Set to be a "lean year" for games companies, data firm predicts, plus generative AI "won't significantly impact game production at scale in 2024"
The global games market is expected to generate $189.3 billion in 2024, Newzoo estimated in its latest report.
Exploring upcoming trends, the data firm indicated that the market recovered last year and will slowly grow in 2024 and beyond. The compound annual growth rate from 2021 through 2026 was estimated at 1.3%.
Newzoo said the market generated an estimated $184 billion in 2023, a small 0.6% increase over 2022, which itself was down 5% year-on-year. The data firm added it was "optimistic' for the PC and console segments, while mobile gaming is "likely to recover" after difficult conditions for the past couple of years.
"One of the main growth drivers this year will be the ever-growing install base of the Xbox Series and PlayStation 5 generation. Even though this year's release catalogue is expected to be less impressive than 2023's absolutely packed schedule of much anticipated hits, live-service games and back catalogue sales will drive growth in the segment."
However, Newzoo predicted a "lean year," with titles launching in a "highly competitive market."
"Live-service games bank on players sticking with them for longer, leaving less room for new projects to succeed, especially as players leave for premium titles and concentrate on playing fewer games," the report read.
It continued: "Having come down quickly from the engagement and spending booms in 2020 and 2021 — facing corrections in a post-COVID world and increasing interest rates — the industry is restructuring. The cash and investments that flooded the market during the pandemic have dried up considerably, and funding massive new projects is no longer a top priority.
"Games companies will employ risk reduction strategies like avoiding new IPs. Instead, they'll focus on sequels and leveraging existing IPs. Companies will also continue exploring small-experience AAA titles like Assassin’s Creed Mirage and Marvel’s Spider-Man: Miles Morales."
Newzoo also predicted adoption of multi-game subscriptions to slow down, a new Nintendo console with a 3D Mario game, and for Xbox to launch a mobile store on Android. It also anticipated generative AI to grow, but not significantly impact games this year.
"Amidst all the controversy, many studios are already using AI tools. The use of generative AI tools will continue to ramp up to improve efficiencies in the coming years. However, the technology won't significantly impact game production at scale in 2024. AI may be advancing at unprecedented speeds, but in 2024, most use cases will be selective and already proven."
Newzoo had initially predicted the global games market to reach $187.7 billion in 2023, but it lowered its forecast to $184 billion in November.
