Niko Partners is celebrating its 22nd anniversary of providing high integrity data, insights and analysis as local experts with global expertise. In 2024, Niko Partners continues to cover five regions: China (Mainland China), East Asia (Japan and Korea), Southeast Asia (Indonesia, Malaysia, the Philippines, Thailand, Vietnam and Singapore), South Asia (India) and MENA (Saudi Arabia, United Arab Emirates and Egypt).
Niko is in constant pursuit of higher excellence every year, and we achieve it. To that end, we are publishing our forecast accuracy that we conduct on our internal model. Most firms would not disclose their accuracy, but at Niko we are proud of the results. We can say that overall, our 5-year forecast is within 10% of the actual market value. This is very strong. Our 1-2-year is even stronger, less than 5% off of the actual.
The data below reflects the delta in the accuracy of our forecast. Our 5-year mobile revenue forecast was 8.3% higher and PC revenue forecast was 8.8% higher than the actual market in 2023. We added Korea, Japan, MENA and India in the past few years and they were not included in the 2018 5-year forecast. India, which Niko began modelling 3 years ago, is showing really exciting growth prospects and will be one that will be interesting to keep an eye on over the next decade.
*Note: Negative numbers denote our forecast was higher than actual, positive numbers denote our forecast was lower than actual. Forecast years 0-3 include all of Greater Asia, which refers to East Asia (Japan and Korea), Southeast Asia (Indonesia, Malaysia, the Philippines, Thailand, Vietnam and Singapore), South Asia (India), and China while forecasted years 4-5 include Southeast Asia + China.
Asia & MENA predictions
Asia & MENA to account for over 60% of global PC & Mobile games revenue
Niko Partners has ongoing market coverage on Mainland China, East Asia, Southeast Asia, South Asia and MENA, which in aggregate accounted for over half of total global spending on video games. When isolating PC and mobile games, these markets have hovered around 60% of global player spending. We believe that growth from all markets, but especially India, Indonesia and Egypt, will push these markets to over 60% of our estimate of the worldwide PC and mobile games revenue in 2024.
A deal valued at more than $2.5 billion, in top 10 of all time, will happen
There was a sharp decline in the total number and value of video game related mergers and acquisitions in 2023 as macroeconomic headwinds (including interest rates), strategy shifts and weaker performance in new technology sectors impacted deal-making. Niko Partners anticipates a recovery for video game related M&A in 2024, with at least one deal with a value of over $2.5 billion. This would qualify it as one of the top 10 largest video game related M&A deals of all time. We expect the buyer or target company to be based in Asia or MENA.
Instant games will reach over 1 billion MAUs in Asia & MENA
Super apps such as TikTok, Facebook and WeChat are placing a larger emphasis on instant gaming through mini games and cloud games. While games on these platforms have traditionally been in the hypercasual genre, we are starting to see players embrace hybridcasual titles through instant gaming platforms, which monetize through both ads and IAPs. We believe these games will be accessed by over a billion users in 2024 and encourage the conversion of non-paying users to payers.
New console hardware will be announced in 2024
2023 was a strong year for console gaming as hardware supply returned to normal levels and multiple high quality AAA titles launched. Niko Partners predicts that console-hardware momentum will continue. We anticipate that Nintendo will announce a next-gen console, PlayStation to announce a mid-generation console, and a new entrant in the dedicated PC gaming handheld segment.
Generative AI gaming will be implemented on top of AIGC development
Generative AI (AIGC) became the hottest topic of 2023 and many game companies are already utilizing the technology to support professional game development. However, its utilization across this aspect requires a rethink of game design principles, user acceptance and poses legal concerns. Instead, we believe the most talked about games in 2024 will implement AIGC to enhance user interaction and experience by including new ways to interact with gameplay systems, NPCs and UGC. High costs of implementing AIGC for gameplay may make this prediction hard to come true this year.
The new global esports landscape isn’t centered in the west
By early 2023 it was clear that the sports bubble had popped. In response, teams, leagues, and sponsors have taken a more cautious and sustainable approach to investment. Esports will have a lower impact in the US and Europe and a growing impact in Asia, MENA, and LATAM. MENA will continue to grow as an esports business and events hub. Mobile, which is the leading esports platform in Asia and LATAM, will continue to grow in these markets, while PC esports, which were favored in the west, will remain in decline.
Mobile-first game developers will embrace a cross-platform approach
Niko Partners observed an increase in cross-platform game development and introduction of cross-save functionality in video games over the past few years. In 2024, we predict mobile game developers to take more of a platform agnostic approach to game development with the aim of reaching a broader userbase. While this will involve traditional ports to PC and console, we also expect mobile game developers to explore mini game platforms, web browser versions and cloud gaming platforms, allowing gamers to discover, jump in and play on any device.
Blizzard will re-enter China in an official capacity
Niko Partners predicted last year that Activision Blizzard would announce a new partner for the China market in 2023, with its games re-launching in 2024. While a new partner was not announced, the company did release some of its games on the international version of Steam, allowing Chinese players to access the titles. In 2024, we expect Blizzard to finally announce an official return to the China market and re-launch its games.
More than 100 import games will be granted an ISBN for release in China
China’s video game regulator, the National Press and Publication Administration, issued game licenses for 98 imported titles in 2023, up from 44 in 2022, 78 in 2021 and 97 in 2020. While import game approvals have yet to return to highs seen in 2019 or 2017, we see a positive trend for game approvals in 2024. Niko Partners anticipates more than 100 titles from overseas game companies to be approved in 2024, including games issued a license through the domestic approval process as a result of having a China based developer, publisher and IP license agreement.
Governments in Southeast Asia & India will actively support games industry growth
Each market in Asia & MENA has taken a different approach to regulating the growth of the video games industry over the past year. Saudi Arabia has actively promoted the growth of the industry through various initiatives while China has opted for a managed growth focus by targeting certain business practices. In 2024, we expect governments in Southeast Asia and India to take a more active role in removing barriers for video game companies and providing a more robust framework alongside various incentives that encourage games industry growth. Indonesia’s upcoming Presidential Decree on accelerating domestic games industry growth is just one example.
Out of App Monetization will account for 25% of mobile games spending in Southeast Asia
As legislation continues to favor the opening up of walled gardens for mobile platform holders, we see an opportunity for mobile game publishers to generate higher revenues from alternative monetization strategies including out of app monetization. As pressure continues to build, Apple and Google are likely to make further concessions this year, leading to an increase in revenue generated from alternative app stores, out of app monetization and other alternate payment channels. This currently accounts for 21% of player spending on mobile games in Southeast Asia, with the remaining 79% generated through the Google Play and Apple App Store.
The ratio of female gamers in India and MENA will increase in 2024
Niko research shows, when excluding mainland China, 46% of gamers in Asia & MENA are female. However, this drops to 34% when we isolate India, Saudi Arabia, Egypt and the United Arab Emirates. With increased initiatives for women gamers in these markets, more inclusive games, and a 2x faster growth rate for female gamers compared to male, we project that female gamers will account for a larger share of the gaming population in 2024.
How did we do in 2023?
Niko Partners made 16 predictions for 2023 which you can find here. Here’s an overview of some of our key predictions from last year and how they fared:
Mobile, PC and console games will embrace hybrid monetization – Generally true although advertising has yet to emerge on console.
Game related M&A deal value will dip significantly in 2023 – True: There was a sharp decline in deal value.
We anticipate imported game titles in Mainland China to receive ISBN licenses in 2023 for the first time since June of 2021 – True: This happened early in the year.
Blizzard will re-enter China after it ends its partnership with NetEase in January – False: Although we originally didn’t expect the games to re-launch until 2024, so this is now our prediction for this year.
VTuber industry to become more intertwined with Japan’s games industry – True: Hololive even created a game brand.
Korean game rating agency will likely restructure following the scandal of 2022 – True.
Blockchain games to decline in Southeast Asia – True.
More than ten international game companies will open offices in MENA – False .
Esports tournaments will be held in a hybrid online/offline manner – True.
Mobile shooters will drive esports growth in 2023 – Half true: Although PUBG Mobile remains king and Valorant Mobile is not a factor yet.
For over two decades, we’ve delivered local strategic planning for development and go-to-market actions for developers aspiring to succeed in Asia & MENA markets.
Photo by Jen Theodore on Unsplash