Gaming Market 2022 Year-End Review

Will Microsoft's Activision acquisition go through?

The year started with several gigantic acquisitions in the video game industry that significantly changed its landscape.

None were more significant than Microsoft’s (NASDAQ:MSFT) US$69 billion deal for Activision Blizzard (NASDAQ:ATVI). While the transaction has not closed yet, it has certainly created a legacy of headlines and heated conversations.

“The question will be if regulators allow it to go through,” Raj Lala, president and CEO of Evolve Funds, told INN.

Just before the end of the year, the US Federal Trade Commission announced it would take Microsoft to court to challenge the deal for anti-trust regulation. The corporate lawsuit capped off a year of tense discussions surrounding the deal's impact.

Chief among the detractors of the gigantic acquisition is Sony (NYSE:SONY), Microsoft’s console gaming competitor. The Japanese company’s gaming division and its executive leader, Jim Ryan, have spent plenty of time slamming the deal.

Debate centers on what will happen to some of the biggest franchises owned by Activision, such as the massively popular shooter series Call of Duty, following the potential Microsoft acquisition.

Sony has pointed out that if the purchase goes through, it will no longer be able to release key Activision games on its PlayStation console; however, Microsoft has countered that its Xbox console has a smaller share of the market than Sony's PlayStation, meaning Sony would face limited downside.

As debate continues about the validity of the deal, investors will be watching which direction the courts go in the new year.

What are the strongest international markets for gaming?

As per usual, while the mainstream storylines in gaming are focused on consoles and computers, mobile gaming continues to represent the market's biggest area of growth, especially in international markets.

According to gaming research firm Niko Partners, the number of gamers in markets like India is only increasing.

Lisa Hanson, president of Niko Partners, said India is quickly becoming “one of the most important markets that we track,” thanks to the quick rise of its user base. “India’s nearly 400 million gamers account for over half of the 788 million gamers in Asia-10 and are a formidable force to be understood and served by developers and publishers,” she added.

However, China, another staggering market for the mobile gaming space, is facing its first revenue decline in 20 years.

Niko Partners projects that revenue from the mainland Chinese gaming market will drop by 2.5 percent year-on-year in 2022 to US$45.44 billion. This forecast includes both mobile and PC gaming.

Moving forward, the firm is expecting improvement with a CAGR of 2.6 percent in the 2021 to 2026 period.

“We observe momentum in the economy, esports, PC gaming, and enthusiasm among China’s 700 million+ gamers,” the president of Niko Partners said.