Origin

Key Takeaways from Gamescom 2024

Gamescom 2024 served as a critical barometer for the current state of the global video game industry, highlighting a period of significant structural transition and economic recalibration.

• Black Myth: Wukong achieved 2.4 million concurrent players on Steam and sold over 10 million copies across all platforms, with 8 million units sold on Steam within its first 48 hours.
• Mobile game studio spending has declined significantly, forcing many vendors to pivot their focus toward PC and console developers to maintain budgets.
• The industry is entering a 'trough of disillusionment' regarding AI, with growing sentiment that the technology has plateaued or is currently overhyped in game development.

State of Mobile Gaming: 1H 2024

The mobile gaming industry experienced a period of stabilization during the first half of 2024, following a post-COVID decline.

• The global mobile gaming market has stabilized following a post-COVID decline, with 1H 2024 revenue plateauing at levels similar to 1H 2023, while downloads saw a modest 1–2% increase.
• Tier 1 Western markets outperformed other regions, recording a 7% revenue growth in the first half of 2024.
• Dungeon & Fighter: Origin dominated new releases, generating nearly $300 million in revenue exclusively on iOS in China.

Mobile Gaming Market Review 1H2024 | AppMagic Data Analysis

The mobile gaming market reached a state of stabilization during the first half of 2024, effectively concluding the post-pandemic decline.

• The mobile gaming market stabilized in 1H 2024, ending the post-pandemic decline with Tier 1 Western markets recording a 7% revenue increase despite modest global download growth of 1–2%.
• Major studios are shifting strategy from high-risk new title development to optimizing existing assets through sophisticated LiveOps and enhanced monetization frameworks.
• Success is increasingly driven by the 'casualization' of core mechanics, exemplified by Brawl Stars' revenue recovery and the integration of hyper-casual loops in 4X strategy titles like Last War: Survival and Whiteout Survival.

Has the World Gone Bananas?

The gaming industry landscape as of mid-2024 is characterized by the dominance of established titles in mobile revenue and the emergence of unconventional engagement models on PC platforms.

• Dungeon & Fighter: Origin remains the #1 game in worldwide revenue, driven primarily by the Chinese market.
• Honkai: Star Rail rose to #2 in worldwide revenue following the release of its Version 2.3 update, 'Farewell, Penacony.'
• The Steam game 'Banana' reached over 917,000 concurrent users by utilizing a speculative business model where players collect and trade virtual banana skins on the Steam Marketplace.

Q2’24 Gaming Deals Report

The second quarter of 2024 marks a period of stabilization for the global gaming industry, signaling an end to the post-pandemic "hangover" phase.

• Private investment in the gaming industry reached a new quarterly benchmark of $1 billion across 116 rounds in Q2 2024, signaling a stabilization of the market.
• Steam full-game sales grew by 27% year-over-year, driven primarily by a strong performance from indie and AA titles.
• Early-stage venture capital is fueling current market activity, while late-stage deal-making remains sluggish due to persistent economic headwinds.

Q2'24 Gaming Deals Report: Gradual Recovery

The second quarter of 2024 gaming industry analysis highlights a period of sustained activity in early-stage venture capital and a growing market for independent and mid-sized titles.

• Steam full-game sales grew 27% year-over-year in Q2 2024, driven primarily by strong performance from independent and mid-sized titles.
• Asia led global early-stage investment with $320 million across 28 deals, while North America dominated late-stage venture capital with $239 million across seven deals.
• BITKRAFT was the most active early-stage investor by volume with 18 rounds, while a16z Games led in total deal value with $124 million invested.

GungHo Online Entertainment Financial Results: FY2024 1Q

GungHo Online Entertainment’s FY2024 first-quarter financial results highlight a strategic shift toward global market expansion, particularly through the development and distribution of mobile and PC titles.

• Overseas markets now account for 54% of GungHo’s total revenue, marking a significant shift toward international expansion.
• Year-over-year net sales and operating profit declined in Q1 2024, primarily due to the absence of the major regional Ragnarok launches that boosted performance in the same period of 2023.
• Operating profit improved on a quarter-over-quarter basis, driven by a reduction in selling, general, and administrative expenses, specifically lower advertising costs.

Gravity Co. 20-F — FY2023 (April 2024)

Gravity Co., Ltd. reports a robust fiscal year 2023 driven by its mobile-gaming portfolio, particularly the flagship title Ragnarok Origin.

• Gravity Co. reported a 56.5% revenue increase to KRW 725,516 million in FY2023, driven primarily by the Southeast Asian launch of Ragnarok Origin, which accounted for 62.3% of total revenue.
• Mobile micro-transactions remain the company's core business model, growing 75.5% to KRW 629,604 million and representing 86.8% of total sales.
• Despite a 53.2% rise in operating profit to KRW 160,367 million, gross margins compressed from 42.3% to 33.2% due to increased platform and royalty costs.

10-K: FY 2023

Corsair Gaming Inc. reports a 2023 fiscal year marked by robust growth in its high-performance gaming and creator hardware segments, driven largely by a 13.6% increase in Gaming Components & Systems sales and a 24.7% gross margin expansion to $360 million.

• Corsair reported a net loss of $1.04 billion in FY 2023, driven primarily by $30.9 million in stock-based compensation and tax-related adjustments.
• The Gaming Components & Systems segment grew by 13.6%, contributing to a 24.7% gross margin expansion totaling $360 million, while Gamer & Creator Peripherals revenue declined 9.8% to $42.9 million.
• The company faces significant customer concentration risk, with 30% of revenue derived from Amazon and 55% coming from its ten largest customers.

GungHo Online Entertainment FY2023 Financial Results

GungHo Online Entertainment’s financial results for the fiscal year ending December 31, 2023, reflect a period of revenue growth driven by global game operations and strategic content updates.

GungHo Online Entertainment Financial Results: Fiscal Year Ended December 31, 2023

GungHo Online Entertainment’s fiscal year 2023 financial results highlight a strategic pivot toward global market expansion, characterized by a significant increase in overseas net sales.

• GungHo Online Entertainment achieved consolidated net sales of 125.3 billion yen for the fiscal year ended December 31, 2023.
• The company’s global revenue ratio reached 64% in 2023, a significant increase from 11% in 2016, driven by international distribution of mobile and PC titles.
• Financial stability remains heavily reliant on the flagship mobile title Puzzle & Dragons and the global expansion of the Ragnarok franchise managed by subsidiary Gravity.

GungHo Online Entertainment Financial Results: FY2023 3Q

GungHo Online Entertainment’s third-quarter fiscal year 2023 financial results highlight a strategic pivot toward global market expansion and the diversification of its mobile-centric portfolio.

• GungHo’s overseas net sales ratio reached 65% in the first three quarters of 2023, signaling a successful shift away from a Japan-centric revenue model.
• Consolidated net sales and operating profit declined quarter-over-quarter due to a reactionary drop following the strong Q2 launch of Ragnarok Origin in Southeast Asia.
• Year-over-year net sales growth was primarily driven by the performance of Gravity’s Ragnarok-related titles, though this also contributed to an increase in the overall cost of sales.