1674971597 Video games the fever of the Covid years has subsided

Video games: the fever of the Covid years has subsided

Visitors line up to play Visitors line up to play “Skull and Bones” during Paris Games Week 2022, November 2, 2022. CHESNOT/GETTY IMAGES

The start of the year is difficult for the video game industry. One after the other, the editors note the decline in their income and expect job cuts, be it at the American Microsoft or the Chinese Tencent. Same tone at Ubisoft, the French had announced on January 12 that for the 2022-2023 financial year it was forecasting a drop in sales of “by more than 10%” compared to the previous year, highlighting “the deterioration in macroeconomic conditions”. Another negative element: the renewed postponement of the game “Skull and Bones”, originally planned for November 2022, while Ubisoft also indicated that it had stopped the development of three “unannounced” projects, in addition to the four stops already communicated in July 2022.

In addition, relationships within the company have deteriorated. On Friday January 27th, Ubisoft employees were called by their unions to go on strike to denounce management’s management practices.

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” Some Publishers had overestimated the market growth,” interprets Charles-Louis Planade, financial analyst at Midcap Partners. In fact, after two years of euphoria marked by the boom in home entertainment during the restrictions related to the Covid-19 pandemic, video games experienced a period of slowdown in 2022, with a market decline of 4.3% to $184 billion ( $169.5 billion). euros), according to the specialized company Newzoo. The development in the mobile gaming area (–6.4%) is even more pronounced, which alone accounts for half of the industry turnover.

Resurgent inflation, semiconductor shortages weighing on console production, and growing distrust of tech stocks all justify this state of affairs. If Newzoo expects the sector to grow at an average annual rate of 3.4% until 2025 (compared to 7% in 2021), 2023 should put the sector back on a new footing.

In 2022, the number of mergers and acquisitions rose to a total of $127 billion, or three times more than in 2021, with a record 1,300 transactions, according to Drake Star. But the most important, Microsoft’s $68.7 billion acquisition of Activision Blizzard announced in January, seems increasingly fragile.

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The US, European and UK competition authorities have taken up the case and appear poised to derail it. It should allow the Xbox parent company to get its hands on prestigious licenses such as Call of Duty, World of Warcraft or Candy Crush. As a show of goodwill, the Redmond, Washington-based company has pledged that Call of Duty will be available on Sony (PlayStation), Nintendo (Switch) and Steam platforms for ten years. On the old continent, arbitration proceedings are expected in the first half of 2023.

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