New VARIETY VIP+ Special Report: The State of the Video Game Ind Expand post
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New VARIETY VIP+ Special Report: The State of the Video Game IndustryGlobally, video games form an enormous market. Through traditional access points like console, PC and handhelds, as well as the endless apps one finger touch away on our phones, video gaming has been valued at nearly $200 billion for several years now.
We last broke down that value for our “Level Up” special report in October 2022, and now, one month into 2024, our new 25-page report shows there is still much to behold in gaming — but not without unlocking new difficulty levels.
As positive as 2021 was, the following year saw the global market decrease instead of increase as pandemic restrictions receded in full. 2023 saw a slight improvement in value, but the year was marred by waves of layoffs throughout the industry, with headcounts collectively dropping by around 10,000.
These layoffs have yet to slow down. After reducing its workforce by more than 1,100 roles last year, Unity Technologies announced a further 1,800 job cuts in January, which will see the company shrink as much as 25 percent.
The same month, Amazon confirmed there would be more layoffs at Twitch, while “League of Legends” steward Riot Games announced its own cuts totaling more than 500 later in the month. Later in January, Microsoft announced 1,900 cuts across Activision Blizzard and Xbox, just three months after its $69 billion deal to acquire the former closed. This new round of layoffs comes a year after Microsoft reduced its headcount by 10,000 across the entire company.
Some reductions speak to difficulties in the esports space, which relies heavily on the East for support, where the massive Chinese market has undergone significant restrictions in youth gaming. Tencent, both Riot Games’ parent and the biggest global company in gaming revenue, has been one of the companies heavily affected by such restrictions.
But the intensity of these layoffs is also an inevitable outcome of the M&A craze that has defined recent years. The multibillion-dollar purchases of Bungie and Zynga in 2022 preceded layoffs at, respectively, parent companies Sony Interactive Entertainment and Take-Two Interactive in 2023, with Bungie in particular losing around 100 roles.
It’s not all doom and gloom, though. One of the most promising fronts for games of late is another industry that had a difficult 2023: Hollywood. Amid big reductions in ad spend, similar waves of layoffs and the dual WGA and SAG-AFTRA strikes, two of the year’s biggest hits in film and TV were adapted from gaming IP.
HBO’s “The Last of Us” gave the network and streaming service Max a fresh hit based on the critically acclaimed PlayStation games, while Illumination and Universal’s “The Super Mario Bros. Movie” catapulted the Nintendo icon to superstar status at the box office, its billion-dollar gross nearly matching that of summer sensation “Barbie.”
Even within the core games space, its synergy with Hollywood is as tight as ever. Warner Bros.’ “Hogwarts Legacy,” a game set 100 years before the events of its signature “Harry Potter” film series, closed out 2023 as the No. 1 bestselling game, a title that typically goes to new annual releases for “Call of Duty” each year.
Data dedicated solely to such brands — including Fortnite and Roblox’s massive gaming platforms as well as sector-specific looks at consoles, handhelds, mobile and subscriptions, not to mention leading companies, M&A, layoffs and more on gaming’s advancement in Hollywood — comprise our latest analyses of the space.
And despite last year’s complications, that $200 billion market threshold may still be closer than you think. Read the report to learn why:
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3 people like this
I think it's gonna be hard for video game companies to keep up with demand with those major layoffs, Karen "Kay" Ross. But Hollywood has a lot of movies that would be great as games (and vice versa)....
Expand commentI think it's gonna be hard for video game companies to keep up with demand with those major layoffs, Karen "Kay" Ross. But Hollywood has a lot of movies that would be great as games (and vice versa). I'd like to see a "Mission: Impossible" game, "Halloween" game, "Knives Out" game, "Scream" game, etc.
1 person likes this
After the runaway success of the video game to film (and vice versa) these last few years its going to be fascinating to see how this relationship morphs and builds over the next decade, especially with gamers maturing as the core audience.