After two flourishing years, the sector experienced a cooling period in 2022, with a market decline of 4.3 %. In question: the resumption of inflation and the shortages of semiconductors, which weighed on the production of consoles.
by Vincent Fagot
The start of the year is difficult for the video game industry. One after the other, the publishers find the fall in their income and envisage job cuts, whether in the American Microsoft or the Chinese tence. Same tone at Ubisoft, the Frenchman having announced, on January 12, plan sales down “more than 10 %” for the financial year 2022-2023 compared to the previous year, highlighting “the deterioration of macroeconomic conditions “. Another negative element: the new postponement of the game “Skull and Bones”, initially scheduled for November 2022, while Aubisoft also said that it has stopped the development of three “not announced” projects, in addition to the four stops already communicated in July 2022 .
To this situation is added a deterioration in relations within the company. Friday, January 27, Ubisoft employees were called to a strike movement by their unions to denounce the managerial practices of the management.
“Some publishers had swelled market growth”, interpreter Charles-Louis Planade, financial analyst at Midcap Partners. Indeed, after two years of euphoria marked by the development of entertainment at home during the confinements linked to the pandemic of COVVI-19, the video game experienced a cooling period in 2022, with a decrease in the market of 4.3 %, at 184 billion dollars (169.5 billion euros), according to the specialized firm Newzoo . The trend is even more marked for the mobile game sector (- 6.4 %), which alone concentrates half of industry income.
The resumption of inflation, the shortages of semiconductors who have weighed on the production of consoles, the growing distrust of technological values justify this state of affairs. If Newzoo relies on an average annual growth in the sector of 3.4 % until 2025 (compared to 7 % in 2021), the year 2023 should see the sector again on new bases.
In 2022, the number of mergers and acquisition operations flew, with a record of 1,300 operations, for a total amount of $ 127 billion, three times more than in 2021, according to The Drake Star cabinet . However, the main of them, the acquisition announced in January of Activision Blizzard by Microsoft for an amount of $ 68.7 billion, seems more and more fragile.
The authorities American , European and British competition have seized the case and seem ready to have it curved. It had to allow the Xbox’s parent company to get their hands on prestigious licenses like Call of Duty, World of Warcraft or Candy Crush. As a sign of good will, the Redmond (Washington State) firm assured that Call of Duty would be available for ten years on Sony platforms (PlayStation), Nintendo (Switch) and Steam. On the old continent, arbitrations are expected in the first half of 2023.
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