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1. MENA-3 games market revenue will exceed $2 billion in 2022

Niko Partners launched coverage of Saudi Arabia, United Arab Emirates and Egypt for the first time in 2022. We refer to this region as MENA-3 in our reporting and expect combined gaming revenue across all platforms to exceed $2 billion this year. Growth will be driven by higher spending per user, additional government support in gaming and esports, and more gamers entering the market.

2. India will have over 400 million gamers in 2022

We expect India to exceed 400 million gamers this year, which is more than a quarter of the total number of gamers in Asia. We also believe that India, the fastest growing market in Asia, will be the next market to reach $1 billion. Niko Partners has often talked about how the ITV Markets, referencing Indonesia, Thailand and Vietnam, will be the next billion dollar gaming markets. These three markets have individually exceeded $1 billion in the past two years.

3. Game approvals in China will restart in early 2022

China’s video game regulator hasn’t approved any new titles since July 22, 2021. There were only 755 titles approved in 2021, down from 1,411 in 2020. identification of real names now complete, we expect approvals to resume in early 2022.

4. China’s regulatory approach will shift from reform to enforcement

China’s video game regulator introduced new policies in 2021, primarily aimed at tackling underage gambling addiction. We expect the regulator to move away from policy reform in 2022 as it seeks to ensure compliance with current regulations. We are already starting to see a crackdown on companies that limit regulations and we have raised the risk of a China Steam International ban to a high.

5. Game companies in China will focus more on exports

Chinese game companies have dominated their domestic market and succeeded overseas with mobile games. With increased investment in AAA game development, local independent studios, and ongoing regulatory risk in the country, we expect Chinese game companies to start seeing success across all platforms overseas in 2022. and beyond.

6. Esports will become more legitimate in 2022

In 2017 the International Olympic Committee recognized esports as a sport, in 2018 esports was a demonstration event at the Asian Games in Jakarta, Indonesia and in 2022 esports will be a medal event at the Asian Games in Hangzhou , in China. This will lead to more investment in esports player pipelines and player development. 2022 will see increased esports training, education, grants for esports management, player development.

7. Cross Platform and Cross Play will be a staple of new titles in 2022

The success of cross-platform titles such as Genshin Impact, the widespread adoption of scalable game engines such as Unreal Engine and Unity, and the demand for interoperability between devices has led gamers to value cross-platform experiences with cross-play. We expect some of the biggest game studios in China, South Korea, and Japan to release titles that work on PC, console, mobile, and cloud with crossplay enabled.

8. 5G will be available in the 14 markets we cover in 2022

5G has rolled out in many markets in Asia since South Korea launched 5G services in April 2019. This has helped increase download speeds, reduce latency and enable cloud gaming moving. Malaysia, Vietnam, India and Egypt are the four markets we cover that have not yet deployed 5G. We expect them to start rolling out by the end of the year.

9. M&A / Investments / IPOs will continue to play an important role

2021 has been a banner year for gambling-related investments, especially in China where the number of transactions doubled compared to the previous year. Tencent alone invested in or acquired more than 100 gaming-related companies last year. We expect mergers and acquisitions/investments to continue to play a notable role in 2022 and beyond as the value of intellectual property, developing talent and new technologies becomes more important. Although there may be a lower number of closed deals in 2022, we believe the overall value will remain high.

10. Game companies will capitalize on the metaverse trend better than tech companies, but it’s still too early for the concept

Metaverse has become a hot word in 2021 with many tech and gaming companies embracing the concept. Niko Partners believes that live service video games have been moving towards the metaverse concept for several years and that companies with experience in both video game development and the operation of social media platforms will have an advantage when they will enter this space. We expect gaming-focused companies to see the early benefits of the metaverse trend, while tech-first companies will struggle to deliver value to users. However, we don’t expect to see a true metaverse experience in 2022 based on currently accepted definitions.

11. The convergence of video games and the entertainment industry engages gamers more

The video game industry relies on the concepts of metaverse, panentertainment and transmedia which lead to a convergence between gaming and entertainment. We expect to see more traditional brands, entertainment properties and artists leveraging live service games in 2022. On the other hand, we expect to see more collaboration between IP owners of video games and traditional entertainment such as movies, television and comics. This two-way approach will engage players more in the future.

12. Adoption of Blockchain games is growing, but the space is still experimental

Blockchain-based games grabbed headlines in 2021 and VCs have invested billions in it. The past year has seen the rise of blockchain-based non-fungible tokens (NFTs) in games and the exploration of the Play to Earn (P2E) model. We expect to see new innovative game projects in 2022 and increased adoption of blockchain games. However, the many barriers to entry, lack of regulation, and sustainability issues will keep space experimental in 2022.

13. The local game development scene will grow in developing markets

Of the 14 markets we cover, Japan, South Korea, and China are considered game development powerhouses due to the hit titles released by domestic developers. The success of Vietnamese studio Sky Mavis (publisher of Axie Infinity) and the doubling of local game development studios in India since 2019 show that there is more and more talent in these emerging markets. We expect to see the release of a hit game (over $100 million in revenue) from a Southeast Asian or Indian studio in 2022.

14. The Conversation About App Store Usage Rates Will Continue Through 2022

The Epic v Apple case made headlines in 2021 and indirectly led Apple and Google to reduce take tariffs for developers who earn less than $1 million per year. In South Korea, a new bill required Apple and Google to offer alternative payment options in the app. In China, TapTap has grabbed headlines for offering 0% uptake, and many developers have invested in direct distribution to avoid app store fees. As the pressure continues to mount, we expect platform holders to make further concessions in 2022.

15. Increase government support for local game development through SEA

In 2021, governments have become increasingly favorable to the video game industry. The Vietnamese government has played an active role in the establishment of the Vietnamese Alliance of Online Game Developers and Publishers (which will be officially established in 2022), the Indonesian government has shown its support for local game developers through funding and infrastructure support, and the Malaysian government continues to allocate a dedicated national budget. for gaming and esports. We expect more of this in 2022.

16. Korea and Japan will pursue deregulation of the gaming and esports industry

Following Korea’s abolition of the 10-year-old shutdown law and given Japan’s growing interest in esports, we anticipate that both countries will continue to relax regulations or even steer towards the deregulation of certain laws or ordinances that impede the growth of gaming and esports. industry. Although an overhaul of the regulatory environment is not feasible, small changes may occur in 2022.

Check the accuracy of our 2021 forecast here. All of our predictions came true, except for #7, as a freeze on game approvals in China resulted in fewer imported games being approved in 2021 compared to 2020.

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