Tipping point The coming consolidation of live service games
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The games industry has become addicted to the promise of lower risk and better ROI from live service games. As a result, there has been a flurry of live service titles released over the last years. This is the key reason why the games industry’s core business model has shifted from unit-sales based to engagement based. Given the saturated attention economy and increasing number of live service games competing for the same consumer time, the initial advantages that the early movers had is evaporating. This will lead to a consolidation of the live service games market, likely pushing up IP valuations of a small handful of market leaders. We are now at the tipping point. Games companies should examine their positioning in live services and carefully balance their games strategy to hedge against oncoming risk.
Companies and brands mentioned in this report: Apex Legends , Ariana Grande, Call of Duty, Call of Duty: Warzone, Defiance, EA, Fall Guys, FIFA, Fortnite, SKATE, TikTok,Travis Scott, Overwatch, World of Tanks, and Minecraft