The future is impossible to predict, but that doesn’t stop us from trying. At Remagine Ventures, we’re constantly on the lookout for the next big thing in gaming, metaverse, and consumer tech. Tis’ the season for annual trends report after reading a bunch of them, I zoomed in on five trends to watch in gaming, metaverse and entertainment tech in 2023.
1. Mobile Gaming bounces back in 2023
Consumer spending across app stores totalled $167 billion in 2022. For the first time (ever I believe) mobile gaming took a 5% hit in monetisation in 2022. In total, consumer spend in mobile gaming reached $110 billion in 2022.
However, 2023 is expected to be back to growth. The average Amercian spends about 13 hours per day using technology, and the share of gaming is growing as the most popular form of entertainment for people below 50.
In 2023, I expect to see more cross platform games – i.e. mobile experiences for top console and PC games that are free to play. Improvement in 5G capacity as well as new powerful mobile devices coming out will greatly enhance mobile gaming experiences, allowing for faster and more responsive gameplay.
The metaverse took a hit in 2023. Or more accurately the “Meta-Verse” As Mark Zuckerberg struggled to create big wins in 2022 when unrealistic expectations failed to materialise. Mass layoffs, botched VR headset launch and high spend were amongst some of their struggles in 2022.
It’s going to take some time to develop the vision of the Metaverse, but I expect to continue seeing the 3D Internet develop in 2023 from the perspective of infrastructure and devices, middleware/ tools and consumer experiences. I also expect to see more enterprise use cases for the Metaverse beyond consumer and the first fruits of the Meta/Microsoft partnership. A recent PWC Survey found that the Metaverse remains a top-line agenda item for many CIOs and CTOs. Two thirds (66%) of those surveyed say they’re “actively engaged in how the Metaverse will deliver sustainable business outcomes.
Despite the ‘crypto winter’, Web3 startups raised $7.1B in funding during 2022, with gaming accounting for 62% of it ($4.49 billion). While the crypto gaming market is still relatively small, as only an estimated of 320 million crypto wallets online, that is likely to change in 2023, as blockchain moves the background and wallets become digital, enabling users to buy tokens/crypto with a credit card.
3. Streaming and Cloud Gaming offer new ways for gaming monetisation
Streaming technology is revolutionizing the way we play games. The death of Google Stadia left a void in the cloud gaming space, and it’s being filled by Microsoft xCloud, Steam and Amazon Luna, which allow players to stream games directly to their devices without the need for expensive hardware. In addition, subscription services like Apple Arcade, can provide a better user experience for players trading off intrusive ads for a monthly subscription fee.
As the gaming industry continues to expand in 2023, I expect to see more bundling of gaming offerings, monthly subscriptions, etc. Streaming has become an integral part of gaming, with over 2 billion hours of livestreaming watched in November 2022 alone. Currently, the streaming space is dominated by Twitch, Youtube and FB Gaming and I would expect to see this trend continue and new tech (perhaps leveraging generative AI) for better viewer engagement.
4. AR, VR, XR might have their iPhone moment in 2023
Augmented and virtual reality technology is becoming more advanced and accessible. The AR industry has been growing, but didn’t have its “iPhone moment” yet. That might change in 2023 with the anticipated launch of Apple’s new XR device. The rumours are mounting up, but in true Apple style, we will only find out when it actually happens. Companies like Nreal that are making AR glasses light and affordable will see a boost in sales. MagicLeap is now under new ownership and may re-evaluate its focus on enterprise only.
In the VR space, companies like Oculus, HTC and Sony are releasing new VR headsets that offer high-quality experiences. Judging by the slew of announcements in CES 2023, the VR space is not going away soon. While the price for the Oculus Pro that came out this year was outside of mass reach (approx $1,500, compared to the Quest 2 at $400) but I expect more high quality content to get released for VR as well as high quality content to be added. According to a recent Newzoo report, VR game revenues will increase more than sixfold in five years, from $0.5 billion in 2019 to $3.2 billion in 2024.
5. Generative AI enters Gaming in a big way
The fast advancements in AI-generated content are being used in the gaming industry to create new characters, levels, and game experiences. There is a growing number of generative AI companies operating in gaming already, and in 2023, I expect many new generative AI entrants to the gaming market to help automate every part of the game creation process.
Some examples include: Startups like Behaviour Interactive and Axon Park are using AI to generate new content and experiences that would be impossible to create manually. Startups like InworldAI, ConvAI, or Charisma.ai are powering NPC (non playable characters) with AI, which has the potential to make character interactions in games and virtual worlds more realistic. The level
2023 is going to be an interesting year in the entertainment space
The future of gaming, metaverse, and consumer technology is looking bright, with exciting new possibilities on the horizon. It’s an exciting time to be a part of these industries, and we at Remagine Ventures, are excited to continue writing first checks to founders looking to build the future of this space.
If you’re interested to read more about these spaces, I found the following 2023 prediction reports useful/interesting: