In game development, we encounter two essential players: developers and publishers. To bring a game to fruition, both developers and publishers play pivotal roles. Developers are the masterminds behind the scenes, breathing life into their creations through code, design, and imagination. In the realm of game development, two distinct paradigms emerge: large studios and indie developers. Large studios, comprising teams of tens or even hundreds, wield considerable resources and industry clout, focusing on established genres and blockbuster titles. Conversely, indie developers operate with nimbleness and creative autonomy, often driven by passion projects and artistic expression. While indie success stories like Minecraft and Undertale abound, the journey of indie development is marked by uncertainty, relying on personal funds or crowdfunding to fuel their endeavors. Despite the struggle, there are still more and more indie studios, and in recent years there have been several more hits from independent developers (Among Us, Terraria), which attracted more and more people to develop games. Publishers, in turn, act as an intermediary between the developer and the buyer. They help distribute the game, market it, sometimes find additional investors, or even help organize the development process. They serve as the vital link between developers and players, facilitating the journey from creation to consumption which is crucial for amplifying the reach and impact of a game. Some development studios have personal publishers, like Sony, or do it themselves without asking for help from publishers at all, which is common among indie developers. For investors navigating the gaming landscape, understanding this symbiotic relationship is paramount. This diversity in publishing approaches underscores the multifaceted nature of the gaming industry and the myriad opportunities it presents for investors attuned to its nuances.

Studios may have their own game engines (the software used to develop games), investors, and even stores. Such companies already have a reputation in the gaming industry, it is easier for them to negotiate rights, find actors for their games, not to mention the high quality of technical equipment that is available to developers. Such studios are often occupied with already proven genres, because they do not want to spend large amounts of resources on risky ideas. Also, do not forget that, by definition, only large studios can afford to develop AAA games, which means role-playing games with a detailed huge world or serious sports simulators and other extremely high-budget projects. Game studios are only limited by global trends, so there are big players in almost any genre one can imagine. Indie developers (or independent developers) are small teams (most often up to 10 people) that more often than not do without attracting outside investors. Such a team has complete control over the development process. This decision imposes its own limitations, because they can only use personal funds, and there is no guaranteed profit. At the same time, indie developers are less limited by gaming market trends, stereotypes and hype. Many indie games are created for the sake of artistic expression or to demonstrate the skills of the team. Sometimes members of a successful indie team are later scouted to work for the larger studios.

However, let’s not forget that game designers bring games into the world to invoke emotions, and in the end it all comes down to ‘fun’, be it a detailed and profound RPG (role-playing game), like “Death Stranding” or a casual “match-3”, like Candy Crush or Royal Match. Entertainment comes in different forms, and games are a great tool to explore the boundaries of experiences one is capable of enjoying.

We will dive into two criteria:

Genres and platforms

The main genres into which games are divided are: role-playing, shooters, simulators (sports, racing), strategies (turn-based or real-time), puzzles (including riddles and quizzes), and educational games. All of these have their own relation to platforms. While sprawling RPGs and immersive strategies find their home on PCs and consoles, the realm of mobile devices and portable consoles is better suited for casual puzzles and educational games. Large and complex RPGs or strategies are most often played on PCs and consoles, since the mobile devices lack power and memory, while also tending to perform shorter gaming sessions. Users rarely play on smartphones for several hours in a row, while this is absolutely normal for PCs. At the same time, it's uncommon to play puzzles, casual or purely educational games on consoles. These games don't require a lot of processing power, impressive graphics and sound, a certain atmosphere or long attention span, which is why they are great for mobile devices or portable consoles. This alignment ensures that games cater to the unique demands of each platform, optimizing the player experience.

Yet, the landscape of gaming is ever-evolving, spurred by advancements in technology and shifting player preferences. As smartphones boast increasing processing power, the boundaries between platforms blur, offering the tantalizing prospect of high-fidelity gaming experiences on-the-go. Similarly, efforts to miniaturize powerful consoles hint at a future where gaming transcends traditional boundaries, providing seamless experiences across diverse environments. However, technological progress alone cannot dictate the future of gaming. Player mentality and context play equally vital roles. Just as certain films demand the grandeur of a theater screen, AAA RPGs require a conducive environment for full immersion. By watching “Avatar” on a small smartphone, a person will miss a huge part of the designed experience. The same applies to games. This nuanced understanding underscores the importance of aligning gaming experiences with the intended context, ensuring that players derive maximum enjoyment and engagement.

Understanding the dynamics of user choice is crucial for publishers seeking to maximize the reach and impact of their games in an increasingly globalized gaming ecosystem. Influential factors include cultural and geographical preferences that shape gaming habits as much as other demographic criteria. While mobile gaming reigns supreme in Asia, consoles dominate in Europe and North America. This nuanced understanding informs publishers' strategic decisions, ensuring that games resonate with their target demographics. Launching a PlayStation VR game in China, for instance, would be strategically impractical, highlighting the importance of aligning platform choices with regional preferences.

Monetization

The allure of pay-to-win games may seem tempting for developers seeking quick profits. However, the reality is stark: these games often lack the intrinsic motivation and excitement that keep players engaged. While they may yield initial profits, the long-term sustainability of such games is questionable, with players quickly losing interest in the absence of fair competition and genuine enjoyment. Successful examples of pay-to-win mechanics that retain popularity and profitability while upholding a publisher's reputation are few and far between. Conversely, free-to-play models offer an alternative path to profitability, as exemplified by the meteoric rise of Fortnite. With its innovative monetization strategy, the game has not only revolutionized the industry but also solidified its position as a cultural phenomenon. While free-to-play games offer lower barriers to entry, their development remains a complex endeavor fraught with challenges. Recent shifts towards service-based models reflect the industry's ongoing evolution, with some studios opting to pivot towards subscription-based monetization strategies. However, the long-term implications of these decisions remain uncertain, underscoring the dynamic nature of the gaming landscape and the need for continued innovation and adaptation. On the other end of the spectrum, educational games offer a refreshing approach, leveraging fun and interactivity to impart knowledge. Whether through quizzes, lessons, or playful puzzles, these games engage players in immersive learning experiences. By seamlessly blending entertainment with education, these games unlock new avenues for engagement and enrichment. Yet, it's the fusion of diverse elements that truly captivates players' hearts and minds. Games that weave together compelling narratives, emotional depth, and intellectual stimulation resonate deeply with audiences. Whether through storytelling, emotional resonance, or opportunities for self-expression, these games represent the pinnacle of interactive entertainment. While such games are rare gems in the vast landscape of gaming, their development demands time, investment, and a willingness to embrace risk.

Studios may have their own game engines (the software used to develop games), investors, and even stores. Such companies already have a reputation in the gaming industry, it is easier for them to negotiate rights, find actors for their games, not to mention the high quality of technical equipment that is available to developers. Such studios are often occupied with already proven genres, because they do not want to spend large amounts of resources on risky ideas. Also, do not forget that, by definition, only large studios can afford to develop AAA games, which means role-playing games with a detailed huge world or serious sports simulators and other extremely high-budget projects. Game studios are only limited by global trends, so there are big players in almost any genre one can imagine. Indie developers (or independent developers) are small teams (most often up to 10 people) that more often than not do without attracting outside investors. Such a team has complete control over the development process. This decision imposes its own limitations, because they can only use personal funds, and there is no guaranteed profit. At the same time, indie developers are less limited by gaming market trends, stereotypes and hype. Many indie games are created for the sake of artistic expression or to demonstrate the skills of the team. Sometimes members of a successful indie team are later scouted to work for the larger studios.

However, let’s not forget that game designers bring games into the world to invoke emotions, and in the end it all comes down to ‘fun’, be it a detailed and profound RPG (role-playing game), like “Death Stranding” or a casual “match-3”, like Candy Crush or Royal Match. Entertainment comes in different forms, and games are a great tool to explore the boundaries of experiences one is capable of enjoying.

Games come in myriad forms, spanning genres from role-playing epics to casual puzzles. Each genre finds its niche across different platforms, catering to diverse audiences and gaming preferences. While AAA titles dominate the console and PC market with sprawling narratives and stunning visuals, mobile gaming thrives on accessibility and bite-sized experiences. Recognizing these distinctions is essential for investors seeking to capitalize on emerging trends and consumer preferences within the gaming space.

Games also differ in what they can be played on. Currently, the main platforms are PCs (or laptops), consoles (PS, XBox), portable consoles/systems (Nintendo Switch, Steam Deck) and mobile devices (smartphones, tablets). You can clarify the classification, recall less common examples, but the main market falls into these 4 categories. Sometimes VR gaming is identified as a separate category, but essentially it belongs to the first two - at this stage, VR games require sufficient computing power, so a helmet or glasses are connected to a console or computer.

As technology continues to advance, so too does the gaming experience. From AI-driven game mechanics to immersive VR environments, cutting-edge technologies are reshaping the future of gaming. While AI holds promise for streamlining development processes and enhancing gameplay experiences, AR and VR offer immersive, interactive worlds beyond traditional gaming paradigms. Investors attuned to these technological shifts stand poised to capitalize on the next frontier of gaming innovation. The dawn of AI in game development brings both promise and controversy. While neural networks offer efficiency and cost-saving benefits, concerns linger regarding ethics and the displacement of human workers. Criticism, particularly towards large corporations like Disney and Ubisoft, underscores the tension between technological advancement and job preservation. At the moment, society, especially artists and other visual artists, have a negative attitude towards using AI instead of real workers. Most of the criticism is directed towards large and wealthy companies (like Disney and Ubisoft), which can afford to hire more workers but still save time and money creating content. Every AI mistake is taken apart and popularized to show how much worse neural networks perform than humans. However, indie developers often face a more forgiving reception, given their pragmatic choice between utilizing AI or abandoning game projects altogether. Yet, the landscape may evolve. As AI technology matures, reducing errors and integrating seamlessly into workflows, public perception may shift. The narrative may pivot towards recognizing AI as a valuable tool rather than a threat to employment. Moreover, instances where AI outperforms unskilled labor may further normalize its adoption, fostering acceptance within society. The situation is unlikely to change towards reducing the use of AI, because people will get better and better at working with neural networks, which means there will be fewer errors, so users may not know if companies use artificial intelligence for routine tasks. Also, the spread of AI is helped by cases when companies use unskilled labor instead of neural networks, because the preference in society is: a qualified worker is better than AI, which in turn is better than a large number of unskilled workers.

Looking beyond AI, emerging technologies like augmented reality (AR) and virtual reality (VR) hold promise for reshaping gaming experiences. AR, though underutilized by many publishers, offers opportunities for enhanced mobile and educational games. Conversely, VR faces challenges like high costs and accessibility barriers, but as hardware becomes more affordable and compact, its popularity is poised to surge in the coming years. The development of AR looks like a promising direction. The only problem is that despite the interesting visual solutions, very few publishers understand how to fully use it. Some mobile and educational games could become significantly more popular thanks to augmented reality, but not many companies want to spend money on it because such games do not bring in much profit.

VR is slightly different. Virtual reality has been available for a long time, although it cannot be said that it is very popular. The main problem with the latest generation of helmets and goggles is their cost. Devices are becoming more and more convenient, but people who are comfortable playing them simply cannot afford them. Gradually (over 2-3 years) helmets will become cheaper and smaller, which will significantly help popularize games for them, however, before the release of such games, you will have to wait a few more years, because the development of such projects takes time. AR and VR are unlikely to disappear soon, as essentially happened with Kinect, but their popularity still needs to wait a few years.

While AR and VR remain on the horizon, other innovative patents hint at the future of gaming. From scent transmission to tactile feedback and accessibility features, these advancements aim to enrich gameplay experiences and cater to diverse audiences. However, the journey from concept to widespread adoption is fraught with uncertainties, and not all ideas will find success in the competitive gaming market.

In the bustling marketplace of gaming, AAA RPGs reign supreme, captivating audiences with their immersive narratives and expansive worlds. Despite the emergence of alternative genres, they still remain the most anticipated games, and sales speak for themselves. Meanwhile, sports simulators have faded into the background, especially after moving to a shareware basis, giving up second place to shooters, both story-driven and multiplayer, which claim a prominent position, reflecting the enduring popularity of adrenaline-fueled gameplay experiences. The allure of popular narrative-driven games comes at a cost, with rising development expenses necessitating substantial investments in both talent and technology, as well as hardware of higher costs. However, the potential returns are substantial, as successful titles pave the way for lucrative sequels, adaptations, and multimedia franchises. The burgeoning trend of adapting games into films and series further underscores the cultural significance and financial viability of storytelling in gaming. Some recent releases include “The Last of Us” TV series, an adaptation of the first part of the famous duology, and movies based on the “Tomb Raider”, “Uncharted” and “Mortal Kombat” game franchises. It’s fair to say, there are less financially successful examples, like “Doom” or “Hitman”, but the search for games with great storylines never stops. Currently, every year the amount of game-based movies grows, some of the examples that already made it into cinema development are the “Fallout”, “Borderlands”, “Bioshock” and “Sonic” game series with many more to come.

While creating an expensive game with a good plot and a robust world seems like the perfect choice, even reputable studios have made mistakes and failed to release expected games, so it is important to assess the volume to cost ratio of a project. At the same time, there are free (free2play) games that bring huge profits to the creators. Fortnite is the one worth mentioning in particular. This shooter introduced a shop of visual customizations with skins and accessories for the playable characters. This game made $9 billion in 2018-2019, which accounts for a significant portion (92%) of the company's total profits. Considering that its creator, Epic Games, recently won a lawsuit against Apple, their product is only wired to become more popular in the near future.

Another trend is the rise of eSports. In 2023, the tournament viewing time for free2play multiplayer games such as Dota 2, CS:GO and League of Legends increased from 120 million to 139 million hours. It is also worth noting that League of Legends has had a successful animated series on Netflix, Arcane, which earned 9 Annie Awards and has a second season coming out later this year, despite not being a narrative experience in its core. Usually, developing free games requires less investment, but the risk of quickly losing popularity, as happened with Spellbreak for example, is still present. Over the past year, several companies chose to switch from paid games to service games that are essentially free but offer additional subscriptions. However, it is too early to judge financial profits and repercussions of this strategy universally. Mainly, this transition was made by the studios that have lost some of their reputation in recent years, like EA and Ubisoft.

Looking ahead, the gaming landscape teems with possibilities, especially regarding the fate of big story-driven games. With the much-anticipated release of GTA 6 looming on the horizon, expectations are high. Yet, the likelihood of major disappointment seems slim, given Rockstar's track record and the consistency showcased in trailers. While launch hiccups have marred recent game releases, GTA 6 appears technologically sound, akin to the scope of Red Dead Redemption 2. However, it's unlikely to revolutionize the industry, maintaining a familiar formula without groundbreaking innovation. As for the broader industry evolution, indie games may proliferate, buoyed by advancements in AI. While neural networks offer promise, they still grapple with significant challenges, limiting their integration into AAA titles. Conversely, major companies may adopt a more cautious release schedule, wary of tarnishing their reputations with subpar products. Remasters, remakes, and sequels will likely dominate, capitalizing on nostalgia and technological advancements to resonate with audiences. Games like Hogwarts Legacy and Baldur's Gate 3 exemplify this trend, underscoring the enduring appeal of story-driven experiences. In essence, while the gaming landscape continues to evolve, the allure of immersive narratives and engaging gameplay remains steadfast, guiding the trajectory of the industry in the years to come.

Trends ebb and flow in the gaming industry, similarly to most domains of the current era, shaping the market's trajectory. From the meteoric rise of free-to-play sensations like Fortnite to the enduring appeal of AAA RPGs, understanding market dynamics is paramount for investors. While story-driven epics captivate audiences with immersive narratives, multiplayer shooters command a significant share of the gaming zeitgeist. Navigating these trends requires a blend of market analysis, foresight, and a willingness to embrace innovation.
At first there will be more indie games thanks to neural networks and several successful examples in recent years. AI is evolving, becoming easier to use, but it still exists a lot problems. AAA games still use artificial intelligence only at the experimental level, and not to implement important game mechanics.

Large companies will begin to release games a little less often due to the large number of scandals and negativity when releasing an unfinished or simply low-quality product. Some publishers have seriously lost their reputation for 1-2 unsuccessful games.

There will be more remasters, remakes and sequels. They are cheaper to make, with greater development of technology, less time and effort needs to be spent on optimization, which means games will become more accessible to gamers with not the latest hardware. Lately, people have really enjoyed games like Hogwarts Legacy (which stands out from previous Harry Potter games) and the sequel Baldur's Gate 3, which reminded us what DnD games can be. This only confirms the trend of popularity of story-based games, which will only grow thanks to the released series and films based on such games.

Studios may have their own game engines (the software used to develop games), investors, and even stores. Such companies already have a reputation in the gaming industry, it is easier for them to negotiate rights, find actors for their games, not to mention the high quality of technical equipment that is available to developers. Such studios are often occupied with already proven genres, because they do not want to spend large amounts of resources on risky ideas. Also, do not forget that, by definition, only large studios can afford to develop AAA games, which means role-playing games with a detailed huge world or serious sports simulators and other extremely high-budget projects. Game studios are only limited by global trends, so there are big players in almost any genre one can imagine. Indie developers (or independent developers) are small teams (most often up to 10 people) that more often than not do without attracting outside investors. Such a team has complete control over the development process. This decision imposes its own limitations, because they can only use personal funds, and there is no guaranteed profit. At the same time, indie developers are less limited by gaming market trends, stereotypes and hype. Many indie games are created for the sake of artistic expression or to demonstrate the skills of the team. Sometimes members of a successful indie team are later scouted to work for the larger studios.

However, let’s not forget that game designers bring games into the world to invoke emotions, and in the end it all comes down to ‘fun’, be it a detailed and profound RPG (role-playing game), like “Death Stranding” or a casual “match-3”, like Candy Crush or Royal Match. Entertainment comes in different forms, and games are a great tool to explore the boundaries of experiences one is capable of enjoying.