Year in review: 2022 and the videogame industry

04.01.2023

As we slowly roll into 2023, it's time to pause and reflect on the most important trends, events and developments shaping the video game industry in 2022. Yes, it is tempting to recall the release of Teenage Mutant Ninja Turtles: Shredder's Revenge and call it a day, but we will proceed with a few more things that might be at least as important.

The Global Videogame Market Value has decreased by 4.3% for the first time after over a decade of uninterrupted growth. However, we don't see any reason for panic – it seems more like a correction after the pandemic-driven explosion. Plus, while the console, mobile and browser segments are declining, the PC is going strong with almost 2% of growth.
A deal between Microsoft and Activision Blizzard was announced in January 2022, but it's not closed yet. Multiple regulators, including the authorities of the UK, Canada and the United States, opposed the deal due to anti-monopoly concerns. We don't know whether this acquisition will ever happen, but we can be sure about one thing - the videogame industry is getting increasingly regulated by governments worldwide.
The Embracer group continues its shopping spree with more acquisitions. Square Enix, Beamdog, and Tripwire Interactive are just a few recent examples highlighting the general trend towards the industry's consolidation. Our biggest concern is the fate of smaller, independent studios that might lose a good portion of their creative freedom after being bought by giants like Tencent or Embracer group.
Mobile gaming is taking over. Over 50% of total videogame revenue was generated on mobile platforms. While analysts predict a decline of -6.4% in the upcoming year, mobile games are here to stay as the market's largest segment. Experienced PC and console gamers tend to stigmatize it, but we can't deny the fact that mobile games are the force that makes our hobby a lot more accessible for millions of people around the world.
The battle between Sony's and Microsofts subscription services continues. However, it took quite an interesting turn. As the Microsoft and Activision Blizzard deal is catching more public attention, both companies have toned down their rhetoric – it seems like neither Microsoft nor Sony wants to be perceived as the dominant force on the market anymore. Probably to avoid more monopoly investigations from the regulators.
Apple and Google are under unprecedented pressure from governments around the world. The dominance of the App Store and Google Play, along with 30% commissions, are getting recognized as unfair competition. As a result, we see legislative action like the Digital Markets Act in the European Union and an amendment to the Telecommunication Business Act in South Korea, forcing mobile platform holders to allow third-party stores. Tech giants, however, are not giving up on their income without a fight, making the use of alternative stores or payment providers as inconvenient as possible.
A trend towards the use WebStores emerged as means to bypass high platform fees. We see an increasing number of developers and publishers selling games and in-game items away from the infrastructure of major stores, which is quite a smart thing to do if you consider the difference in commissions. Moving at least a part of your traffic to a WebStore is easier than it seems, and the 1D3 team is ready to equip you with a full set of tools to do it.
While technically Epic Games v. Apple was decided in favour of Apple in September 2021, a coalition of states and organizations joined Epic Games in their appeal. The hearings began in November 2022, so we are still waiting to see the outcome of this confrontation, which will, without a doubt, shape how the game developers and platform holders do business with each other.
Governments worldwide are increasingly conscious about collecting VAT/Sales Tax from companies selling digital content to their residents. While this is quite a fair approach in terms of ethics, the administrative burden it creates for game developers and publishers might be huge or even unbearable. The optimal solution is to hand over tax management to a Merchant-of-Record like 1D3. Acting as your global distributor, we will take full responsibility for VAT/Sales Tax collection, reporting and remittance to local authorities.
Whether it's a consequence of the pandemic or a new industry standard, we see more delayed videogame releases than ever before. Hopefully, this situation will even out in the upcoming year, and the developers will hold on to the announced released dates more often.