State of the Video Game Business: A Special Report

Video games had already been granted a massive spotlight in 2020 amid the global crisis of the pandemic and its enabling of people turning to digital means of entertainment and communication like never before. 

But alongside the murky waters of macroeconomic uncertainty defining 2022, it’s the business of gaming that is receiving the most attention, especially after a record-setting year for M&A in the space kicked off by Microsoft’s January 2022 announcement of its agreement to acquire Activision Blizzard for $69 billion. 

Across 25 pages, the second edition of Variety Intelligence Platform’s “Level Up” report examines the interrelated sectors within the global gaming market and how this near-$200 billion industry strives to continue growing as companies become increasingly service-oriented to rely on more dependable revenue models. 

The in-game spend propping up live services is one such model that has become especially important for companies that have taken longer to conform to it as the norm, such as Sony Interactive Entertainment and its suite of primarily single-player games focused on story.

Expanding into live services is an especially important move for the console leader, as its PlayStation brand continues to be challenged by the deeper pockets of Microsoft and its Xbox systems.  

The tech giant has already changed the game with regard to subscription gaming becoming normalized, making it imperative that Sony stay on its toes to maintain its console lead given Microsoft’s strategic and expensive M&A moves. 

Meanwhile, tech giants like China’s Tencent continue to diversify investments abroad amid the country’s own regulatory changes. And all of this is occurring as stateside entities including Meta hedge their bets on the metaverse as the next step forward. 

There is still much growth expected ahead, but are such visions attainable? At what point do drops in consumer spending limit the years-long work companies must put in to bring about the next wave of interactive experiences? 

Gaming isn’t going anywhere, but the roadmap ahead is far from certain.