Subscriptions, live service games will slow down in 2024 | Newzoo

Newzoo today released its Market Trends report for the games industry in 2024, in which it predicts ways in which the industry will change in the coming year. The primary takeaway from this year’s report is that Newzoo believes the industry will become leaner as it stabilizes from 2023’s chaos. It predicts that major trends such as live service games and subscription models will cool off and see lower growth than they have in the past few years.

“After 2023, when the industry faced a series of unfortunate layoffs and many big gaming bets didn’t pay off, this year will be lean for many companies,” say Newzoo’s analysts. “The cash and investments that flooded the market during the pandemic have dried up considerably, and funding massive new projects is no longer a top priority. Games companies will employ risk reduction strategies like avoiding new IPs. Instead, they’ll focus on sequels and leveraging existing IPs.”

2023 was a year of massive acquisitions and many layoffs. Companies “restructured” and canceled projects even as hundreds of games released. Chelsea Blasko, co-CEO of Iron Galaxy, said in the report, “As we begin 2024, we see opportunities to bring some much-needed stability to our industry.”

Scaling back

Two major trends that Newzoo predicts will drop off are live-service games and subscription platform growth. Both have been major parts of the games industry for the last few years, with games such as Fortnite, Apex Legends or Grand Theft Auto Online making being big sellers; and platforms like Xbox Game Pass and PlayStation Plus being popular with gamers.

However, Newzoo predicts that interest in subscriptions will cool in 2024, and growth will slow down. According to its analysts, “indie game companies have been less eager to sell licenses, signifying the deal size for these licenses has decreased.” They also estimate that games companies will become more reluctant to release their games onto subscription platforms on launch day.

As for live-service games, the company predicts that developers will return to making premium titles as engagement for live-service games is no longer as high as it used to be. Gamers have less time to devote to a single game long-term, much less more than one live-service game, particularly if they also want to play premium titles.

Future opportunities

That said, the report is not all caution and gloom. Newzoo also predicts that we’ll see the new Nintendo console sometime this year, and that the Switch successor will have a new 3D Mario game. It also predicts that Xbox will launch a store on Android in order to expand to mobile. Xbox acquired King, the makers of Candy Crush, as part of its acquisition of Activision Blizzard.

Newzoo is also sanguine about the adoption of generative AI in game creation, despite its rather controversial view in the eyes of developers. The analysts predict AI won’t cause significant changes, simply because large-scale usage hasn’t been done before. “AI may be advancing at unprecedented speeds, but in 2024, most use cases will be selective and already proven.”

Originally appeared on: TheSpuzz