The 2021 Online Games Forecast: Go Social Or Bust

Last year brought unprecedented change to the games industry. Record growth for revenue, in-game spending and daily active users. Even more traction and disruption is on the way this year, with forecasters expecting the games market to reach $217.9 billion in revenue by 2023. Facebook’s Games Marketing Insights for 2021 found that 28 million Americans became new mobile gamers last year and more than a third of new gamers preferred connecting with others via multiplayer games versus playing solo. 

With this shift, “social” took on new meaning. Games like Among Us, Animal Crossing, Jackbox.tv and FlowPlay’s newest game Live Game Night emphasize new forms of social connection, and are reinforcing player relationships through real-time engagement features. 

As the industry evolves in 2021, innovative social features will be paramount to differentiation. Gamers are now staying for the relationships and connection found online. It’s up to developers to stay in front of this trend by creating social, community-first spaces where  games offer cross-platform play across multiple devices. The most successful games will be the ones that provide hangouts for friends as their primary draw, with fun, original gameplay as a strong second. 

Demand will hold steady for social

This year, while the games industry may experience a dip in demand, the appeal of truly connected, social experiences will persist. With the rise of TikTok and newcomer, Clubhouse, an invite-only audio social app, people continue to want to connect online and often. 

While daily play time may take a hit as lockdowns lift, more people get vaccinated and life returns to a newer (and hopefully better) normal, the staggering growth from 2020 was not a complete outlier. 

Console performance from last year is one indicator. Both XBOX and PlayStation  saw tremendous sales and dizzying pre-sale launches for the Series X and PlayStation 5. But these were outperformed by the Nintendo Switch, which moved an astounding 15.6 million units over the span of nine months. With the release of Animal Crossing: New Horizons in 2020, which  encouraged social connection and interaction that spanned generations, genders and geographic locations, Nintendo brought consumers personal connection when they needed it most, and in turn, easily beat its competitors. 

Now that the gaming market has expanded to new audiences, we’ll see demand continue to grow, and more opportunity for new and emerging developers looking to make a breakthrough in the space.

5G and streaming disruption? 

5G is another factor expected to impact the games industry this year, but it still has a lot to prove.When 5G first made a splash, people couldn’t stop talking about the world of possibilities it offered. Less latency and faster downloads? Sounds like a dream for mobile gaming and streaming platforms. However, now that 5G is actually becoming available, the results have been somewhat mixed. For 5G to really make a difference in the world of gaming, it must directly address and solve the most common issues: buffering and lag while playing. For a seamless gaming experience and for cloud-streaming to have a shot against current online, console and mobile game offerings, 5G must live up to the hype. 

Adoption of 5G networks will also need to grow to meet initial expectations. Right now, it’s slower than predicted. I think we’ll see better gameplay for 5G users on the mobile games front, but the technology is not where it needs to be to enable the type of widespread game streaming that has been hyped. 

One thing we could see on the streaming front is growth of a “Twitch & Chill” culture, where one of the streaming giants moves to merge video game entertainment and communities (e.g. tournaments and virtual events on Twitch and Steam) with their broader programming. Amazon could be a likely candidate for this given its ownership of Twitch and an established on-demand TV and movie service.  

More work lies ahead

Despite tremendous progress and growth on the horizon for the industry, game developers still face an uphill battle in securing app store fairness. Apple continues to be a repressive force in the games industry, and its efforts to appease developers—such as the reduced commission rate for developers that generate less than $1 million in annual revenue—are falling short of the progress we need to see. It will be important for our industry not to let the demands of rapid growth distract from the important work that must still be done to open up the app landscape and give innovative developers a fighting chance at reaching users (and giving them the social experiences they want).