A Look Back at 2022 Gaming Industry
Reflections by three gaming industry veterans
Intro
For most gaming professionals, 2022 was quite a roller coaster ride. A lot has happened in the industry with long lasting impacts. We saw new game licenses in China halted and later resumed. We saw paid media costs skyrocket, leading to new challenges in user acquisition and growth. We saw the investment landscape become more fickle and unpredictable. We also saw an overall recessive economy in the post-pandemic era. These have all caused headwinds for the gaming industry, which has already been going through some growing pains.
With those challenges in mind, we spoke with three gaming professionals from different backgrounds and different types of gaming business on both the 2022 retrospective and 2023 outlook. Here are the summaries:
How the industry trend impacts developers
2022 was not an easy year for most. On a high level, we saw the following trends with regards to how the overall market has impacted individual gaming businesses:
More Hybrid Work Model. Working from home during the pandemic has made it difficult for teams to collaborate face to face, with many teams never meeting in person throughout the entire development lifecycle. As the pandemic comes to an end, most people have grown accustomed to remote work across time zones, building a better work environment and rhythm accordingly.
Less Polarized Product Feedback. In 2021, many games received polarized reviews from players, but that seems to have changed for the better. However, we've seen many high quality games in 2022 struggling with user growth on the mobile platform and suffering from low user volume, which is concerning to see.
Less Friendly Environment for Entrepreneurship. The gaming industry was highly optimistic in the first half of 2022, with everyone aiming for higher efficiency, lower cost, and more traction. However, with the declining economy and worsening investment landscape, morale is inevitably down for the gaming business (particularly Web3). As we go through the long haul transitioning from a bull market to a bear market, companies can no longer rely on old mindsets and playbooks and will need to find a way to rebuild confidence. The first thing to do is to keep a close eye on the market, paying attention to top product performance and cryptocurrency fluctuation. More importantly, they need to not only be diligent in creating the most value out of the limited amount of funding, but also focus on delivering great product, services, and experiences to win over the player community. This could be a blessing in disguise for teams to be patient, hone in on the skills and polish the product
More Difficult to Invest or Receive Funding. Product innovation is always more crucial in the gaming industry compared to others and is the ultimate criteria that makes a successul company. However, due to the subjective nature of a creative business, there is natural difficulty in communication and alignment for gaming VC/startups as it is easy to have different views on what a good game/product is. With the economic and industry headwinds, investment and funding opportunities in the gaming industry have become even harder to get.
Keywords for 2022
Despite the overall market downturn, our panelists still described 2022 with keywords that represent more optimism.
Change. Web 3 games have emerged with significant differences from traditional games. Web 3 games have identified a unique group of users based on their specific user research, attracted a large group of talents from traditional gaming businesses, and centered its product development and commercialization more around the blockchain than real world economies (need to think about how to best integrate the blockchain ecosystem with gaming through tokenomics)
Changes are happening around us. We need to be ready to step out of our comfort zone, learn, and disrupt our thinking if we need to.
Synergy. The very many co-development gaming projects in 2022 all taught us one lesson: game development is no longer just about getting the IP or having the creativity, but more about executing and problem solving. More often than not, building rapport and support from the right people is more important than just having the data and strategy. Synergy is detrimental to the gaming business.
Diversity. As we can see from the data, supply and demand in the F2P casual gaming market is extremely imbalanced. While females represent 70% of the player base, they only make up 5% of the gaming employees. This imbalance needs a timely solution. 2022 is a year to solve this problem and we see the gaming industry going towards more diversity in 2023 (at least one can hope).
2023 Outlook
"Will 2023 be a better year?" This is technically not a real question, because the answer will probably be the same for any gaming professional - yes it will. This is not just a wish, but based in reality. On one hand, the overall market (particularly Web 3) has potentially reached a bottom with only upside in the future. On the other hand, it is universally acknowledged that the core to the gaming business is creativity, and creativity comes from within, not without.
At the end of the day, market fluctuation is nothing new - it happens all the time as a part of the economic cycle. What we need to do as gaming professionals is to continue doing what we think is right with the resources that we have. As long as we can keep calm and carry on, the world is our oyster.