A Change for the Better: The Trends That Will Define Games’ New Era

We are undergoing one of the most profound periods of change in the game industry’s history.

Devastating layoffs have defined the headlines in recent months, as observers have tried to understand why we have seen quite so many studio closures. Many argue that a new reliance on pleasing shareholders is to blame, while others posit that the metrics on which success is measured have outgrown reality. Speak to those with their ear to the ground of the games finance space, and you’ll hear talk that now a five-fold return-on-investment (ROI) isn't enough to assert success – and that we are rushing towards a reality where expectations of 10x or 20x ROI really might become a new norm. That leaves a lot of capacity for very profitable games counting as ‘failures’, and might encourage a lot of moonshot pitches and pressure to overpromise. High sales in the pandemic certainly didn’t help, setting an impossible precedent for the realities of 2024.

Meanwhile, dev costs of triple-A are spiralling, meaning some large publishers are placing their bets on safe IP, reducing commitments to support original properties. The continued dominance of older persistent live games like Fortnite and League of Legends has redefined the market too. Game analytics firm Newzoo assembled top-ten lists of the most played games through 2023 by tracking monthly active users (MAU). The average age of the top ten PC games as listed by MAU was 9.6 years. Over on PlayStation and Xbox, meanwhile the averages were 7.4 and 7.2 years respectively.

And, as we have explored in depth, we are seeing a grand shift in what game platforms are – and who controls them. Equally, some conversations touched on the conventions of ownership of player communities. Community management is now a core element of game marketing – and even development. And yet today most developers have to default to building communities within platforms like Steam, potentially syphoning them off to Discord (and away from the point where players interact with their game) to retain anything like a direct relationship.

Those things have understandably been key talking points at all of the global gaming events so far in 2024. We have been at most of them, including GDC, Nordic Game, PCG London, DICE Vegas, and Develop: Reboot – sometimes on the stage, sometimes in the audience, and always joining the discussion, discourse, and knowledge sharing. We’ve learned a lot and contributed all we can, taking in a diverse spread of perspectives on the challenges, solutions, opportunities, trends, and changes set to shape the future of games. We’ve picked up on a very real sense that this period of change offers an opportunity to evolve and renew conventions of the game industry ecosystem, which should in turn deliver a more promising future where opportunities for quality, success and growth are sustainable, and where good games, healthy staff, and impactful business practice go hand-in-hand.

So, now, at the mid-point of 2024, we thought we’d round up and share the key themes currently defining the game industry’s conversations, painting an informed picture of what the coming years may have in store for us all.

A reconnection with games is underway

A theme that has surfaced numerous times throughout 2024’s game industry events – and particularly at the most recent examples such as Nordic Game – is that the focus must return to games over ROI. That is not to say games should let go of commercial success. Far from it, in fact; it was variously posited that a little more attention on craft and quality will deliver sustainable growth and commercial success that can thunder forward without haemorrhaging talent and requiring waves of studio closures.

Speaking on stage at Nordic Game to our founder and CEO Alexander Bergendahl during their fireside chat session, Adam Boyes, co-CEO of Iron Galaxy Studios and former vice president of third-party relations at PlayStation proposed that, across the developer and publisher ecosystem, a focus on people, wellbeing, and creativity – where principles of kindness, respect, forgiveness, and honesty inform day-to-day decision making and core practise within studios – may see more studios thrive and grow, talent flock to the industry, and creative and original IP push titles to the top of the charts, while giving investors returns that are both large-scale and sustainable. Ambitions of 10x ROI as a minimum bar for success might have to be consigned to the past, but only to be replaced by a place where many more games reach success, and where notions of relying on a handful of mega-hits to maintain a smaller industry and economy suddenly seems rather short sighted.

Platforms (and publishers) will change

At LootLocker we’ve been enthusiastically vocal about a needed shift in the conventions of game platforms, and our vision for what that future could look like. As such, we were gratified to hear many similar perspectives emerging across so many of the industry events from the first half of 2024. The old model of walled gardens (think PlayStation, Xbox, Switch, Steam, and Epic Game Store) setting the terms, agenda, technological preferences, revenue deals, player-developer relationship, and hierarchy of exposure is coming to an end as new models and ways to access games emerge – from game and publisher-specific online platforms to those provided by new contenders like TikTok or Netflix.

Speaking to developers everywhere from DICE Vegas to PCG London, it was clear that there is a core desire to see both platforms and publishers move back to serving developers rather than constraining them, offering the freedom and flexibility over their player communities, technological foundations, online sales and more. Offering rigid terms and conditions in return for controlled exposure has lost its appeal for devs. Platforms and publishers absolutely need to change to stay in step with an evolving industry, and it seems there is broad consensus on that.

The rise of external partners and external tech

Third-party technology, co-development partners, and outsourcing studios are certainly nothing new in games, but at several points across the game industry calendar of recent months, it was suggested that we are going to see a shift to a point where external partnerships of all kinds become more normal. This approach serves and enables many of the aforementioned solutions. External technologies not only let developers put more focus into the craft of making good games and managing their teams with a more human-centric mindset; they equally enable and empower the ability to build the ecosystem that suits a studios needs, rather than the requirements of walled garden platforms. Others proposed that we will start to reframe ‘outsourcing studios’ as ‘creative partners’ that allow teams to scale as needed, and inherit the knowledge gained by external creatives that have worked across a tremendous range of games, creative processes, platforms and technologies.

Equally – and fascinatingly – on a Nordic Game panel of CTOs featuring our own co-founder and CTO Andreas Stokholm, discussion turned to the notion that in employing external tech, studios are less reliant on internal staff with the most traditional tech and engineering skills. There will still be places for those skills, but as external tech becomes more emphasised, studios are freed to hire from a broader pool of applicants – for example, the new generation of coders not versed in 3d mathematics. On reflection, that may in turn help with the important work of diversifying games’ appeal and reach by bringing more diverse voices and experiences into the development process.

Small and mid-sized teams will define games' future

Much of the talk at the events we have attended highlighted the fact that triple-A development is increasingly costly and complex, at the same time as those persistent games like Fortnite make it all the more risky to develop new blockbuster titles. As such, many are now recognising that small and particularly mid-sized studios are where some of the most interesting and valid games and game making methods are now coming from.

“There’s so much access now to engines and tools for people to build their own things on their own or in small teams, and that’s incredible,” Adam said on stage when interviewed by Alexander. “If we look at the last 10 years, how many massive breakout successes have come from the big companies? Maybe one. Maybe two. Right? It’s mostly coming from smaller teams that are navigating unfettered through the wilderness and building really cool stuff. [...] That’s where the creativity is coming from.”

And that, it seems, might be where the future of the games industry is. There will always be a place for giant publishers or platform-owned studios making chart-topping blockbusters. But, if the buzz at so many game industry events – and particularly at the most recent Nordic Game – is to be believed, as the dynamics of platforms, technology, publishing, and partnership shift in an era when games and creativity return to the front of minds, it may be that small and mid-sized studios soon not only make up the industry’s numbers, but also set the agenda from the top of the food chain. Indeed, during the writing of this article Summer Game Fest’s Geoff Keighley opened the 2024 show by confirming that of the 10 best selling Steam games through January to May this year, eight were indie titles made by small or mid-sized teams.

Survive far beyond 2025

Across 2024’s game industry events to date, it’s become increasingly common to hear talk of taking on a ‘survive until ‘25’ mindset. The logic is that if game companies can hunker down and make it to 2025, things should return to ‘normal’, and opportunities will again return. Over time, however, we’ve come to take a slightly longer term view, and speaking to others at events like GDC and Nordic Game, we have found we’re not entirely alone. Certainly, adopting something of a survival attitude can be helpful. But the idea that a sudden return to how things were is coming arguably oversimplifies the reality. This is a period of change. Enthusiastic investing and consumer spending will be back. But that might begin across 2025, returning to or exceeding previous levels in 2026 – or even in the years following. All the wider industry evolutions we’ve discussed here, meanwhile, will playout in the long term, themselves changing over time. They are emerging now, and will continue to do so. As such, while surviving until ‘25 is a well-intended philosophy, increasingly leading game companies are starting to think about longer term strategies and planning as they look to embrace a more fruitful future.

A promising future

Those were not the only themes to be discussed at the spread of conferences and expos we have attended in 2024 to date, of course. And perhaps it shouldn’t be surprising that at games industry events, themes around evolutions in publishing, technology, platforms, and creativity should dominate. But as the game industry ponder’s passing through this period of profound change, the future ahead of us might be one where the power is handed back to teams and creatives, where technology, platforms and services empower studios rather than constrain them. That’s a future we at LootLocker have been prepared for for a very long time indeed.