The future of gaming

Navigating from gameplay to payday in the coming era of gaming

What might the future of gaming look like?

City-scale gaming that blends physical and digital environments, engaging local and remote players.
Hybrid citizens interacting via official digital avatars in a unified economy.
Advanced computational power that offers instant data exchange across devices and virtual realities.
The gaming sector is booming... with global reach and stakeholders ranging from media giants to investors to policymakers. Strategy& presents this in-depth look at the prevailing trends, providing key insights for those seeking to understand and excel in this evolving sector.
1 Growth in play-to-earn models
Enabled by the blockchain, play-to-earn (P2E) helps amateur gamers monetize their playtime.

What’s trending

Enabled by blockchain, the Play-to-Earn (P2E) model is eroding outdated stereotypes of gamers and showcasing gaming as a viable pursuit. Novices and esports pros alike can earn via gameplay, trading in-game assets, or by achieving specific milestones. The adoption of Non-Fungible Token (NFT) technology also gives gamers genuine ownership of in-game assets, fostering peer-to-peer trading and enriching massive multiplayer games' ecosystems. This potential for earnings draws a wider spectrum of players so developers can shift resources from traditional advertising to what really matters to users… the experience. It’s not just the future of gameplay—it's the future of the gaming business.

Why it matters

Play-to-Earn facilitates the seamless integration of gamers into the broader economy, dismantling the misconception that gaming is a pursuit of the unproductive. It also enables sector regulators to recognize the potential and value within the gaming community, elevating its participants by fostering economic inclusivity and creating opportunities. This innovative model not only casts gaming in a new light, it showcases it as a hub of productivity and creativity.

Examples:

  • Axie Infinity: A digital pet simulator to buy, battle, and breed creatures called Axies and earn crypto tokens as rewards
  • Animoca Brands Sandbox: A virtual world to create, buy, and trade land, where gamers have ownership of all material created

Play-to-earn NFT games market size 2028F

USD 8.9bn

2Formalized career paths for esports athletes
Esports athletes are forging their own path post-retirement, with growing government efforts to support and extend gaming careers.

What’s trending

Born of small local events, today’s esports electrifies jam-packed stadiums, growing its global acclaim and influence. Elite gamers have become superstars, amassing wealth through endorsements, streaming, and prizes—equivalent to their counterparts in conventional sports. Another important shift involves efforts to extend the typically short careers of players—ending around age 24—by offering roles in management, coaching, and broadcasting. With support from governments, university scholarships, and international reach, esports has solidified into a viable career choice. And the industry benefits as well. By cultivating meaningful pathways for esports athletes beyond their active years, the industry not only secures a continual influx of player talent but a stable of experienced professionals to lead the industry in the long run.

Why it matters

By formalizing career paths in gaming, federations and policy makers can provide lasting, lucrative careers to esports players. These include roles in coaching, management, and broadcasting. Consequently, educational institutions can develop gaming-related curricula in response to the growing demand, further establishing gaming as a legitimate career.

Examples:

  • Saudi government: Launched a game studio and esports academy as part of the NEOM smart city and formalized career tracks for sports athletes. Arab FIFA pro Mosaed Al-Dossary, for example, transitioned to team management and ownership.
  • Indian government: The union education ministry is working on a plan to offer job opportunities to Indian students interested in playing online games (game designer, developer, tester, animator, etc.).
3 AI-driven transformation in gaming
Generative AI is leading a disruptive wave, marking a shift in how games are created, experienced, and perceived.

What’s trending

In the gaming world, generative AI is ushering in an era where boundaries are reimagined and players no longer just play; they co-create. Dynamic worlds evolve with each decision, crafting personal journeys and resonating deeply with diverse audiences worldwide. New experiences are found within each session transforming multiple replays into endless discovery. For developers, it’s still about efficiency in content creation, building, and testing; but now with significantly greater opportunities for creativity. As the industry stands at this juncture, gaming’s horizon isn't just about technical advancements, but a future rich with shared stories waiting to be told.

Why it matters

For developers, generative AI is revolutionary, slashing development costs and freeing space for unparalleled creativity and storytelling. For investors, it unveils novel opportunities that enhance valuations and reveal untapped avenues in game development. And for policymakers, it forces a pivot regarding talent development, with sector growth more reliant on storytellers and designers than coders.

Examples:

  • GET3D: Generates high-quality 3D shapes for virtual words
  • Convai and NVIDIA: Testing AI-driven conversations in video games
  • Latitude Voyage: Games allow users to craft their personalized adventures using text
  • Nemesis System: Made NPCs highly intelligent in the Lord of The Rings game, Shadow of Mordor
4 Expansion of gaming-as-a-service
Bundling cloud and non-cloud games under subscriptions is driving new gaming ways-to-play.

What’s trending

Gaming as a Service (GaaS) is more than a trend; it's a holistic opportunity for the gaming community at large. Here, indie developers and gaming giants coexist, leveraging predictable revenue and continuous interaction across games to drive precise marketing and rapid, player-focused developments. Barriers to play like expensive hardware are gone, replaced by a device-agnostic ecosystem where players dive into diverse and extensive game libraries. And opportunities for bundling with music and movies make choices seem limitless. With each click, quest, jump, and score, platform and player evolve together, crafting experiences that resonate deeper, and strengthening their commitment to a shared entertainment journey.

Why it matters

Leveraging subscription-based models, non-gaming entities like telcos, techcos, and media firms can effortlessly integrate gaming as a new vertical, enriching their comprehensive media offerings. This trend not only expands their service repertoire but also unlocks unprecedented opportunities to enhance consumer relationships and establish footholds in the flourishing gaming domain, driving innovation and growth. This inclusive approach also empowers companies to transcend traditional boundaries and embrace diverse entertainment landscapes.

Examples:

  • Traditional gaming companies offering subscriptions: Playstation, EAPlay, Xbox Game Pass
  • Non-gaming companies entering the arena: Netflix and Apple Arcade with non-cloud offerings, as well as Nvidia with its GeforceNow cloud service

GaaS market size 2027F

USD 18.4bn

5 Resurgence of handheld gaming devices
Handheld gaming devices are leading a resurgence through a focus on gaming and exclusive IP.

What’s trending

Handheld gaming devices are witnessing a resurgence, reshaping the gaming landscape with their dedicated controls, optimized performance, and specialized game libraries featuring unique IPs like Zelda and Mario. These devices, including hybrid models like the Nintendo Switch, offer localized multiplayer functionalities, fostering real-world interactions and fulfilling diverse gamer needs. The surge emphasizes the industry's shift towards advanced connectivity for seamless online experiences. It also presents a lucrative opportunity for mobile companies like Apple to tap into this flourishing market, diversifying and enriching their ecosystems. Ultimately, this resurgence of handheld gaming is a beacon of innovation, heralding a future brimming with unprecedented gaming experiences and possibilities.

Why it matters

The resurgence of handheld gaming devices will lead telcos to invest in technology improvements that provide the low-latency, high-bandwidth streaming that gamers demand. Mobile-first companies must also look to repurpose their devices as “gaming-first” by developing new features and services specifically for gamers. This might include a dedicated gaming mode, cloud gaming integration, and controller support. Only by adapting to this trend can telcos and mobile-first companies position themselves for ongoing success.

Examples:

  • Nintendo Switch & Lite: Introduced in 2017, the Switch is a hybrid console. The Lite is handheld-only. Both offer exclusive games like Mario and Zelda.
  • Valve's Steam Deck: Launched in 2021, this handheld brings PC gaming on-the-go, using an AMD APU and SteamOS
  • Apple iPhone 15 Pro/Pro Max: Announced in 2023, Apple's phone boasts AAA game capability, 4K display connectivity, and joystick support, challenging gaming giants.

Handheld gaming market size 2028F

USD 16bn

6 Streamlined royalties, open-source development
Indie developers are back, boosted by blockchain-enabled royalty collection, rising demand, and higher payouts.

What’s trending

A wave of changes is turning gaming into a more vibrant, democratized space. Royalty collection has been streamlined, with modern platforms championing transparency, ensuring creators earn fairly and promptly. This has ushered in a wave of fresh talent, from budding hobbyists to seasoned pros. More developers means more options for consumers, amplifying community engagement and lowering prices. Open-source platforms, developer collaboration, and new tools are also helping creators iterate and launch faster, adding a steady stream of fresh ideas to the gaming scene. In this invigorated atmosphere, the gaming industry is set to flourish like never before.

Why it matters

Harnessing this trend can empower a grassroots gaming developer scene. And with the right investment and infrastructure from policy makers, that scene can flourish into a self-sustaining ecosystem. This bolsters local creativity, ensures a thriving community of developers, and enriches the cultural and economic landscape.

7 Localization of playable content
Enhanced game localization links global audiences to diverse cultures and cities.

What’s trending

With the help of game localization and VR, cities and their cultures can open their doors to the world. Real estate developers can use city-focused VR to broaden their reach, letting them tap into new markets and offer players meaningful cultural journeys. City/country authorities can shine a spotlight on their region's traditions and history, potentially giving tourism a boost. But it’s not just about reaching further—it’s about fine-tuning marketing to hit the right notes locally, building stronger brands and increasing competition among them. It’s about creating happier users and sparking partnerships across cultures, using games to highlight real places and real people.

Why it matters

With VR, real estate developers have a powerful tool for showcasing real estate locations in great detail. VR also lets city/country authorities highlight a region’s culture and history, which can boost tourism and make cities and landmarks more notable. It’s a platform that goes beyond games to enhance the visibility and economic prospects of an area.

Examples:

  • Mission 828 by EMAAR: A game where players must prevent a cyber attack and parachute from the Burj Khalifa
  • Insomniac’s Spiderman: A game that replicates New York City to an almost alarming level of detail

Game Localization market size 2027F

USD 2.1bn

8 Rise in sports and fitness gamification
AR/VR gains a foothold in sports and fitness, using digital environments to improve real-world wellbeing.

What’s trending

AR/VR is redefining sports and fitness, merging digital environments to amplify real-world abilities. It enhances motivation through immersive, gamified fitness routines, providing clear goals and rewards, thus ensuring consistent engagement. Social platforms turn fitness into a communal, competitive activity, with tailored challenges allowing everyone to progress. Serving as a key entry for tech innovation, gamification also offers real-time, data-driven insights to optimize performance. It democratizes fitness, eliminates the need for gym memberships, and makes fitness content universally accessible. This fusion of digital and physical realms is modernizing wellness, sports, and gaming, offering unparalleled, personalized experiences in fitness and beyond.

Why it matters

By merging AR/VR with sports and fitness gamification, upscale lifestyle/fitness services can elevate client experiences and provide immersive, engaging environments. It’s an innovative way to enrich fitness journeys, foster a unique community, and seamlessly blend luxury with well-being.

Examples:

  • Sports VR gamification (simulating real-life sports): Cross-country skiing VR; Eleven Table Tennis
  • Fitness VR gamification (simulating physical activity): Supernatural and Audioshield for musical rhythm

VR gaming market size 2027F

USD 45.1bn

9 Interoperability, digital identity, virtual assets
Gaming markets are opening up, powered by a unified digital identity.

What’s trending

Imagine a gaming world seamlessly connected by a singular digital thread: a unified digital identity powered by blockchain technology. This innovative identity isn't just a technical marvel—it’s the linchpin that allows for the interoperability of virtual assets, seamlessly tying diverse games into a vast, cross-platform universe. Through this, players not only experience interconnected gameplay but also see their virtual assets brimming with real-world potential. As this digital identity amplifies player agency, monetization transforms, turning each virtual achievement into tangible opportunities. While regulatory hurdles lie ahead, this vision of an integrated gaming sphere, anchored by a singular digital identity, is a place where player agency and opportunities take center stage.

Why it matters

Relying on cutting-edge solutions such as blockchain and unified digital identities, regulators and policymakers can form strategic partnerships and ensure optimal compliance and trust. This paves the way for enhanced fraud and theft prevention, secure transactions, and asset authenticity verification, fostering open game markets and economies.

Examples:

  • Blizzard’s in-game economy allows items, skins, or pets purchased in one game to appear or vary in others like Diablo, Hearthstone, and Warcraft.
  • Steam efficiently unifies IDs across games without the need for blockchain technology

Blockchain gaming market size 2027F

USD 65.7bn

10 Collapse of the physical-virtual barrier via the rise of XR
High-fidelity twinning and advanced wearable tech dissolve physical-virtual walls to bring about the metaverse.

What’s trending

High-fidelity twinning and wearable tech are transcending barriers, unlocking new possibilities, and heralding the arrival of the metaverse. The deep immersion offered by XR (Extended Reality) blends real and virtual worlds, creating enriched connections and enabling holistic experiences, propelling growth in diverse gaming sectors. By transforming everyday surroundings into dynamic game environments, gaming becomes more intuitive and accessible. Players can enjoy unparalleled autonomy in customizing their virtual identities in shared spaces, revolutionizing multiplayer interactions. The seamless transitioning between game modes, supported by enhanced sensory feedback, provides diverse and realistic gameplay experiences. This technological melding creates an inclusive and immersive gaming future, blurring the lines between reality and virtuality.

Why it matters

Overcoming the physical-virtual divide will require massive improvements to both hardware and software performance. Only then can companies achieve seamless quality, where the virtual is indistinguishable from the real. While these efforts may increase development costs and lower profits in the short term, their success will result in a dramatic windfall for investors.

Examples:

  • Digital twinning: Niantic, Meta, and Apple offer use cases where end-users can scan their local environment and upload a digital version to game platforms.
  • XR tech improvements: Meta’s Quest 3 offers improved object detection and hand tracking, enhanced visuals with greater field of view, and full-color, higher resolution pass-through.

Leveling up for gaming’s future

Looking to the future of gaming, we see a time when gaming not only entertains but uplifts entire communities—driving health, employment, and economic vigor. A time when cities and nations become hubs of creativity and culture, backed by robust technology and expansive metaverses. Even now, the gaming and esports landscape is rapidly diversifying, with innovations like AI integration, Play-to-Earn models, and Gaming-as-a-Service reshaping its contours. Beyond mere play, structured career paths for esports athletes are arising, with strong governmental and educational backing. As the sector burgeons, developers, investors, policymakers, and players are presented with an expansive realm of opportunity. This goes beyond gaming; it represents a novel phase of innovation, commerce, and worldwide collaboration.

The Future of Gaming
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