State of Play: The Video Game Industry — with Joost van Dreunen

Economic Power

The video game industry has seen a significant shift in economic power from game makers to platform holders like Apple, Sony, and Microsoft. Joost van Dreunen explains that these companies have gained substantial influence due to their ability to control game distribution and access to audiences. This shift is driven by the abundance of cheap capital and the necessity for game makers to reach audiences through these platforms 1.

Most of the money still goes to game publishers, but the market power that's increasing is on the platform side.

--- Joost van Dreunen

This growing dominance of platforms has raised concerns about their impact on labor and competition, as they operate similarly to nation-states, making policy regulation challenging 2.

   

Market Dynamics

Market dynamics in the gaming industry are evolving, with mobile gaming experiencing a slowdown due to increased costs and inefficiencies. Joost van Dreunen notes that while mobile gaming had a significant rise since 2009, recent challenges have led to a decline in momentum 1. Console gaming saw a boost with the release of new hardware during the pandemic, but this has also started to wane as the hardware cycle progresses.

We're entering the second half of that hardware cycle, so that subsides a little bit.

--- Joost van Dreunen

On the PC side, the return to social activities has slightly reduced online engagement, impacting the market's growth potential 2.