Now that I’ve looked back with my 2023 Year-in-Review, which I still highly recommend reading to catch up on trends, games and studios you might have missed, it’s officially time to move into the new year!
After a legendary twelve months of game releases amidst a disastrous time for the industry’s labor market, I believe uncertainty and volatility are set to define 2024. There will be challenges, and plenty of them, yet also select opportunities on which to capitalize. I see a future with new hardware, labor issues and new service launches from key players, among other things.
Rather than make general statements, which are far too easy, I try to make my predictions quantifiable somehow, or at least be as specific as I can, to hold myself accountable. Plenty of people make predictions; not many grade themselves. For instance, here’s my results from last year:
- Microsoft & Activision Blizzard Deal Closes in Calendar 4th Quarter: Correct.
- Nintendo Goes Another Year Without Announcing a Switch Successor: Correct.
- Global Games Industry Value Returns to Growth & Passes $188 Billion: Partially Correct.
- It grew, albeit not as much as I expected.
- PlayStation 5 Wins Best-Selling Console in the U.S. Yet Misses Sales Targets: Correct.
- Well, so far. I would also argue Sony is tracking below its PlayStation 5 fiscal target.
- Xbox Game Pass Price & Subscription Base Increases: Partially Correct.
- Cost to consumer went up, though Microsoft refused to share user base stats.
- Special Year of Fighting Game Releases & Announcements: Correct.
- Amazon Games Makes Massive Studio Acquisition: Incorrect.
- Bonus: Bungie Announces & Launches Destiny Universe Transmedia Property: Incorrect.
Not bad, right! Now, check a look below for seven predictions for 2024 covering the games industry at large. Plus, as usual, a super bold bonus guess mostly for fun.
Happy New Year everyone.
Super Nintendo Switch & New 3D Mario Release in Fourth Quarter
I’ll get an obvious one out of the way. In fact, I’ll make it a bit harder by attempting to guess exact things for what’s inevitably going to be the year of Nintendo’s next hardware launch. The company’s next hardware will be called Super Nintendo Switch. It will again have a hybrid portable and console setup, will launch with one model in October, and cost $400 to start.
Alongside, Nintendo will product a mainline 3D Mario as a launch title. It won’t be a sequel to 2017’s Super Mario Odyssey. It will be an open world with various areas and secret levels. It will be called Super Mario [Something] 3D. In addition to this, I’m guessing a motion game launches day-and-date plus a mainline Animal Crossing and Mario Kart will both be out within its first year. The device will, after a somewhat slower start as adopters move on, end up following a similar trajectory as its predecessor within three years. That’s right, I’m officially done underestimating Nintendo.
Difficult Labor Market Continues as Major Publishers Reduce Workforce
This is absolutely the most painful prediction to write, mainly because it’s a carry-over from last year that I don’t think will stop any time soon. During January to December 2023, Games Industry Layoffs estimated that upwards of 9,000 jobs were cut across the sector. I believe that anyone hoping for a more cheerful 2024 for hiring or even stability will, unfortunately, be disappointed.
After years of low interest rate borrowing, higher-than-usual consumer demand and expansion by many firms, I’m expecting even more layoffs and even studio closures in 2024, especially at the top-end, AAA level. Within the first week of January alone, Surgeon Simulator maker Bossa Studios laid off a third of its employees and further losses were reported at Embracer Group’s 3D Realms and Slipgate Ironworks. I believe we’ll see a further contraction of more than 3,000 to 5,000 jobs, with at least two major publishers announcing 5% to 10% workforce reductions.
Microsoft Xbox Mobile Store & Big Name Activision IP Announcements
Here’s a two-for-one. A natural progression of Microsoft’s service-oriented strategy will be developing a dedicated Xbox mobile distribution platform that integrates Game Pass and cloud offerings. I anticipate it will both reveal and release this sort of storefront in 2024, let’s say between June and December. It will simply be called Xbox Mobile. This move is advantageous from various perspectives, in particular for maximizing platform fees, diversifying its offerings, controlling content flow, appealing to potential partners and expanding its audience base across devices. Can it truly compete with Apple and Google’s market share? Well, you won’t see me betting on that.
That brings me to the second part of the prediction: Now that the Activision Blizzard deal is done, I believe the team will revive certain brands, especially those that can round out the Game Pass portfolio and even crossover to mobile. Within the next 12 months, I’m thinking the team will announce the following: new Skylanders and Tony Hawk’s Pro Skater iterations, both being ongoing platforms and revenue generators. Once the mobile store and larger brand IP are established, Xbox will move into Spyro the Dragon and Phil Spencer’s beloved Hexen, which I don’t expect to be revealed until at least 2025. I’m much more skeptical on others, for instance a Guitar Hero revival.
Sony Launches PlayStation 5 Pro & Spider-Man 2 Expandalone in November
Not to be outdone by Nintendo, I’m thinking fellow Japanese hardware maker Sony kicks off its mid-generation console refresh this year. While it feels like just yesterday the platform holder launched the PlayStation 5, partly because of a global pandemic making the passage of time irrelevant, it’s now over three years into the latest cycle. Thus, I’m expecting a boosted PlayStation 5 Pro announcement sometime in the third quarter and a quick turnaround to release in the beginning of November 2024.
Along these lines, I’m going to say star studio Insomniac Games is cooking up what I call an “expandalone” for its 2023 hit Marvel’s Spider-Man 2, similar to the Miles Morales counterpart to 2018’s Marvel’s Spider-Man. (Mild spoiler warning!) This will be a solid 8 to 10 hour experience, it will hit market on the same exact day as the new console model, boast a range of performance options to show off the fancy tech and feature the webbed buddies facing off against Carnage as the primary villain.
Total Global Games Industry Value Will Remain Virtually Flat
In the last quarter of 2023, NewZoo estimated the global games industry did exhibit growth during the year even with a slew of challenges, moving up under a percent to $184 billion in value. The largest contributor of Mobile accounted for over $90 billion, down 2% as this segment stagnated during the year. It was Console and PC software, including full game digital downloads, driving upward momentum with those segments moving up 5% and 2%, respectively.
This year, I’m leaning towards caution for 2024 and think the global industry will remain virtually flat, with slight downside in potential negative territory. This would be notable as only the second decline of the last 16 years, alongside 2021 to 2022. I am guessing $183 billion to $184 billion for the full year. Partly because of a tough comparison against a stacked release calendar, between the out-performance of Hogwarts Legacy and The Legend of Zelda: Tears of the Kingdom among others. I expect minimal mobile momentum to remain, as well as subscription stagnation and a heavy reliance on a new Nintendo console that could have a slower adoption rate. There is some decent upside if my PlayStation 5 Pro prediction hits, because I do expect a good holiday season for Sony regardless.
AI Usage Ramps as At Least Two Big Titles Embrace Generative Voice & Writing
It’s time for the dreaded buzzword bro: Artificial Intelligence! As much as people don’t like AI, or misuse the term, it’s part of our collective future and is already an integral part of making games. It has been for a while within an industry that blends art and technology, as various notably projects have already used some form of it to assist human developers. Recent examples include Ubisoft writers leveraging it for non-playable character chatter, Squanch Games having AI artwork in High on Life and The Finals from Embark Studios features generative text-to-speech.
I expect this sort of AI-assist development tech to take an even more prominent role in 2024. How will I quantify this prediction? I believe that at least two major publisher titles will heavily feature something like AI-enhanced primary characters or substantially aiding the writing team with main or side quest lines. Candidates include Ubisoft, Square Enix and even PlayStation Studios, the last of which has done great work with accessibility features, a fantastic opportunity area for this exact sort of development workflow enhancement.
M&A Cautiously Continues With Acquisitions by Saudi Arabia’s Savvy Games & Netflix
Last year’s merger and acquisition (M&A) valuation was skewed by Microsoft’s monumental $69 billion takeover of Activision Blizzard. Before that closed in October, companies weren’t as active in terms of deal value through the first nine months of 2023 according to a global report from Drake Star. There were 746 deals valued at $18 billion, down from 626 deals at $51 billion during the same time in 2022. Similar to my sentiment right now, there’s a lot of uncertainty around things like rates and jobs, which is why I believe that 2024’s deal landscape will be selective rather than massive.
Even so, there will always be moves made by key players. I expect a couple of those to be Savvy Games and Netflix. The former is the gaming investment vehicle of Saudi Arabia’s government, which is throwing cash at various sectors including tech, while the latter is hellbent on pushing games to its millions of subscribers. Might a name like CD Projekt be appealing to these kinds of buyers after a stock price decline? (I’d say so.) Might a platform holder named Sony be interested in spending big bucks on a Ubisoft or Capcom? (Eh, I don’t think so.) Finally, which business will Embracer spin off to pay down its debt and which company might subsequently buy them? (I’d wager Gearbox Entertainment or Coffee Stain, or both.)
Bonus & Bold: Bungie Concludes The Final Shape With Destiny 3 Announcement
That’s right, it’s time to finish with a pipe dream! Yes, it’s a mostly absurd one. It’s something I want more than expect to happen. I acknowledge Bungie got rid of a reported 100 folks, or 8% of staff at the time, back in October. It’s making a huge push towards The Final Shape expansion, the huge finale of Destiny’s decade-long saga. A good portion of the team is actively focusing on extraction shooter and likely 2025 launch Marathon.
I’d still wager the talented folks at Bungie are drafting up something more substantial for the future of Destiny that isn’t just the announced periodic episodes once the latest expansion concludes in June. Plus, it’s a bloated game with a reportedly dated development process that drastically needs a reset. Which is why I think the third mainline Destiny franchise title will (realistically probably not) be announced this year, and (is super unlikely to) launch subsequently in 2026!
Note: Comparisons are year-over-year and dollars are in US$ unless otherwise noted.
Sources: Bloomberg, Company Investor & Media Websites, Drake Star, Drexel News Blog (Image Credit), Games Industry Biz, NewZoo, Video Games Chronicle, VideoGameLayoffs.com.