Market (Overall)·Updated Apr 8, 2026 by Room 8 Group
Report · January 1, 2025
Published by Room 8 Group, 80 Level
The report argues that user‑generated content (UGC), artificial intelligence (AI) and cloud gaming are reshaping the industry by lowering entry barriers, democratizing creation and expanding cross‑platform reach. Data show that Gen Alpha and Gen Z spend a majority of their daily gaming time, with UGC platforms such as Roblox attracting 85 million active users and cloud‑gaming subscribers rising from 62.5 million to nearly 396 million in four years. AI‑driven tools are projected to generate $4.2 B by 2029, while cloud‑gaming revenue grew from $1.1 B in 2020 to $6.9 B in 2024 and is expected to reach $18.7 B by 2027. Indie developers benefit from cloud infrastructure that allows anyone to play AAA titles and AI engines such as Unity Muse or Unreal Engine that reduce development costs. Indie releases on Steam generated $4 B in 2024, matching AAA revenue streams, and UGC has extended the life of titles like Fortnite and Roblox, boosting retention by up to 10 % in some cases. However, quality control, cross‑platform compatibility and monetization remain challenges; dedicated mod QA teams, “mod hub” interfaces and transparent pricing are recommended to sustain high‑quality ecosystems. Player surveys reveal mixed feelings about AI, with 54 % seeing more benefits than drawbacks but 52 % feeling nervous. Creators view AI as a productivity aid, with 83 % adopting it and reporting improved content quality (66 %) and asset variation speed (70 %). Cloud gaming is praised for cost savings (47 %) and accessibility (44 %), yet latency (76 %) and bandwidth (68 %) issues persist, underscoring the need for edge computing, AI‑based compression and better economic models. The analysis projects cloud gaming as the dominant play model within a decade, initially targeting B2B use cases before expanding to consumers. Advances in 5G and internet infrastructure are expected to unlock low‑latency streaming, enabling cross‑platform play and the convergence of AI, UGC and live‑service models into socially connected gaming ecosystems. The report concludes that while continuous evolution and community engagement will drive growth, depth in specific genres may ultimately define the next wave of innovation.
RESEARCH j u n e 2 0 2 5 I n t The gaming industry is evolving rapidly, with new technologies disrupting the space and player expectations changing. r In 2025, we’re seeing a big shift toward user-generated content (UGC), artificial intelligence (AI), and cloud gaming, which offer exciting ways to create, play, and connect. However, these o advancements also bring their own unique set of challenges. To take the temperature of the industry for the rest of this year and beyond, 80 Level and Room 8 Group have partnered to conduct research on three of the most intriguing trends in the gaming industry.
RESEARCH j u n e 2 0 2 5 a b o u t u s Room 8 Group is an end-to-end strategic partner in external game development. Working across all platforms, we provide creative and technical expertise across game 80 Level is a global media platform, development, technology, art, trailers, and QA market research agency, and service that for AAA and AA games. connects talents with hiring companies. Since 2011, we’ve built creative partnerships with world-leading publishers such as Microsoft, Nintendo, Ubisoft, Sony, Gameloft, 80 Level Research conducts quantitative and Take2, EA, and more. qualitative research to gain valuable market insights. We leverage structured surveys While leveraging our own cutting-edge tools and in-depth interviews to identify industry and R&D capabilities, we’ve co-created trends, challenges, and growth opportunities. a multitude of award-winning projects for video game IPs and franchises including Call With over eight years of experience, we've of Duty, Diablo, Assassin’s Creed, Star Trek, The completed more than 100 research reports Walking Dead, Doctor Who, and many more. and prepared presentations for prominent conferences like GDC and Devcom. To find out how Room 8 Group could help you make your next great game, contact: To find out more how 80 Level Research can help you, contact: Anna Berdnyk Deputy Head of Business Development Arti Sergeev [email protected] Head of 80 Level [email protected]
RES EAR CH j u n e 2 0 2 5 We interviewed 9 leading experts in game development, production, creativity, and marketing to gain valuable insights into how these innovations are being applied today and what the future holds. Meet Our Experts Benjamin Paquette Yann LeTensorer Guillaume Carmona Senior Game Director VP of Technology VP of Game Development at Room 8 Group at Room 8 Group at Room 8 Group Shayan Sanyal Scott Reismanis Daphne Parot Global Games Industry CEO at mod.io CMO at Blacknut BD Leader at AWS Manolis Emmanouilidis Jan Sechovec Štěpán Kaiser Co-Founder at Arcware Technology Director at Revolgy’s Global GameTech Lead Cloud Gaming Department at Revolgy This report explores in detail important trends and technologies that will, one way or another, impact gaming significantly in the near future, from the growing power of AI to how UGC and cloud gaming are making games more dynamic, accessible, and community-driven. If you want to stay ahead of the latest trends and see where gaming is headed, this report is for you!
RESEARCH j u n e 2 0 2 5 Laying The Foundation: Key Industry Insights <thead> <th colspan="2" rowspan="3">01</th> </thead> <tbody> </tbody> The gaming industry is changing fast; games are now part of people’s everyday lives. Over 90% of Gen Alpha and Gen Z interact with video games, and their preferences influence the gaming market, driving the popularity on social, immersive, and interactive experiences. This shift has fueled the rise of trends like UGC, AI, and cloud gaming. For example, Roblox, the biggest UGC game in the world, became extremely popular among younger generations: in the U.S., 48% of people aged 13-24 played it in 2024. 02 UGC is becoming a key part of gaming, with leading games like Fortnite, Roblox, and Minecraft. Players can make games more dynamic by creating and sharing their own content, which not only extends game lifespans but also increases users’ engagement and retention. In Q4 2024, over 85.3 million people were actively playing Roblox, showing the demand for player-driven creativity. There’s also the potential growth of UGC in traditional gaming experiences like sports, racing, and strategy games. TrackMania, Journey of Wrestling, and Zeepkist are great examples of how players are getting creative in these spaces.
laying Roblox, showing the demand for player-driven creativity. There’s also the potential growth of UGC in traditional gaming experiences like sports, racing, and strategy games. TrackMania, Journey of Wrestling, and Zeepkist are great examples of how players are getting creative in these spaces. 03 However, some studios can face challenges such as legal issues, quality control, and accessibility when incorporating UGC into their games. Besides, modding has historically been free, so it can be difficult to justify for paid UGC. Overcoming these hurdles requires easy-to-use tools, cross-platform compatibility, and fair monetization models.
RESEARCH j u n e 2 0 2 5 04 AI in gaming is expanding quickly and is projected to grow to $4.2B USD by 2029. This technology allows developers to automate routine tasks, improve coding, enhance game personalization, and integrate open-ended conversations with NPCs. 05 Despite the fact many studios are still concerned about the replacement of human work by AI, our interviewees believe that emotional depth, creativity, and narrative design remain essential in game development. That’s why AI will be a supporting tool that enhances human creativity in the gaming industry. 06 The cloud gaming space is also growing fast: in just 4 years, the number of users increased from 62.5 to 395.9 million. The demand for instant access to games, cross-platform play, and affordability is driving adoption, but challenges like latency, infrastructure limitations, and scalability still need solutions. Advancements in 5G could solve latency and connectivity issues, making cloud gaming more reliable, while AI optimizations could help build better infrastructure and improve cost efficiency. 07 Undoubtedly, there won’t be a mass adoption of cloud gaming in the near future. However, this path can begin with active use of the technology in the B2B market. After that, cloud gaming can be gradually scaled to the B2C area.
The gaming industry is currently undergoing a fundamental transformation driven by the social behaviors of Gen Alpha and Gen Z, over 90% of whom utilize gaming as their primary interactive outlet. This demographic shift has catalyzed the rise of User-Generated Content (UGC), artificial intelligence, and cloud infrastructure, collectively democratizing development and allowing indie titles to compete with AAA productions. The cloud gaming market is expanding rapidly, reaching nearly 400 million users within four years, while the integration of AI in gaming is projected to achieve a $4.2 billion valuation by 2029. UGC has emerged as a critical driver of retention, with dominant platforms like Roblox, Minecraft, and Fortnite accounting for 19% of total global playtime and distributing over $1.3 billion to creators in 2023. To overcome the technical and legal hurdles of content creation, the industry is increasingly turning to generative AI, a sector expected to reach $1.8 billion by 2025. These tools automate complex processes such as texture upscaling and level generation, lowering the barrier to entry for creators across diverse genres. While cloud technology offers the potential for real-time updates and massive concurrency, infrastructure limitations remain a significant bottleneck. Approximately 76% of players identify latency as a primary concern, suggesting that while 5G will eventually facilitate mass consumer adoption, the immediate utility of the cloud lies in B2B applications like secure playtesting and instant discoverability. The convergence of these technologies is ultimately moving the industry toward a live-service ecosystem of "endless games," where the boundaries between traditional media and interactive community-driven platforms continue to blur.
The industry snapshot reveals a workforce that remains predominantly male and White, yet shows growing diversity in gender identity, sexual orientation, and geographic mobility. Two‑thirds of respondents are male, 24 % female, and 8 % non‑binary, with 28 % identifying as LGBTQ+. The U.S. dominates the sample (54 %), and California remains the top state of residence, while Washington has experienced the largest influx. Most workers are under 35 (64 %) and concentrated in design, programming, and visual arts roles. Layoffs continue to be a significant concern, especially within AAA studios where two‑thirds of respondents report company layoffs and nearly one in five have been personally let go. Indie studios experience fewer corporate cuts, yet a higher proportion of individuals report personal layoffs. Roughly half of all respondents anticipate no layoffs in the next year, but those with prior layoff experience express greater uncertainty. Generative AI elicits polarized views: 42 % see it as a productivity catalyst, while 38 % view it as ethically problematic and potentially job‑threatening. The debate centers on balancing efficiency gains against concerns over originality, labor displacement, and environmental impact. VR/AR/MR remains a niche segment, with only 8 % of respondents engaged in such projects. Meta Quest/Horizon dominates the market, and accessibility features are widely adopted, though advanced options lag behind. Monetization trends show premium titles favor digital downloads and physical copies, whereas free‑to‑play games rely heavily on in‑app purchases for currency and cosmetics. Crunch culture persists, with 87 % of workers clocking overtime in the past year and over half citing essential work or self‑pressure as drivers. Union support is strong in the U.S., with 82 % backing unionization and a majority expressing interest, though leadership opinions are slightly more divided.
The 2026 mobile marketing landscape is defined by a fundamental transition from media-centric targeting to creative-driven acquisition, necessitated by tightening privacy constraints and the saturation of traditional advertising channels. Competitive advantage now hinges on the speed of creative iteration and the ability to unify product development, monetization, and distribution. By leveraging early behavioral signals to predict long-term value, industry leaders are successfully aligning short-term performance metrics with sustainable user lifecycle growth. This evolution is supported by a strategic shift toward AI-powered personalization and behavior-driven gamification, as non-gaming applications increasingly adopt the engagement tactics traditionally reserved for the mobile gaming sector. Data from 2025 reveals a period of significant market consolidation, marked by a 16.7% decline in active advertisers alongside a 73.3% surge in creative output per advertiser. Playable ads have emerged as the premier format, consistently yielding the highest attention duration, scroll-stop rates, and conversion metrics. While the AI app sector experienced a sharp 48% contraction in the number of advertisers, top-tier players have responded by aggressively scaling localized marketing efforts. Simultaneously, the finance and health sectors have maintained greater stability, focusing on service-centric, medical-grade solutions and persuasive, value-based messaging to capture mature markets in North America and Europe. Global strategies for 2026 prioritize a balanced media mix, typically favoring video content, while emphasizing hyper-local operations in emerging regions like Southeast Asia and the Middle East. Success in these diverse markets requires intensive user education and culturally nuanced, scenario-based ad updates. As the industry moves toward subscription-based models and on-device AI integration, the focus has shifted from mere technological development to the large-scale monetization of AI-enhanced user experiences. Ultimately, the market is moving toward a future of highly segmented, interactive, and performance-driven advertising that prioritizes technical precision and regulatory compliance to foster long-term user trust.
The mobile app industry entered 2026 with significant momentum, characterized by a 10% year-over-year increase in global installs and a 7% rise in sessions throughout 2025. Consumer spending reached a record $167 billion, signaling a robust digital economy. This growth coincides with a fundamental technological shift where artificial intelligence has transitioned from an experimental feature to essential infrastructure for predictive segmentation and data analysis. Furthermore, the industry is moving away from a strictly mobile-first approach toward multi-platform strategies designed to capture fragmented consumer journeys across various devices. User privacy sentiment is also stabilizing, with App Tracking Transparency opt-in rates climbing to 38% by early 2026. Sector-specific performance reveals a complex landscape of engagement and acquisition costs. While the global gaming population reached 3 billion in 2025, overall gaming installs remained flat as the cost per install rose 30% to $0.56. However, casual games outperformed the broader market with a 19% increase in installs and a 37% surge in sessions. In contrast, the e-commerce sector faced challenges as global installs fell by 10%, though Latin America emerged as a significant growth outlier with a 30% increase in user engagement. These trends suggest that while user acquisition is becoming more expensive in mature categories, specific genres and emerging markets continue to offer high-velocity growth opportunities. The finance sector demonstrated unique resilience, with sessions increasing by 21% despite a slight decline in installs, reflecting the deep integration of digital wallets into daily consumer habits. Finance apps also led the shift toward paid acquisition, achieving a paid-to-organic ratio of 1.13 as costs per install decreased in most regions. As the industry moves through 2026, success is increasingly defined by retention-led growth and sophisticated cross-channel attribution. Future scalability will depend on the ability of developers to leverage AI-driven personalization and cross-device measurement to maintain engagement in an increasingly competitive and fragmented global market.