said that playing video games helped him to disable a Russian tank during a recent battle. Someone should probably tell the British Army this so they don’t blunder into commissioning a controversial Fortnite experience again.
Some good Newzoo?: Newzoo has predicted that the global games market will creep up to $189bn in 2024 in a “sober” year for the industry. It also forecasts that Nintendo will launch a new Switch, Xbox will launch an Android games market and we won’t all lose our jobs to generative AI (well, not yet anyway).
I predict a Riot: Speaking of job losses, Riot has joined the games industry bloodbath by laying off 11% of its workforce (530 people) and shutting down its publishing arm Riot Forge. This takes the total for lay-offs this year towards - if not beyond - the 3500 mark.
Blink and miss them: The draft of China’s controversial rules to limit spending on in-game purchases in the territory has been removed from the state censor’s website, according to Reuters. While its removal can be explained in part by the consultation on the rules closing earlier this week, the move to take the page down is also described as unusual and suggests a change in approach may be coming.
On the move
Diana Yeghikyan is hunting for a new 2D artist position…Ash Ligouri is searching for a mid-senior marketing role or an associate level production role (and will consider remote roles)…Denzel Dome is seeking a new freelance writing or producer opportunity…Jupiter Hadley is looking for freelance roles to supplement her games journalism and community management positions…And Ollie Ring is offering his VGIM approved esports expertise on a consulting basis…
Jobs, jobs, jobs
The BBC is looking for a Global Director, Gaming & Interactive…Google Deepmind wants a Games Systems Engineer on a 12 month contract…If fantasy football is your thing, The Premier League is hiring an Associate Producer (Gaming)...Roblox is recruiting for a Senior Product Manager (Communities) in London…and The Science Museum wants an Arcade/Gaming Technician to help with the upkeep of its Power Up exhibition…
Events and conferences
DICE Summit, Las Vegas- 13th-15th February
Guildford Games Festival, Guildford - 16th February
Game Developers Conference, San Francisco - 18th - 22nd March
London Games Festival, London - 9th-25th April
London Developer Conference, London - 11th April
Games of the week
Tekken 8 - Punch and kick people in THEIR STUPID FACES in the eighth installment of the fighting game series.
Apollo Justice: Ace Attorney Trilogy - Investigate crimes, defend clients and ignore the blatant conflict of interest thi entails in this three-part re-release.
Like A Dragon: Infinite Wealth - Yakuza heads to Hawaii in the latest entry of the mini-game laden role playing series.
Before you go…
Arsenal striker Gabriel Jesus has been banned from playing Counter Strike 2 after his account was slapped with a Valve Anti-Cheat notice.
Given how bad he is at hitting the target in real life, VGIM assumes that he was banned for using an aimbot.