6. Nintendo will show its cards for its turnaround strategy

It's funny that the new Nintendo World Championships took place inside of the Microsoft Theatre.

Above: It’s funny that the new Nintendo World Championships took place inside of the Microsoft Theatre.

Image Credit: Giancarlo Valdes/GamesBeat

The Wii U has been a dud, and the 3DS has lost ground to mobile games. Super Mario Maker received a ton of praise this year, but it can’t revive the weak console platform.

In spite of this, or perhaps because of this tough period, you can expect Nintendo to strike back across a number of fronts next year. Nintendo has already tipped its hand on Pokémon Go, a location-based title from Niantic, which spun out of Google and is now partly owned by Nintendo and The Pokémon Company. Fans are getting excited about this 2016 game, which will run on mobile devices and will work with a special Nintendo device.

Japan’s DeNA is also working on a number of games that will bring Nintendo’s beloved franchises, such as Mario, to mobile devices. The pent-up demand for these games should be huge. And lastly, Nintendo has promised it will tips its hand about the NX, a new dedicated hardware device that will replace the Wii U.

These transitions are critical for the future of Nintendo, and they will play out in the next year. The late Satoru Iwata, the former president who died unexpectedly this summer, laid the groundwork for these initiatives. If they succeed in turning around Nintendo’s fortunes, they’ll be a brilliant last gift for gamers from Iwata.

7. Hardcore gaming gains ground on mobile devices

Join my vault!

Above: Join my vault!

Image Credit: Bethesda

Casual games were the first to take off on mobile devices. And mobile-game publishers have done a good job coming up with mid-core and mobile-first brands.

But I expect that hardcore games based on traditional brands, like Fallout Shelter, to take off on mobile.

Activision, Nintendo, and Konami are getting more serious about grabbing a bigger share of mobile. That means that mobile-first companies such as Gree, DeNA, Supercell, and Machine Zone will have figure out ways to fend off the intruders, who have better-known hardcore gaming brands. We’re already seeing lots of partnerships testing hardcore game brands in mobile, like the Nintendo-DeNA alliance, and you can expect that trend to continue. We’ve even seen some casual game companies, such as SGN, expand into hardcore properties such as The Walking Dead.

I think that the companies that find themselves without hardcore gaming brands will have a hard time in the future, particularly as user acquisition costs get worse and worse. (Thanks to Luke Stapley for this idea).

8. Consolidation will continue as foreign companies and media conglomerates acquire more game publishers

Candy Crush Saga in action.

Above: Candy Crush Saga in action.

Image Credit: King

Activision Blizzard’s $5.9 billion acquisition of King was a watershed moment in multiple ways. Activision acknowledged that the $30 billion mobile-game market was a huge opportunity, and it took a mobile-focused company to break into it. But it’s also just the beginning of a new round of consolidation. It will force rivals to take their own actions.

Smaller mobile-game companies may have to scramble to team up with larger entertainment companies or traditional game publishers to get access to the same kind of brands that King can now tap. Disney, which ranks 15th among the world’s biggest publicly traded game companies, may have to make a bigger move into mobile games. Activision Blizzard, meanwhile, is invading the turf of the larger media companies by launching its own movie studio.

The Asian game companies that are flush with cash from mobile hits will also continue acquiring game companies in order to expand into the West or become global. China’s companies took a pause as they went private in the wake of the stock market crash in China. But you can expect them to make bigger investments and acquisitions in 2016. Platform owners like Apple, Facebook, Google, and Amazon may also acquire companies to become more involved in gaming.

All of these forces make me confident that acquisitions will continue apace even if game investments are dropping.

9. Markets such as India and Brazil will become much more interesting

Is India just like China was five years ago?

Above: Is India just like China was five years ago?

Image Credit: Atul Bagga

It took a very short time for China to move from a gaming backwater to the world’s biggest gaming market. It owes that growth to the fast adoption of digital gaming on the PC and mobile devices.

As smartphone adoption picks up in other emerging markets such as India and Brazil, we’ll see games in those markets take off. Games are becoming a global business, and they always make their way to the fastest-growing platforms in the fastest-growing markets. After years of slow growth, India is looking promising, and Brazil is close behind. These countries may very well leapfrog Western countries when it comes to mobile growth.

Atul Bagga, a longtime game analyst and the former head of Zynga Asia, estimates the Indian mobile-game market could grow from $200 million today to $3 billion by 2019. Bagga wrote, “India’s smartphone installed base [is] expected to reach 650 million units by 2019, up from 140 million in 2014; it’s driven by a large mobile subscriber base (900 million, or three times the size of the U.S.), a shift from feature-phones to smartphones, increasing smartphone affordability, and new business-friendly government. The demographics of the nation, most of all, make it ripe for the game industry.”

10. The traditional gaming media will lose ground to new ways of reaching consumers

Twitch will reach out globally both with its event presence and with improved infrastructure.

Above: Twitch will reach out globally both with its event presence and with improved infrastructure.

Image Credit: Dean Takahashi/GamesBeat

Social media influencers on channels such as YouTube and the game livestreaming site Twitch have created new stars in the media, such as PewDiePie. A good word from these influencers can make or break a title, and more publishers will seek these people out as an alternative to the high cost of user acquisition, said Perry Tam, the chief executive of mobile-gaming firm Storm8, in an email to GamesBeat.

And if esports pros and fans decide that a particular game is best played as a competitive sport, that title can become hard to dislodge. Its retention will also go up, leading to higher monetization rates.

Amazon has already purchased Twitch for $970 million. You can expect that media firms like Time Warner and Comcast will figure out ways to participate in streaming and esports in order to keep up with their new digital rivals, according to Joost van Dreunen, the CEO of market researcher SuperData Research.


 

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