As the sun sets on 2023, it’s impossible not to reflect on how this year has redefined what we understand as innovation and evolution in the gaming industry. This year wasn’t just about technological advancements; it was about reimagining and restructuring how we interact, create, and perceive games.

Let’s dive into the trends that not only marked 2023 but are shaping the future of this sector.

  1. The Golden Age of UGC in Games: User-generated content (UGC) is not just a passing trend; it’s the new frontier. Platforms like Roblox Games and Minecraft paved the way, and with Epic Games’ Unreal Editor for Fortnite (UEFN) and NVIDIA’s Generative AI tools (NVIDIA Omniverse), I believe the next years will be defined by the explosion of UGC in the gaming world. We are witnessing a creative revolution where players are not just consumers but creators of experiences. The parallel that comes to my mind is the launch of the App Store: what started with simple and even silly user-developed games grew into a major industry and enabled the birth of some of the biggest companies in the last 15 years. Moreover, platforms like YouTube and TikTok that capitalized on user-generated content also grew to become giants and leaders in the gaming industry. UGC shaping the future of games — I see this not only as an economic opportunity but as a cultural movement.
  2. The Uncertain Future of Free-to-Play (FTP): Since the early 2000s, FTP has reshaped the gaming economy, initially driven by hyper-casual titles and now propelling major games like League of Legends and Fortnite. Despite its accessibility, FTP models have faced challenges such as aggressive player conversion strategies and data privacy regulations (LGPD, GDPR, IDFA). These factors are pushing FTP towards more sustainable models, potentially balancing profitability with user experience. Today, we see significant government pressure (notably the aggressive regulation attempt in China that caused market confusion in late 2023). I believe we are heading towards models that value player experience as much as profitability. Studios that master the art of balancing engaging gameplay, appealing progression systems, and ethical in-game purchases will have a bright future.
  3. AI NPC (Non-Player Characters): The integration of AI-controlled non-playable characters (NPCs) is opening innovative paths in games, but their integration into new and existing titles remains a crucial issue. AI NPCs promise to expand and enrich gaming experiences, potentially redefining industry boundaries. The days of robotic and repetitive NPCs are numbered. AI-powered non-player characters are evolving, displaying dynamic personalities, adaptive behaviors, and even the ability to engage in differentiated conversations. The two things that excite me the most about this new trend are the potential for game re-playability, as interactions and story and quest development could be unique in each gameplay, as well as a significant reduction in the production cost of titles that rely on AI-controlled NPCs.
  4. The Impact of PWAs on Game Distribution: With ongoing legal battles (e.g., Google vs. Epic) and legislative pressures, the scene is set for changes. Progressive Web Apps (PWAs) are browser-based applications that offer advantages like speed, offline capability, and broader distribution. This increased accessibility and cross-platform compatibility can significantly influence game distribution, attracting a wider audience. Just as it was with the growth of smartphones and 3G networks, I believe PWA technology can represent an era where games are more accessible and ubiquitous than ever.
  5. Player Revenue Stagnation: Mobile games have exploded since 2015, but most of these new users are in emerging markets (lower revenue per user). Additionally, the successful Free-to-Play (FTP) business model has led tens of thousands of studios to adopt this monetization strategy. Given the rise of “free is the norm” in the gaming industry (Twitch, Discord, FTP games, Fortnite, Warzone, etc.), many game studios have hesitated to disrupt their community by keeping their games behind paywalls. And this is because the gaming community has very high standards and expectations regarding what game studios create (loyalty is hard to earn and lost in seconds). Player revenue stagnation is not a sign of complacency but an opportunity for innovation. The growth potential is immense and is waiting for those willing to rethink monetization strategies.

Reflections and Expectations for 2024

The year 2023 was a year of questioning, redefinition, reimagining paradigms, and searching for new business models and monetization mechanics. At Galaxies, we not only witnessed this revolution; we lived it. We are prepared for 2024 with a sharp focus and a robust strategy to develop projects and partnerships that amplify these trends.

We believe that at the intersection where data, technology, and games meet, there is a universe of possibilities waiting to be discovered. Our vision for 2024 is to take these trends to new heights, investing in solutions and technologies that not only keep up but also anticipate the needs and desires of gamers and industry companies.

The gaming industry is a microcosm of human potential — a place where creativity, innovation, and strategy have fertile ground for spectacular results. And we, at Galaxies, are here not just to observe but to collaborate in advancing this industry, turning every challenge into an opportunity and every click into an insight.