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Online Games Compete with Consoles, Business and Industry Trends Analysis

Game playing on smartphones is creating intense competition to dedicated game consoles.  The incredibly popular iPhone and Android-based phones are fueling the market.  Many of the most popular apps downloaded for use on smartphones are games.  Typically, mobile video games are introduced as “freemium” titles which are free of charge to users but are supported by virtual goods sales relating to the games.
     On the console game front, Microsoft completed the acquisition of ZeniMax Media, the parent company of Doom and Fallout game studio Bethesda Softworks for $7.5 billion in March 2021.  As of early 2022, Microsoft had 23 Xbox games studios, compared to 13 PlayStation game studios for Sony.  In early 2022, Microsoft agreed to acquire game maker Activision Blizzard for nearly $70 billion, subject to approval by the Federal Trade Commission (FTC).  This acquisition is so large, and Microsoft’s financial and technical prowess is so great, that it could alter the marketplace to some extent.  Meanwhile, Amazon has its own videogame development studios, and also offers Lumberyard, a set of tools that outside developers can use to build games for its Amazon Web Services platform.
     Messaging innovator Snap, Inc. is also getting into gaming.  Its Snapchat app now offers multiplayer games such as Bitmoji Party, and additional games from developers such as Zynga, Inc. and ZeptoLab Ltd.
     Cloud gaming is soaring in popularity thanks to the wide adoption of high-speed internet.  Whether advertising-supported or subscription-based, cloud gaming enables users to stream an immense variety of the latest, most popular games.  For 2022, analysts at Newzoo estimated that mobile gaming had a 54% market share, compared to 27% for consoles and 10% for PCs.
Apple, Inc. offers its gaming subscription service called Arcade.  For a few dollars per month, users have access to a wide variety of exclusive, streamed games.  Google offers a video game and app subscription service called Play Pass with hundreds of games and apps.
One of the top game manufacturers, Electronic Arts (EA), acquired mobile gaming company Glu Mobile, Inc. for $2.1 billion in cash in April 2021.  The acquisition includes titles such as Kardashian: Hollywood, Diner Dash and MLB Tap Sports Baseball.  French game developer Ubisoft offers the Uplay+ game streaming service for Windows PCs, and also using Google’s Stadia service.  Facebook offers streaming games on its Facebook Gaming platform free of charge to players.  Titles include Asphalt 9: Legends, PUBG Mobile and Garena Free Fire.  Netflix entered the gaming arena in November 2021 with the release of five mobile games for its members, on both Android and iOS devices.
     The Chinese government has been cracking down on gaming.  Gamers in China were spending significantly more hours per week playing video games than players in other countries (12.4 hours according to Limelight Networks, compared to 7.7 hours in the U.S.) in 2021.  An attempt to launch the blockbuster game Fortnite in China was shut down in late 2021 after a three-year trial, despite the 10 million Chinese players who pre-registered.  China’s President Xi Jinping has established new rules limiting technology companies’ activities which will likely impact gaming companies to a major extent.

SPOTLIGHT:  Fortnite
Fortnite:  Battle Royale is a free-to-play multi-player game from Epic Games, Inc.  It is played on game consoles, PCs, tablets and smartphones and is easy to learn but hard to master, requiring extended play to regularly win.  Fortnite had 350 million registered players as of 2022, originally made up of teenage gamers to a large extent, but the audience has evolved to include a much wider demographic.  Fortnite’s popularity is so powerful that Netflix, Inc. said in early 2019 that it loses viewers to Fortnite more than it does to HBO.  Streaming video platforms such as Ninja and Amazon’s Twitch report that the game attracts more than twice as many viewers as other top games such as PlayerUnknown’s Battlegrounds.  The game is elevating online gaming and eSports into mainstream entertainment.


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