Hot Takes: February 2023

This collection of industry insights from February 2023 examines critical trends across the global video game landscape, focusing on emerging genres, market corrections, and regulatory shifts. The analysis highlights the rise of the extraction shooter genre, specifically identifying the game Dark and Darker as a pivotal influence that is expected to drive significant development pivots toward mass-market extraction gameplay throughout the year.

The mobile gaming sector faces a continued recession, with projections indicating a 5-10% decline in the Western market for 2023. This downturn is attributed to ongoing challenges in user targeting and attribution caused by privacy-focused platform changes from Apple and Google. Consequently, high-revenue genres like strategy and RPGs are experiencing the most severe impact, forcing a shift toward more casual genres that offer lower financial yields.

In the Chinese market, regulatory conditions appear to be stabilizing, creating new pathways for game approvals. A notable development is the emergence of an "information change" process, which allows games—particularly those with existing PC versions—to secure mobile licenses more efficiently. This mechanism is expected to facilitate the approval of high-profile titles like DNF Mobile. Meanwhile, the esports industry is undergoing a period of necessary consolidation; despite significant valuation declines for many firms, the sector is viewed as being in a counter-cyclical position that may ultimately lead to a more sustainable and viable business model. Finally, recent layoffs at 343 Industries are interpreted as a broader strategic shift in first-party development, where subscription-based models like Game Pass are prioritizing long-tail multiplayer experiences over high-budget, single-player titles.