Reports of the week:
ABRA Games: Brazilian Gaming Industry in 2023
GSD & GfK - European gaming market for PC and consoles grew well in March 2024
StreamElements & Rainmaker.gg: State of the Streaming market in March 2024
Game Sales Round-up (03.04.24 - 16.04.24)
game: The German Gaming Market almost reached €10B in 2023
Konvoy Ventures: Investments in the Gaming Industry in Q1'24
UKIE: The British gaming market in 2023 grew by 4.4%
Famitsu: Final Fantasy VII: Rebirth topped the March retail chart in Japan
Game Developer Collective: 70% of developers are not confident in the sustainability of the GAAS model
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❗️In the report - besides the classic gaming companies - developers of educational games, "serious” games are also featured. Therefore, the picture becomes a bit blurry. It is worth taking it with a grain of skepticism.
Industry surveys show that by the end of 2023, 1042 gaming companies were operating in Brazil. This includes all studios showing activity - being part of associations, having games on accounts, having legal entities, and so on.
309 gaming companies participated in the ABRA Games survey. 98 of them were exclusively involved in game development; 211 were also engaged in other activities. Mainly - art outsourcing (28%); gamification (24%); animations (23%).
3% of companies in the Brazilian market have been in existence for over 15 years; 14% - from 10 to 15 years; 28% - from 5 to 10 years; 35% - from 2 to 5 years; 19% - less than 2 years.
❗️The percentage of mature companies present in the market for more than 5 years decreased in 2023 compared to 2022. ABRA Games notes that this may be due to sample peculiarities - in 2023, some companies did not participate in surveys due to investment deals.
93% of Brazilian developers work on their own IP. 15% work on transmedia projects; 13% - on the IP of other companies; 10% - license external IP.
Most game companies in Brazil are located in São Paulo (302) and Rio de Janeiro (107).
Games from Brazilian developers
The number of released games is increasing. In 2022, 1009 projects were released by Brazilian developers. For comparison, in 2020 there were 715.
58% of developed games in 2022 are games in the classical sense. 18% - "branded" games (Advergames); 17.5% - educational games.
❗️A significant share of games for brands and educational projects looks atypical. Perhaps, it's the market's specificity.
25% of projects are developed for PC; 25% - for smartphones; 23% - for the web; 18% - for consoles; 8% - for VR/AR devices.
80% of studios work on Unity; 26% - on Unreal Engine; 7.8% use Construct; 5.5% - GameMaker; 5.5% - Godot.
According to ABRA Games estimates, 13,225 people are working in the gaming industry in Brazil. Growth compared to last year is 6%.
70% of employees in Brazil work remotely; 16% - in a hybrid format; 14% - in the office.
74.1% of employees are men; 24.4% - women, and 1.5% - non-binary individuals.
80% of Brazilian studios have multilingual employees.
Game sales
A total of 15.9 million copies of games were sold in Europe. This is 35% more than in March of last year.
Sales for the first quarter are up 9%. This is better than what many analysts predicted.
❗️These figures do not include Palworld sales, so the actual picture is even better.
Helldivers II lost its lead to EA Sports FC 24, but the project's sales are still strong.
Five parts of the Command & Conquer series appeared on the European chart at once. EA's mass attack on Steam was successful, with C&C: Generals taking the 4th spot in March sales in Europe. The project is 21 years old.
Dragon’s Dogma II started from the 3rd spot. Its sales are comparable to Final Fantasy VII: Rebirth after 2 weeks, but the game was released on PC and Xbox.
317 thousand consoles were sold in Europe in March - 27% less than the previous year. This does not include the German market.
PS5 sold 31% worse than in March of last year but remained in the first place.
1.2 million accessories were sold in Europe in March 2024. This is 0.3% less than the previous year. DualSense is the leader.
Twitch views in the first quarter of 2024 increased by 2% compared to the fourth quarter of 2023, reaching 5.4 billion hours.
However, in March, the number of views dropped. This trend has been observed for 5 years.
Counter-Strike views increased by 53% thanks to PGL CS2 Major.
It is important to note the success of Supermarket Simulator, which received 17 million hours of views in March (15th place). The game was very well received by both streamers and the audience.
In terms of hours watched, GTA V (149 million hours - a 2% decrease), League of Legends (112 million hours - a 12% decrease), and Valorant (98 million hours - an 11% increase) continue to lead.
Gaules took the top spot in the streamer ratings in March with 16.3 million hours.
Dragon’s Dogma II sold 2.5 million copies in 2 weeks after the release. Total series sales reached 10 million copies.
Ranch Simulator reached 1 million copies sold on Steam. It's the most successful store simulator on the platform.
V Rising has been purchased over 4 million times. The game has been in early access since May 17, 2022; in 2024, the project will be released on PlayStation 5. The first million was reached within a week.
IDG Consulting experts report that Helldivers II started on par with Call of Duty: Modern Warfare II; Warzone and Apex Legends in terms of DAU (Daily Active Users).
Lo-Fi Games announced 2.3 million copies sold of Kenshi. The game was launched on the Epic Games Store; developers are also working on a prequel - Kenshi 2.
Sales of Crash 4: It's About Time surpassed 5 million. It took the game 4 years to achieve this.
The Outlast Trials has already been purchased over 2 million times. The game exited early access last month; and has been on sale since May 2023.
The launch of the Fallout series had a positive impact on the number of players in Fallout: New Vegas (3x increase in CCU); Fallout 4 (4.5x increase in CCU), and Fallout 76 (the game set a new CCU record). Figures are for Steam only.
Content Warning by Landfall Games sold 1 million copies, despite 6.6 million people claiming the game for free. The release - following the studio's old tradition - took place on April 1st. The game was initially available for free for some time.
Data provided by GfK and data.ai.
Revenue of the gaming industry in the country increased by 6% to €9.97 billion.
The sales of gaming hardware saw the strongest growth - by 7% (from €3.049 billion in 2022 to €3.265 billion in 2023); game sales increased by 6% (from €5.516 billion in 2022 to €5.845 billion in 2023).
Despite a large number of releases in 2023, the number of games sold decreased by 8%. However, revenue increased by 4%. Likely, people were more actively purchasing new releases in 2023 at a higher price point. Game sales reached €1.103 billion.
In-game purchases increased by 6% - reaching €4.742 billion.
Console sales in Germany skyrocketed by 44% in 2023; accessory sales for them increased by 32%. This is attributed to the availability of PlayStation 5 and (to a lesser extent) Xbox Series S|X. The explosive growth was offset by a decline in demand for gaming PCs (down by 17%) and PC accessories (down by 7%). According to Felix Falk, the managing director of game, people stocked up on these during the pandemic.
The segment of subscription services slightly decreased by 1% (from €867 million to €860 million).
❗️In 2022, subscription services in Germany grew by 20%. Many speculate that such solutions have reached their ceiling, but in Germany, since 2021, they have had the highest cumulative growth rate. It's better to look at the trend over a longer period. Growth has nearly stalled in the USA.
Market Overview
The volume of private investments in gaming companies in Q1’24 reached a nearly two-year high - $2.197 billion. $1.5 billion of this amount is attributed to a deal between Epic Games and Disney.
VC investments reached a one-year high, totaling $594 million. This represents a 94% increase compared to the previous quarter in terms of deal volume. A total of 124 deals were made (+28% compared to the previous quarter) - the highest in the past year since Q1’23.
In Q1’24, 80% of the total financing volume was accounted for by 23% of the deals. This is higher than in 2022 (19%); 2021 (12%); and 2020 (13%). This indicates a healthier situation in the investment market.
In terms of capital distribution at early stages (from pre-seed to Series A), the situation is even better - 80% of allocated funds were distributed among 31% of companies. This is the best performance since 2020.
In the first quarter of 2024, the ESPO (MVIS Global Video Gaming & eSports index) grew by 12.8%; the S&P 500 for the same period increased by 10.8%.
Public gaming companies have $35.3 billion in cash reserves. This is excluding the $267.2 billion held by technology companies with gaming divisions (Tencent; Sony; Microsoft).
The number of M&A deals in Q1’24 remained unchanged from the previous quarter - 40 transactions.
The largest VC deals of the quarter with technology gaming companies are Splash Sports ($14.1M - Series A); W4 Games ($14.1M - Series A); Elixir Games ($14M - Seed).
The largest deals with content producers are Build a Rocket Boy ($110M - Series D); Second Dinner ($100M - Series B); Parallel ($35M - Series B).
VC Investment Distribution by Region
In terms of volume, $318 million went to North America; $160 million to Europe; $85 million to Asia; $32 million to Australia.
In terms of the number of deals, Asia leads (54 transactions), followed by North America (47 deals); Europe (19 deals); and Australia (3 deals). There was also one deal in Africa.
The volume of deals in North America reached an annual high (increasing by 111% compared to the previous quarter). The number of deals also increased.
In Europe, the situation is similar - reaching an annual high and a 113% increase in deal volume compared to the previous quarter. The number of deals increased by a quarter.
The number of deals in Asia is the highest since Q4’22, but the volume is $85 million (only lower in Q2’20). This is due to the fact that the size of most transactions was not disclosed.
74% of Australia's total investment volume in 2023 occurred in Q1’24. The number of deals (3) is the highest since Q3’22. This is due to deals with Halfbrick Studios and Illuvium.
There have been no announced VC deals in South America since Q2’23.
In Africa, there was 1 VC deal in Q1’24 - Carry1st raised funds from the Sony Innovation Fund; however, the deal size was not disclosed.
There are increasing candidates for IPOs in the market. The main candidates are Epic Games; Discord; Improbable; Niantic; Dream Games.
The possible ban of TikTok in the USA. If it happens, it will significantly affect the advertising market and the trust of companies in the USA.
Major brands are actively investing in games. Disney invested in Epic Games; Mattel launched its publishing; Warner Bros. plans to release several GAAS projects.
Apple continues to face pressure from governmental bodies of various countries demanding to allow third-party stores on iOS.
Apple Vision Pro did not revolutionize the VR/AR market.
Small developers are successfully showcasing themselves in the market. Examples include Palworld; Last Epoch; Lethal Company; Enshrouded.
The total volume of the gaming market in the United Kingdom in 2023 amounted to £7.82 billion. This is 4.4% more than in 2022 (£7.49 billion).
£5.18 billion of this amount is attributed to content sales. This segment grew by 4.1% compared to the previous year.
Digital content sales on consoles increased by 5.6% to £2.48 billion; on mobile devices, the growth was 4.5% - reaching £1.52 billion; a similar percentage growth on PC (+4.5% YoY) - reaching £684 million. However, sales of physical game copies dropped by 5% - down to £495 million.
Gaming hardware sales in the UK in 2023 grew by 4.1% and amounted to £2.22 billion.
Console sales increased by 12% to £951 million; VR devices - by 11% to £194 million; console accessories - by 3% to £402 million. Sales of gaming PCs decreased by 11% to £673 million.
For the first time, UKIE accounts for TV Series; Films, and sountracks related to gaming IPs - the combined revenue of all transmedia products amounted to £418 million (there is a typo in the infographic).
Toy and merchandise sales grew by 3.8% - reaching £207 million; books and magazines - by 2.5% to £14.1 million. Gaming events saw a significant increase after lockdowns were lifted - they grew by 140% to £10.3 million. Movies, series, and musical works related to games earned £124 million. The streaming market slightly declined by 5% - down to £62.8 million.
❗️Without IP-based films, TV-series & soundtracks, the market growth might’ve been 2,8%.
Famitsu only takes into account sales on physical media.
Game sales
Final Fantasy VII: Rebirth boxed copies were purchased over 310 thousand times. This is the second place in the history of new releases sales for PS5 in the country in the first month, surpassed only by Final Fantasy 16 - 336 thousand copies.
Technically, in second place is Unicorn Overlord from Atlus. The game was purchased 62 thousand times on Nintendo Switch; 34.2 thousand copies were sold on PS5 and 14.5 thousand on PS4. In total - 111 thousand copies sold.
But in the chart, in second place is Princess Peach: Showtime - the game sold 105 thousand copies after two weeks. The thing is in the counting specifics, all sales of the project came from one platform - Nintendo Switch.
Rise of the Ronin showed decent sales - the game was purchased 85 thousand times; Dragon’s Dogma II - 78 thousand copies sold.
For the first time since October 2021, the entire top 5 in Japan consists of new games.
Nintendo continues to be the largest publisher in the market; the company's share accounted for 44.3% of all physical sales in March. Square Enix - 8.8%.
At the same time, in revenue terms, Square Enix ($20.1 million) surpassed Nintendo ($18.8 million) in March, ending its 8-month leadership in this indicator.
Nintendo Switch accounted for 57.6% of all physical game sales; PlayStation 5 - 35.7%.
In March, almost 290k Nintendo Switch units were sold; PlayStation 5 had a little bit over 162k.
From February to March 2024, 600 developers were surveyed.
Live-service projects are defined as games that have high update frequency (67%) and microtransactions (53%).
31% are deeply concerned about the long-term sustainability of the GAAS model; 39% have some concerns; 25% of developers believe that service games are doing well. The rest are undecided.
The main problems with GAAS games are cited as user fatigue from this type of projects (63%); competition from other GAAS games (62%); increasing user acquisition costs (47%); rising development costs (34%); competition from other forms of entertainment (20%) and loss of interest from investors (12%).
45% of developers believe that GAAS games harm the industry. 44% have mixed feelings about this.
In front of doubts, developers have shown increased interest in good old DLCs. 30% of respondents said they want to use this type of additional monetization in new games (9 percentage points higher than now). Also, the number of developers wanting to sell their games has increased by 4 percentage points (a shift from the F2P model). The number of physical releases continues to decline.
