The increasing supply of next-generation consoles should give fresh impetus to video game demand over coming years, with the blockbuster release cadence expected to accelerate and fuel industry growth.

The transition to new consoles is historically a boon for game software publishers as consumers eager to test the capabilities of their new machines spend more and as publishers ship more blockbusters to fully take advantage of this rising consumer spending.

Gaming experiences on mobile devices are also expected to make a quantum leap over coming years as 5G becomes mainstream and gives a boost to immersive augmented reality applications and game streaming.

Game streaming and cloud gaming will be major drivers as they will remove the need to buy expensive hardware to play games, accelerate the shift to subscription business models and usher in cross-play (users on a specific platform will have the ability to play/compete with users on other platforms).

The growing popularity of live streaming and eSports appears as a secular trend and is expected to offer both increased engagement and new revenue streams (media rights, sponsorship…) to game publishers.

In the longer term, gaming companies appear at the forefront of the Metaverse revolution, a 3D virtual world where users can remain engaged even when they are not actively playing: they can chat, watch others and share moments around special events (concerts, movies…). The Metaverse will come with its own economy and new monetization opportunities (advertising, NFT collectibles…).

Video gaming assets should then keep attracting M&A interest from Tech and Media giants seeking to bolster their content library amid the rise of video game streaming and to consolidate their position in the Metaverse.


Gaming: M&A or FTC?

Over the last couple of months, the US Federal Trade Commission (FTC) has filed to block two M&A deals in the video game space, first the acquisition of virtual reality start-up Within (that developed a VR fitness app) by Meta and, last week, the blockbuster takeover ($69 billion) of Activision Blizzard by Microsoft. Both legal…

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Gaming: Some Light At The End Of The Tunnel

Despite the post-pandemic gaming slowdown and initial macro headwinds, quarterly reports from game makers have been decent overall, with revenue/bookings hovering between moderate growth (Capcom, Ubisoft, EA, Square Enix, Roblox…) and moderate decline (Tencent, Activision, Take-Two…) and earnings expectations/guidance being materially cut in a very limited number of cases (Roblox, Take-Two). As expected, console and…

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