5 gaming trends we're watching in 2024

The gaming industry was in its heyday during the COVID-19 pandemic. Looking at adoption rates: in 2020, 79 out of 100 Americans were gaming for an average of 14.8 hours per week. This average jumped up to 16.5 hours in 2021.

‍Then there’s the revenue. Mobile revenue growth grew in total at a CAGR of almost 21% from 2015-2021. 

More people stuck inside meant more people gaming - and these games could then monetize players effectively thanks to the IDFA and other device identifiers that helped in crafting highly targeted and optimized UA campaigns.

But eventually, life returned to normal and gaming industry trends had to shift. The demand during the pandemic started waning in 2022. Then the end of IDFA and introduction of major mobile privacy changes introduced even more complications. Let’s not forget high inflation rates and rising consumer price index (CPI) contributing to higher costs of game development and a decrease in consumer spending.

What we saw starting in 2022 was a shift in gaming trends on multiple fronts:

• Americans returned to an almost-pre-pandemic level of gaming in 2022, spending on average 13 hours per week playing video games
• Analysts expected CAGR in the mobile market to shrink to 1.6% from 2022-2026
• Global gaming revenue shrunk 12% in 2023, or $26 billion (when accounting for inflation)
• 10,500 gaming employees were laid off in 2023 - companies like Microsoft have continued layoffs in 2024, leading to a total of 8,500 so far this year 
• Studios were forced to adapt to a post-IDFA world - exploring new channels for gathering first-party user data and emphasizing retention over user acquisition

Though layoffs, shrinking revenues, and higher costs seem bleak, the gaming industry isn’t ready to call it quits. We think of many of these post-pandemic game development trends as corrections after an optimistic period during COVID-19. 

Additionally, we’re seeing the rise of other, exciting gaming trends as a result of these challenges. Ahead, we’re diving into five gaming trends for 2024 that address the difficulties of this era and paint an encouraging picture for the future of gaming.

1. AI is here to stay

There have been a lot of debates recently over AI and how it should be used in game development. Many in the industry perceive AI gaming trends as a threat - especially as layoffs increase. But some studios are seeing that incorporating AI into existing workflows are paying off by enabling the same teams to tackle larger, more ambitious projects that they can execute at a high quality. 

Let’s explore a few use cases for AI gaming trends:

• Enable larger-scale projects 
• Create better character interactions
• Accelerate the pace of innovation

Enable larger projects

AI tools can help developers at any stage of design, whether that’s existing games in need of regular, new content or new games gearing up for launch. GaaS, or service games, require the regular release of new content to keep the game fresh and players engaged - but this of course requires time, resources, and finances. Gen AI tools enable game developers to ideate and deploy new assets at scale - from environments to characters. They can also help with game creation: developers can use these tools to design the content needed to launch a game that’s on-brand and aligned with the studio’s vision. This helps teams tackle large projects that were once out of reach from a resource and/or time perspective.

Take Revolution Software, for example. They were planning a follow-up title in a series that began with the 1990s adventure game, Broken Sword. When updating the game to suit modern-day screen resolutions and consoles, the team ran into a challenge: All the Broken Sword original artwork was hand-drawn. Recreating 30,000 hand-drawn sprites at scale is both highly time-consuming and costly. Plus, all of the original artwork was made for early-generation, lower-resolution screens.

So Charles Cecil, Founder of Revolution Studio, decided to explore AI gaming trends by connecting with gen AI researchers at a local university and training a generative adversarial network (GAN) using a few hundred of their hand-drawn game art examples. With later help from an Nvidia engineer, the result of the collaborative effort was a gen AI model that was able to make a game asset (e.g. object or character) in 5-10 minutes. The Revolution Studio team still manually drew their heads and faces, but integrating the AI into the process to generate the outlines and body details helped significantly reduce the timeline and costs.

“The ability to use AI on sprites is an absolute game changer. We just simply couldn’t afford to do it. Otherwise, it would be impossible.” - Charles Cecil, Founder of Revolution Software

Create open-ended interactions

Non-player characters (NPCs) propel a game’s narrative forward, often creating a more immersive and deep player experience. But NPCs are also notoriously robotic, clearly confined to the game’s logic and unable to deviate from their script - which can lead to some pretty weird interactions.

Enter, another application of AI game development trends. AI tools are making NPCs more unpredictable, dynamic, and realistic - all with the hope of boosting engagement and retention. The ability to dynamically generate storylines for an NPC also means reducing the amount of scripts needed. This frees up time and resources on the development team to focus on other parts of the operation, like helping to optimize the models used to train the AI.

NVIDIA Avatar Cloud Engine (ACE) for Games is one such tool taking advantage of AI gaming trends. It uses AI to make NPCs more intelligent and gives them dynamic personalities that evolve over time and with each interaction. Within the suite of tools included in ACE,  Audio2Face lets developers use an audio source to create expressive facial animations.

Ubisoft is getting in on AI gaming trends, too. They partnered with NVIDIA (for the Audio2Face tool specifically) and Inworld (for their proprietary LLM) to launch the project, NEO NPC. The project uses a model to teach NPCs how to respond dynamically and create natural-feeling social interactions. Training the NPC still requires a writer, but the writer helps optimize the model rather than just creating a script for the character.

“For the first time, the game world actually listens to and dynamically responds to the players. Social interactions and skills become part of the gameplay. Smarter NPCs like our NEO NPCs have the potential to become a breakthrough addition to the traditional NPCs we see in games today. They provide the ability to create even more immersive worlds and emergent stories.” - Xavier Manzanares, director and producer of NEO NPC

Accelerate the pace of innovation

Game development requires resources across many different parts of the operation - which tend to add up and lead to a longer development timeline and higher costs. But AI gaming trends can help developers move through prototyping, test iterations, and explore directions for their game design more quickly and cost-efficiently. An AI tool like Promethean, for example, can increase the speed of world building by 10x.

AI can be used to identify any weak points or places for optimization as a way of working more efficiently. For example, Hexworks took advantage of AI gaming trends during the development process for their game, Lords of the Fallen, in three ways:

• Offer helpful suggestions, like a new texture size or simplifying shaders 
• Handle more mundane tasks, like localization
• Generate voices during prototyping that were later recorded by professional voice-over actors

“AI is 100% something we are going to be using and integrating in our pipeline, but it's never going to substitute the artist or the brain behind it.” - Cezar Virtosu, Creative Director at Hexworks

2. Meeting hybrid-casual in the middle 

IDFA deprecation impacted every type of game, but it arguably hit the “extremes” of game business models the hardest: high LTV genres like casino and MOBA struggled to acquire their small groups of core users and hyper-casual developers couldn’t monetize their large ad inventories as effectively. As a result, there was a move to the “middle” where broad targeting and IAP monetization met. 

High LTV genres can’t reach their target users

Before the deprecation of IDFA and GAID, high LTV/CPI games reached a loyal but small audience through precise targeting - and monetized them with IAPs. Developers were willing to pay a lot more for these installs (sometimes up to $50 per install), because the players they brought in had very high LTV and retention. But in the post-ATT era, these games have struggled to effectively find their small number of high spending players. And they’ve found it even harder to attribute installs so they can accurately measure campaign performance and profitability of UA campaigns.

Hyper-casual can’t maintain broad targeting

Meanwhile compared to mid-core and core, hyper-casual games fell on the other end of the monetization spectrum. Their business model was based on reach: get in front of a wide audience then monetize each user almost entirely through ads. Broad targeting resulted in higher churn, a shorter retention curve, and lower LTV. These games focused on acquiring users as cheaply as possible (often as low as $0.10) and generating slightly more revenue than it cost to acquire them. Since the end of the IDFA, these developers have had to contend with two challenging gaming trends:

1. It became extremely difficult to target high-LTV users, which meant that higher monetizing genres like match-3 started adopting broader top of funnel campaign strategies. Now, hyper-casual developers must compete with higher monetizing genres for each install - which leads to higher bids and overall UA costs. 
2. The inability to accurately attribute installs or identify devices meant it was much harder for these ad-based business models to accurately price their inventory. So while CPIs were increasing due to competition from other genres, ad-based revenue was decreasing. 

One of the mobile gaming industry trends we’ve seen is the hyper-casual industry beginning to suffer - its market share shrunk 20% in 2022. The Head of Publishing at hyper-casual giant Voodoo even declared that “hyper-casual is dead”! 

Gaming moves to the middle

As the post-IDFA environment urges core developers to appeal to a wider audience and hyper-casual devs to move into higher monetizing models, there’s a move to the “middle” - to design games with broad appeal and hybrid monetization models for every type of user. 

Meet hybrid-casual: a genre that blends the mid-core features of high-quality graphics, strategic gameplay, and upgrade system based on IAPs with hyper-casual’s simple mechanics, minimal depth and ad monetization model. Essentially, hybrid-casual mobile gaming industry trends are defined by depth in gameplay (elaborate progression events and PvP mechanics) and hybrid monetization.

“A few years ago, hyper-casual games needed only two or three components to succeed, such as mechanics and visuals. Now. . .core loop, progression, visuals, technical components, smooth animations, and a variety of content - all must be present and of high quality.” - Sergey Martinkevich, Publishing Lead at Azur Games

Games that meet this criteria and successfully balance deeper gameplay with hybrid monetization are earning significant profit. In fact, hybrid-casual games experienced a 30% increase in revenue in 2023.

Archero, Habby’s 2019 hit, is a game that embodies hybrid casual - and is one of the earliest examples in this genre. Since its launch, the game has earned over $41 million in app store revenue on iOS alone. It combines accessible, hyper-casual style mechanics with a monetization model that lets players purchase in-game boosts, new costumes, and better weapons.

3. Web shops

Like we discussed, after IDFA deprecation, games experienced a huge hit to revenue, attribution, and user targeting. To adapt, studios have either put their budget behind pray-and-spray campaigns (limited targeting and high cost) or invested in new technology and infrastructure to optimize UA (e.g. pivoting to probabilistic attribution and devising new measurement models). 

Not to mention, once studios bring people to their game, any purchases that players make require a 30% commission to the platform. 

Direct-to-consumer channels like web shops and game launchers are the gaming trends in 2024 that offer solutions to these IDFA and revenue challenges. They offer a more affordable channel for gathering first-party user data, running UA (driving traffic to a web shop is less expensive than mobile ads), and driving direct revenue free from 30% commission fees.

Also, the LTV of web shop users is higher than mobile - so developers get more bang for their buck. How?

• Bypass 30% fees, which leads to greater profit margin
• Get more flexibility with offers, including discounts, loyalty programs, and unrestricted pricing 
• Integrate non-commerce content that nurtures engagement and retention

This is why dozens of studios are building web shops today - and D2C gaming trends are only set to continue growing as more studios explore new (or expand their existing) D2C channels. For example, Playtika grew their D2C revenue by 14x since 2017 to almost $640M in 2023. 

Meanwhile, Pokemon Go launched their web shop in May 2023 - and has been driving revenue ever since with features like web-exclusive offers, free items with purchase, and offer codes tied to events and partnerships. And other games are joining in with their own web shops, including:

• Coin Master from Moon Active 
• Stumble Guys from Scopely
• Merge Dragons from Zynga

“When we see third-party reports on Pokémon Go [revenue] decreasing, I can say, very clearly, that they are wrong. And we know they are wrong because they don't have access to that data. They don't have visibility into non-mobile numbers." - Ed Wu, Senior Vice President of Pokemon Go

Microsoft is getting in on D2C gaming industry trends, too, by launching an Xbox, web-based mobile game store in July 2024. 

“We’re going to start on the web…because that really allows us to have it be an experience that’s accessible across all devices, all countries, no matter what, independent of the policies of closed ecosystem stores, and then we’re going to extend from there.” - Sarah Bond, Xbox president

4. Policy-led change is coming

2024 is turning into a landmark year for antitrust regulations worldwide. Let’s break it down by domestic vs. international and explore the key highlights of each to see why they’re such impactful gaming trends:

Outside the US

South Korea Telecommunications Business Act (2021): 

• Apple and Google’s payment systems aren’t required 
• Third-party payment gateways are allowed
• As of October 2023, South Korea threatened Google and Apple with $50M fines

Digital Markets Act (DMA) (2024):

• Passed in 2022, went into effect March 6 2024
• Designates companies - including Apple and Google - as gatekeepers that need to follow compliance rules, or face fines of up to 20% global turnover
• Apple and Google updated their policies in order to comply
• Apple became the first victim of the DMA - they’re getting fined up to $38 billion for failing to comply with the steering provisions set out in the DMA

“Rather than the government needing to prove that a law is being broken, here the gatekeepers need to prove that they’re doing everything right. That's a huge difference to how traditional law works.” - Archie Stonehill, Head of Product at Stash

Digital Markets, Competition and Consumers Bill (DMCC) (2024):

• Passed the House of Lords May 23, 2024 - likely to go into effect Fall 2024
• UK equivalent of DMA - but goes even further. E.g. able to penalize Apple and Google 10% of global revenue and even block M&As
• Epic Games pledged to bring Fortnite and their store to iOS in the UK early 2025

Japan pro-competition bill (2024)

• Passed on June 12, 2024 in Japan. Likely to go into effect by end of 2025
• First ex-ante competition regulation in Japan (had always been retroactive in the past)
• Bans Apple and Google from giving preferential treatment to their own products
• Compels them to offer alternative app stores and payments
• Outlines a 20% penalty on all local sales if they fail to comply. Fine can increase to 30% if they continue anticompetitive practices
• Epic is bringing their game to Japan in 2025 

In the US

Epic Games vs Apple (2021)

• Hearing in front of a judge, Yvonne Gonzalez Rogers
• Decision handed down in September 2021: Apple won on most counts, but the judge did rule that the company violated California anti-competition laws with their anti-steering provisions
• Apple introduced a link-out policy in the US, but commission fees still remained high (27% if devs use third-party payment), prompting Epic to return to court and both sides to continue legal action

“Imagine a logical reason why Apple would demand that of competitor apps... Other than to stifle competition, I see no other answer.” - Yvonne Gonzalez Rogers

Epic Games vs Google (2023)

• Held a jury trial in December 2023
• Google found guilty on all counts
• Epic requested (in a 16-page document) that Google allow third-party apps and payment systems in the Google Play Store, allow sideloading, end anti-steering provisions, and prohibit Google from making anti-competitive agreements and deals with developers
• When Google presented their argument in response, Judge Donato replied, “I just don’t buy it.”
• On October 8, 2024, he ruled that Google had an unfair monopoly and required them to open up the Play Store for three years (including allowing sideloading and alternative payments, and ending exclusive agreements with developers)

DOJ Lawsuit (2024)

• March 21, 2024 the US DOJ filed an antitrust lawsuit against Apple with the attorneys general of 16 states and DC
• June 11, 2024 4 more states - Indiana, Massachusetts, Nevada and Washington - joined the lawsuit
• Argued that Apple is showing self-preference, undermining competition and innovation

Biden administration strategy (2021)

• All of these US antitrust lawsuits are part of the Biden administration’s aggressive antitrust strategy, signaled by an executive order in July 2021
• Termed the ‘New Brandeis’ or “neo-Brandeisian” movement 
• Father of the movement, Louis Brandeis, was a Supreme Court Justice who said famously: “We can have democracy in this country, or we can have great wealth concentrated in the hands of the few, but we can’t have both.” 

All of these regulations are leading to game industry trends like a more open app ecosystem in which third-party app stores, payments, and sideloading are allowed. 

5. Cross platform enters a new era and cross progression joins in

Cross play and cross platform distribution aren’t new gaming trends. Most games are available on at least two platforms, like mobile and desktop, and cross-play is pretty much industry standard now. Fortnite is one of the early examples of cross-play, in particular. Launched in 2017, the game grew so popular that Sony changed its policies in 2018 to enable cross-play on PS4. 

But what we’re seeing in terms of gaming trends for 2024 is even more cross-platform compatibility and the rise of cross progression. 

Expanded cross platform compatibility

It’s pretty common at this point for games to be compatible on mobile - especially in an era where 86% of Gen Z play games on mobile. But the PC market is still rapidly growing. Revenue from PC game sales, IAPs, and subscriptions increased 8.4% YoY in 2023 - and console gaming revenue in 2023 reached $52.4 billion.

As a result of cross platform gaming trends, studios are recognizing the need to expand their platform distribution. For example, Playstation is launching more titles on PC (Helldivers II, God of War, The Last of Us Part 1). And Xbox is not only launching some games on Playstation (Hi-Fi Rush, Pentiment) but also making their games compatible on any Windows 10/11 PC through their Xbox Play Anywhere initiative. There’s also Roblox, an early example of a cross platform game that began on desktop but has since become extremely popular on mobile. In 2023 they even launched on Playstation and expanded into VR by launching on Meta Quest headsets.

Emergence of cross progression

While cross play lets users play against each other on any platform, cross progression is a gaming trend that takes it a step further by letting players continue where they left off in the game - on any device. 

Right now, cross progression is the most applicable for free-to-play games because they don’t require users to buy another version of the game for each device. But there’s plenty of opportunity for this gaming trend to expand as both cloud gaming and cross platform compatibility expands. Cloud gaming - which lets players save their progress to the cloud then easily access on any device - for example is growing at a CAGR of close to 47% from 2023-2032.

And there are already plenty of examples of premium games launched recently that support cross progression across all of their compatible platforms, including:

• Omega Strikers (launched 2022)
• MLB The Show 23 (launched 2023)
• Baldur’s Gate 3 (launched 2023) 

To enable cross progression, these games require users to create a unique ID. Usually, this means setting up an account with the game or studio, or logging in through a platform like Steam or Xbox. By identifying players, the game can connect their accounts across different devices using an Account Linking technique on the backend. For example, players need to set up a Larian account to access Cross Save and Cross Play in Baldur’s Gate 3.

When players connect their accounts in these games, developers get access to first-party data, like email. In a post-IDFA era, this info is incredibly valuable - for example, it can be used to craft retargeting campaigns and create lookalike audiences.

Get in on these gaming trends

Though the end of COVID-19 seemed like a tough time for the gaming industry, the gaming trends we’re eyeing for 2024 are indicating that things are changing for the better - and quickly. From AI that can cut development costs to policies that could open up the entire app ecosystem to web shops that let you engage directly with players (and drive direct revenue), there’s a lot to look forward to this year.

If there’s one gaming trend we know well, it’s D2C. Stash is here to help you take full advantage of channels like web shops and game launchers. Talk to us about setting up a direct channel to your users and driving higher engagement and revenue.