Weekly Gaming Reports Recap: February 5 - February 9 (2024)
A monumental study from Griffin Gaming Partners & Rendered.VC about game development trends in 2023; Drake Star Partners covered 2023 gaming investments; Lurkit highlighted top-500 games in streaming.
Reports of this week:
Game sales Round-up (17.01.2024 - 06.02.2024)
Lurkit: Top 500 games in streaming in 2023
Griffin Gaming Partners & Rendered.VC - Game Development Trends in 2023
Drake Star Partners: Gaming Investments in 2023
GSD & GfK: Game Sales dropped in January 2024 in the UK
Game sales Round-up (17.01.2024 - 06.02.2024)
19 million people played Palworld within 13 days of release. 12 million bought the game on Steam; 7 million are Xbox owners. Console sales are difficult to calculate because the game was distributed for free on Xbox Game Pass. The game became the largest launch in Microsoft's subscription service by a third-party developer.
Street Fighter 6 surpassed the mark of 3 million copies sold within 7 months of release. It took 3 days to reach the first million. The total series sales are over 52 million copies.
Video Game Chronicle reports that sales of Mario + Rabbids: Sparks of Hope are at 3 million copies. Earlier, there were talks that the game hadn’t met sales expectations. Ubisoft stated that the game was rushed to release.
Mobile game Whiteout Survival earned over $400 million in 11 months. 33% of revenue is from the US; 20% is from South Korea.
Lethal Company likely surpassed 10 million copies sold. The solo developer earned $113.9 million before deductions and taxes. There is now one more millionaire in the world.
eFootball by Konami has been downloaded over 700 million times.
The Grand Theft Auto trilogy on Netflix for mobile devices has been downloaded over 22 million times. GTA: San Andreas - 13.6 million downloads; GTA Vice City - 4.6 million; GTA III - 3.7 million. Netflix is very satisfied with the achievement and stated that this launch brought them subscribers specifically for games for the first time. The company will monitor their behavior.
Enshrouded was bought over a million times within 4 days of release. It's another Survival project with crafting. The game had 160 thousand concurrent players in the first weekend.
Sales of Ubisoft's latest games have appeared online. Rumors suggest Prince of Persia: The Lost Crown - 300 thousand players ($15 million revenue); Avatar: Frontiers of Pandora - 1.9 million players ($133 million revenue); Assassin’s Creed Mirage - 5 million players ($250 million revenue). This is a leakage, so it should be approached skeptically.
World of Tanks has earned over $7 billion. Over 350 million people have registered in the game over time. Chris Chang, franchise director, shared this on his LinkedIn profile.
Resident Evil 4: Remake reached 6.48 million copies sold by the end of 2023. It's the best-selling game in the series' history.
Farming Simulator 22 calmly reached its 6 million copies sold. Cool.
SEGA officially announced that Like a Dragon: Infinite Wealth sold 1 million copies in the first week of release. This is a record for the series.
Satisfactory sold 5.5 million copies in 5 years of "early access." Developers promise to release the full version this year.
Honkai: Star Rail has reached 100 million downloads. In honor of this, the developers even announced support for Apple Vision Pro. By the way, the game has been updated to version 2.0.
Lurkit: Top 500 games in streaming in 2023
Data is presented based on Twitch, as the primary gaming streaming platform in the world.
Grand Theft Auto V (1.324 billion hours watched) and League of Legends (1.312 billion hours watched) - the leaders of the streaming market in 2023.
In the top 10 by hours watched, there isn't a single game younger than 2020; the newest is Valorant unless considering CS2 as a 2023 release.
Diablo IV, among all games released in 2023, has the highest number of hours watched by people. The game occupies the 13th position.
Considering the entire top 500 on Twitch, the top 10 games account for 48.4% of all hours watched. Looking at the top 50, they collectively account for 77.3% of all hours watched. This means that games ranked from 51 to 500 collectively receive only 22.7% of viewer attention.
On average, the top 10 games on Twitch have 81,697 viewers, while the entire top 500 have 3,788. That's a stark difference.
Griffin Gaming Partners & Rendered.VC - Game Development Trends in 2023
537 studios from different countries participated in the survey. Businesses of various sizes were surveyed; among the respondents were management, developers, analysts, and professionals from other fields.
40% of respondents develop games on Unreal Engine; 36% on Unity; 19% on their own engine. 70% develop games for PC; 56% for consoles and mobile devices; 48% for web platforms.
General trends
77% of studios reported that development costs continue to rise.
According to developers' perceptions, costs for programmers, game designers, QA, and testing are increasing the most.
65% of developers are working on projects that will receive regular updates after release. 30% are considering this.
88% of studios actively consider new technologies to improve their workflow.
Development Trends
Development costs are rising due to increasing complexity and demands of games. 74% of artists are confident that the production of 3D art is becoming more expensive. Additionally, there are numerous issues related to file management, libraries, and collaborative work.
79% of developers face long build times - over 10 minutes. This slows down all processes within the team. Teams would like to see a faster and more iterative process.
Testing is becoming increasingly difficult, especially noticeable in large projects and games with complex operations.
32% of teams encounter problems working with analytics. The issue is not just collecting data but working with it - gathering useful numbers and interpreting them correctly is challenging.
Most teams have significant budget planning issues. 44% of studios increased their initial budget by 20-40%. 25% increased it by 40-60%. 16% of studios had to increase the budget by 60-80%. For 13% of teams, the increase is minor - by 10-20%. And only 2% saw budget growth of less than 10%.
One of the sources of budget problems is incorrect deadlines. In the case of programmers, only 12% deliver tasks on time; among game designers, it's 15%.
The problem of technical legacy is most common in large studios. Over 55% of large companies suffer from it.
Product Processes
56% of producers would like to release game updates on a weekly or biweekly basis.
68% of producers believe their product pipelines are not suitable for service games. The problem is that developing a game and supporting it are two different development approaches.
For leaders in service games, updates are released almost daily (compared to 1-2 times a week on average in the market); planning accuracy is above 75% (compared to 3% on average in the market); significant errors are below 5% (compared to 61% on average in the market).
Bugs or technical unavailability of the game affect audience and revenue. For half of large companies, technical problems lead to a revenue decrease of 5% or more. For 14% of studios, user churn increases by more than 10%.
Tech Development Trends
65% of studios plan to use more off-the-shelf solutions rather than building their own.
However, the trend is unclear as there is no comparison with previous years.
One of the main tasks of studios at the moment is standardizing the technical stack and reducing time-to-market. In addition, large companies express interest in quality technical support and support for old products. Among the main reasons for creating custom solutions are the lack of functionality in market solutions, risks of vendor dependence, and price.
94% of studios plan to increase their use of cloud infrastructure.
52% of artists believe that within 2 years AI will be able to produce the same result as the average artist can now.
Drake Star Partners: Gaming Investments in 2023
2023 Results
The total deal value in 2023 amounted to $86 billion. However, if we exclude the Activision-Blizzard acquisition, the deal size amounted to $20 billion - similar to pre-pandemic times.
In 2023, there were 163 merger and acquisition deals with a total value of $10.5 billion. The leader was Savvy Games Group with a deal with Scopely ($4.9B). Also notable were deals between the Goldman Sachs consortium and Kahoot ($1.7B); Tencent and Techland ($1.6B).
There were 44 M&A deals for PC/consoles; 37 for mobile; and 25 for platforms. Business activity, overall, returned to pre-COVID levels.
In terms of VC investments, over 750 deals were made totaling $3.5 billion. In 2020, there were similar deals totaling $3.4 billion, excluding the Epic Games round. Most investments were in mobile companies (168), followed by blockchain companies (159) and platforms (143). Among the most notable transactions were VSPO ($265 million), Candivore ($100 million), and Second Dinner ($100 million).
Bitkraft, a16z, Play Ventures, and Griffin Gaming were the most active VC funds in gaming deals.
Q4 2023 Results
There were 43 announced M&A deals in the fourth quarter. There were 33 in the previous quarter. The most notable deals were between Aonic and nDreams; Keywords and The Multiplayer Group; MTG and Snowprint; Devolver Digital and System Era.
In the fourth quarter, there were 162 VC deals, at pre-COVID levels. The most notable were at Animoca Brands ($50 million), Leonardo.AI ($47 million), Strikerz ($40 million), and ON ($25 million). Over 85% of the money went to seed and early stages. Investors still fear late-stage investment rounds.
Drake Star Partners notes a 13% increase in the valuations of public companies. There was also a significant public offering - Singapore's Grand Centrex Limited (GCL) went public on NASDAQ through SPAC with a valuation of $1.2 billion.
GSD & GfK: Game Sales dropped in January 2024 in the UK
Analytical platforms report only actual sales figures obtained directly from partners. Major publishers, such as Nintendo, do not share sales information for digital copies, for example. The mobile segment is also not taken into account.
Game Sales
2.47 million copies of games were sold in the country in January 2024. This is 3% less than the previous year.
EA Sports FC 24 was the best-selling game of the month. Interestingly, the results for January are better for the project than for FIFA 23.
The Last of Us: Part II - Remastered took second place in the charts. The game sold 2.5 times better in 2 weeks than The Last of Us: Part I. However, it is not entirely clear whether upgrades from the PS4 version were counted or not.
Tekken 8 debuted at 7th place. The game sold a third better than last year's Street Fighter 6 in a similar period. Interestingly, most of Street Fighter 6's sales are digital, while Tekken 8's are physical.
There is also no Palworld data because the developer & publisher don’t share the information with GSD. So, in reality, the market might be on a plateau instead of a decline. Or not.
Prince of Persia: The Lost Crown debuted at 15th place; Like a Dragon: Infinite Wealth - at 23rd position.
Hardware Sales
111 thousand consoles were sold in the UK in January 2024. This is 19% less than last year.
PlayStation 5 sales dropped by 17; Nintendo Switch - by 31%; Xbox Series S|X - by 7%.
Considering that last year was the first when PS5 and Xbox Series S|X fully normalized supply chains, the trend may continue throughout the year, as pent-up demand was realized in 2023.
687 thousand accessories were sold in January 2024, which is 10% more than the previous year. The best-selling accessories are controllers for PlayStation and Xbox.