Hello! Welcome back to The Game Business.

It’s a busy one this week. We are announcing our speakers for The Game Business Live in Los Angeles, with EA’s Laura Miele, games legend Jason Rubin and leading analyst Matthew Ball taking to the stage on June 8. Tickets are available now (and paid subscribers can come for free). Full details are below.

Our guest this week is UK government minister Ian Murray, who talks about supporting game studios, and the impact of Grand Theft Auto on the British industry. And we dive into the future of Xbox Game Pass following reports that Microsoft is set to cut the price, having only raised it six months ago.

You can watch or listen to it all above, or read the highlights below. Enjoy!

UK minister: It’s not a problem that Grand Theft Auto isn’t UK-owned

Grand Theft Auto being made in the UK has had a huge impact on the local video game industry, says the UK’s Minister of State for Culture, Media and Sport.

Ian Murray was talking to The Game Business to launch a £28.5 million fund for UK developers that want to get new ideas off the ground. And we discussed how 2026 is shaping up to be a banner year for British games, with titles such as Grand Theft Auto 6, Forza Horizon 6, Fable, LEGO Batman: Legacy of the Dark Knight, Star Wars: Galactic Racer and 007: First Light all scheduled for this year.

However, the majority of those games are not UK-owned, with US firms such as Take-Two, Warner Bros and Microsoft in charge. Is this a problem for the UK?

“Only partially,” Murray told us. “I’ve been to Take-Two in Manhattan and all they talk about is that Grand Theft Auto 6 is being built in Scotland, essentially. You gain from the jobs. You gain from the skills. You gain from the economic activity. You gain from the prestige. I suspect when you talk about other titles like Fable and LEGO Batman, I wonder whether they would be as successful or be as made in the UK if Grand Theft Auto wasn’t the title that it is, and people know that it’s made here.

“Yes, you want the IP to stay in the UK. But actually, for us, in terms of the sector plan, the jobs, growth and the skills, having [these games] made here is a big, big part of that.”

Murray said the issue is not exclusive to video games.

“Paddington is owned by a StudioCanal in France. The refugee bear from Peru, that came into Paddington Station and eats marmalade sandwiches, is owned by the French. But a lot of the economic activity around that is benefiting people here in the UK.

“It’s not ideal. We’d obviously prefer the perfect. But let’s not let the perfect get in the way of the economic activity that these games have. Grand Theft Auto 6 will probably be the largest launch of anything this year.”

He added: “It’s always been a difficulty because there’s always an exit strategy. And that exit strategy for the owners, for the creators, is often selling out to one of the bigger companies, of which some, like Take-Two, are not based here. So, yes, it is a challenge, but we shouldn’t look the gift horse in the mouth of being the creators and having the skills to make great games.”

The new £28.5 million fund is part of an effort to develop more home-grown IP. The fund includes financing for exploring new ideas, building prototypes, and getting games to that initial commercialization stage.

“Hopefully we’ll get some really good people who want to enter the industry as the developers of the future. People who have ideas, but they’ve never really been able to push them on. And then some people who’ve got the idea and prototype, but they want to get it to the next stage,” Murray said.

Elsewhere in our interview:

• Ian Murray believes the UK industry should speak with ‘one voice’ if it wants to secure the same financial support as the TV and movie industry. “The gaming industry is a bit more fragmented. The TV and film industry have been around for a long time. It tends to, as a sector, speak as one voice regardless of who you speak to.

  [Video games] is a relatively fledgling industry. But it’s doing really well […] it’s growing very quickly and I think that things will certainly catch up.”

• I asked Murray if concerns around online safety, and areas such as loot boxes, make it harder to secure support from government. Not at all, he said.
  
  “It probably helps. All of these issues that you’ve raised, they are concerns not just for government and the public, but for industry.
  
  “There’s nobody in the gaming industry that wants to harm children. There’s nobody in gaming that wants loot boxes to be ripping people off. There’s nobody in the industry that wants games influencing young people to do bad things. Nobody wants that in the industry. Nobody wants that in government. So, it’s important to have a partnership about how we resolve some of those issues. And of course, when you’re talking about these issues, you always go to extreme case studies to make the point. But actually, the good guys always do the right things, and the bad guys always do the bad things. And it’s up to us to find that balance of how you regulate properly to protect audiences and to make sure there’s a level playing field for the good guys.”
  

• Last year, when Clair Obscur: Expedition 33 won numerous awards and sold millions of copies, the French government celebrated it by awarding its developers with knighthoods. Why doesn’t the UK celebrate its successes in the same way?
  
  “If we were the US, we’d be puffing out our chest, putting up the flags and marching up and down the main street championing what we do,” Murray noted. “We have traditionally not done that from a cultural perspective. Let’s go and puff our chest out and try and be a little bit more bombastic about how good we are at this stuff and sell ourselves a bit better.”

Check out our full interview above.

How do you solve a problem like Xbox Game Pass?

The big story this week is that Xbox is set to change the pricing on Game Pass. Again.

This time the subscription service will receive a price cut, just over six months since its whopping 50% price hike in October last year. The catch? Brand new Call of Duty games could be excluded from the service (or at least will need to be added on).

A drop in users was inevitable after that initial hike, but Xbox would have expected a rise in revenue overall. Xbox boss Asha Sharma reportedly told staff that Game Pass had become ‘too expensive’, so presumably it’s lost more players than anticipated.

Unfortunately, lowering the price won’t instantly win those players back. There’s a re-convincing job that needs doing, although with an upcoming slate of Forza, Fable, Gears of War and Halo, it’s at least got the software to make a compelling case.

However, a price change is a short-term fix. There’s a longer-term reckoning that needs to happen with Game Pass.

Regular readers will know I’ve had my doubts about the subscription service. In 2018, Microsoft made the disruptive decision to put all of its games into Game Pass, including brand new AAA titles. That proposition is now only available to subscribers of the ‘Ultimate’ tier, but it remains Game Pass’ unique selling point.

There is clearly an audience of hardcore Xbox players that wants this. And according to Microsoft, because of Game Pass, that audience is playing a wider variety of games, and spending more, too. That’s a good thing.

However, for Game Pass to truly succeed long-term, it needs to go beyond the hardcore. The problem is that most gamers don’t play enough new games to justify the cost. According to Circana, only 15% of US gamers buy more than four new games a year. Game Pass Ultimate has an annual cost of $360, which is the equivalent of over five $70 games. So, the math doesn’t add up for most players. A game subscription service doesn’t have the same appeal as a TV or music one, because the consumption habits are different.

Perhaps Game Pass could adopt a ‘credits’ system. Players subscribe and receive a certain number of credits to spend on games. A new Call of Duty will use a lot of credits, while an old classic will be much cheaper. It’s still a full buffet, just not ‘all you can eat’. It could work, but it sounds complex.

A simpler solution would be to jettison new releases entirely and adopt the PlayStation model, where you get a wide selection of back catalogue games but not new ones. I think there’s a legitimate argument around doing that.

It all comes down to this question: what does success even look like for Xbox? As a division it seems a little lost. Caught between being a major third-party publisher and a platform.

It’s also caught between being a video game company and a division of Microsoft. It’s easy for me to say that Xbox needs to get back to basics and just make some hit games, keep them exclusive to its platform, and stop trying to disrupt everything all the time.

But Microsoft doesn’t want Xbox to spend its energy fighting for second place in the PC and console market. That cannot be the ambition. That not why it spent $70 billion on Activision Blizzard.

So, what is the ambition? Is it streaming? Is it subscription? I don’t believe either of those are the future. And judging by the cuts at Amazon (and before that, Google), Microsoft’s big tech rivals don’t seem to believe it is, either.

The Game Pass experiment has caused some damage. It’s eroded the margins on Xbox’s first-party games to such an extent that it’s had to publish them on PlayStation and Steam, undermining its platform business in the process.

Xbox needs to find a purpose. A goal it can point its considerable talent and resources at. Right now, it’s trying to be a subscription business, a major third-party publisher, a digital retailer, a streaming platform and a console. That’s a lot, and many of those areas get in the way of each other.

Xbox needs to find its focus. And I’m not convinced that’s Game Pass.

EA’s Laura Miele and game legend Jason Rubin headline The Game Business Live

EA Entertainment president Laura Miele, video game legend Jason Rubin and leading analyst Matthew Ball will headline The Game Business Live this June. Tickets are available now.

The event takes place on Monday, June 8 at The Grammy Museum in Downtown Los Angeles, hosted by Christopher Dring and Geoff Keighley. It is part of the Summer Game Fest program of events.

The Game Business will conduct live on-stage discussions with Miele, Rubin and Ball. Ball will discuss the state of the industry, and react to some of the key reveals during Summer Game Fest. Meanwhile, Rubin will look back at his huge career in games, from co-founding Naughty Dog and directing Crash Bandicoot, to stints at THQ and Meta.

We will also sit down for an interview with Laura Miele, who leads EA Entertainment, which oversees major franchises including Apex Legends, Battlefield, The Sims and Skate. Miele has spent over 30 years in video games, with a proven track record in developing creative teams and delivering business results.

Paid subscribers to The Game Business can attend The Game Business Live as part of their subscription. Check your inbox on how to register to attend.

Subscribe now

Alternatively, tickets can be purchased separately through here.

Finally, Summer Game Fest: Play Days Industry Day badge holders will also be eligible for access to The Game Business Live as part of their purchase. Summer Game Fest: Play Days is an invite-only event that will feature hands-on experiences from the industry’s leading publishers and developers. Video game industry professionals interested in attending Industry Day (June 8) can apply for consideration here.

Interested in sponsoring The Game Business Live? Please contact info@thegamebusiness.com

Meanwhile…

• Roblox is launching a new subscription service: Roblox Plus. Beginning April 30, Roblox Plus will cost $5 a month and offers discounts on in-game items and other ‘exclusive’ benefits. Roblox will cover the cost of the discounts so it doesn’t impact the revenue for creators.

• Sticking with Roblox, the company is adding two new accounts for minors: Roblox Kids for children between five to eight, and Roblox Select, for ages nine to 15. The new accounts, which launch in June, will align content, communication options, and parental controls with an age bracket. Roblox is also adding new parental controls including the ability to block specific games, manage direct chat, and approve games that are not otherwise available to an age bracket. Roblox has come under criticism for not doing enough to protect young people online, and this is part of its on-going efforts to solve that.

• PS5 hardware sales surged in the US during the week ending April 4, according to Circana’s retail tracking service. It comes just ahead of the console’s $100+ price rise. “US spending on video game hardware for the week nearly doubled when compared to the same week a year ago,” wrote Circana senior director Mat Piscatella.

• The UK video game market reached £8.7 billion in 2025, according to the trade body UKIE. Software sales grew 7% to £6.03 billion, hardware sales increased 3% to £2.17 billion, sales of game-related films, TV shows, and soundtracks increased 70% to £159 million, while toys and merchandising rose 43% to £333 million.

• According to data leaked by a hacking group, Grand Theft Auto Online is generating around $1.3 million a day. It matches analyst estimates that the Online mode makes around half a billion dollars a year. Take-Two’s share price rose as a result of the leak.

That’s it from us today! Join us next week for more news, analysis and interviews.

EA Entertainment president Laura Miele, video game legend Jason Rubin and leading industry analyst Matthew Ball will headline The Game Business Live this June. Tickets are available now.

The event take place on Monday, June 8 at The Grammy Museum in Downtown Los Angeles, hosted by Christopher Dring and Geoff Keighley. It is part of the Summer Game Fest program of events.

The Game Business will conduct live on-stage discussions with Miele, Rubin and Ball. Ball will be discussing the state of the industry, and reacting to some of the key reveals during Summer Game Fest. Meanwhile, Rubin will look back at his huge career in games, from co-founding Naughty Dog and directing Crash Bandicoot, to stints at THQ and Meta.

We will also sit down for an interview with Laura Miele, who leads EA Entertainment, which oversees major franchises including Apex Legends, Battlefield, The Sims and Skate. Miele has spent over 30 years in video games, with a proven track record in developing creative teams and delivering business results.

Paid subscribers to The Game Business can attend The Game Business Live as part of their subscription. Check your inbox for how to register to attend.

Subscribe now

Alternatively, tickets can be purchased separately through here.

Finally, Summer Game Fest: Play Days Industry Day badge holders will also be eligible for access to The Game Business Live as part of their purchase. Summer Game Fest: Play Days is an invite-only event that will feature immersive exhibits and hands-on experiences from the industry’s leading publishers and developers. Video game industry professionals interested in attending Industry Day (June 8) at Summer Game Fest: Play Days can apply for consideration here.

Interested in sponsoring The Game Business Live? Please contact info@thegamebusiness.com.

Hello hello,

Tomorrow we will be announcing our line-up for The Game Business Live in Los Angeles, which is part of Summer Game Fest.

The event takes place on Monday, June 8 at The Grammy Museum in Downtown Los Angeles. And we will be interviewing, live on stage, a senior leader at one of the world’s biggest video game publishers, plus a genuine industry legend behind one of the world’s most famous video game studios. We’re very excited. Myself and Geoff Keighley will be there.

Tickets go on general sale tomorrow. But paid subscribers (that’s you) can sign-up today. Tickets for paid subscribers are free*.

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The studio was formed in 2022 by Konrad Tomaszkiewicz, the director of The Witcher 3. He initially funded the studio himself, quickly found investment, and its first game - the AAA open world RPG The Blood of the Dawnwalker - is nearly ready for release.

“I am surprised that it went so smoothly, to be honest,” Tomaszkiewicz says on today’s edition of The Game Business Show. “Everybody was saying that recruiting the team is this really hard thing, bur for us it was quite easy because people wanted to work with us. People said that creating the game is a really hard thing, but we’re getting really good results from the focus tests. We’re confident. I’m surprised that we haven’t encountered big problems.”

This doesn’t necessarily make for an exciting edition of The Game Business.

“I know, I’m trying,” he says. “But it is hard for me to say something went really wrong, because it’s coming together really well, and the people are happy. This is the biggest reward for me, I have a happy team making a great game.”

There was some drama before the launch of Rebel Wolves. Tomaszkiewicz had worked across all three The Witcher games, beginning as a junior tester on the first before rising up to lead development on the third. He also held a leadership position on Cyberpunk 2077. Over that time, CD Projekt changed significantly and Tomaszkiewicz found that difficult. In 2021, he was subjected to an internal investigation over allegations of workplace bullying. He was found not guilty, but left anyway and apologized to staff for “all the bad blood”.

Tomaszkiewicz had found himself in an environment where he had to be a boss, when he just wanted to make games.

“It’s different working with 150 people than 500 people. At Rebel Wolves, we have 160 including administration, the publishing department and so on. And I am among the people all the time. I’m working with everyone side-by-side, speaking with everyone… I know everyone. When you have 500 people, the management is like 100-plus people. With Cyberpunk it was 125. It is not possible to know everyone or to work with everyone every day. The creative process, the fun, is different. And I didn’t want to work like this anymore. I want to work like we worked in the past, with a smaller amount of people, struggling and fighting for solutions in every area of the game.

“I’m creating, and I’m not just someone on top who is testing the game and disconnected from the people.”

Tomaszkiewicz says he considers himself more a leader than a boss.

“My role is not to tell people exactly how to do stuff,” he explains. “My role is to help them get to the final solution.

“This is something totally different than being only the boss, because when you try to force people to do something, in 90% of situations, it’ll fail. In our industry, people are artists and they need to have ownership. They need to feel that they’re creating. My role is to show them the direction where I want to go, but it’s their role to achieve it, because then they fulfil that creative need. When you’re stealing it from them, and saying: ‘I want to do it exactly like this,’ they are not the artist anymore. They are outsourced. And they’re not motivated.

“It’s important to remember that what we are doing is an art. And to create it, you need a really good team that is well motivated and wants to create the best game in the world. And who are your allies in this, let’s say, war of creating. Because making a game is not easy. Every department is doing different stuff. The technological dependencies between them are so complicated that it’s really easy to break the game.

“To create something that is special is really hard. And to do it, the team is the most important thing. The vision is important, but vision without the team to achieve it is nothing.”

Art over money

Tomaszkiewicz wanted a studio where people can “grow old together”. And part of that was to build a company driven by art, not finances.

The Blood of the Dawnwalker might look like ‘The Witcher with vampires’, and that probably would have been enough for gamers to get on-board. But there are a lot of new concepts being tried here, and that comes from the artistic need to do something different.

“The problem in this industry sometimes is that people opening companies are thinking [too much] about how to make money,” he begins. “This is a really cold approach for the games. You cannot create art like this.

“I gathered around me people who love RPGs, and from the beginning we knew that we wanted to create story-driven, open world games with some twists. Opening a new company to do exactly the same things we did in the past is a problem, because we’ll not feel that we’re evolving, or developing ourselves. It was really important for us as artists. We want to push the boundaries of AAA RPGs by adding some risky stuff, which gives you more immersion, more emotions, and a different feel when you play.

“I think that this [idea] is growing these days, because when you look at Clair Obscur, or Crimson Desert right now, those games are different. They are not a copy of other AAA games, but delivering something quite fresh. And I’m really glad of it because I’m starting to feel like I did in the 1990s when I played games on my 286 PC, or even on the Atari where every game was different game. Every game was some unknown. We want to deliver a similar experience for people.”

Even so, The Blood of the Dawnwalker is inevitably going to get compared to The Witcher. Is he comfortable with that?

“Really comfortable. I feel really confident about our game.”

Investor frenzy

In the beginning, Tomaszkiewicz funded the project himself, before taking it (and Rebel Wolves) to outside investors. 2022 was not an easy time to seek funding, but he wasn’t short on offers.

“We were in a different situation than the other companies, because we had people on-board with a really good track record,” he explains. “We started to work on the Unreal Engine. We had the whole presentation about the vision, what we wanted to achieve, and all the documentation around the costs. It was really clear to investors that we knew what we were doing. We spoke with a few companies, and all of them wanted to invest, and we were in the situation where we had to choose one of them.”

In the end, the team took funding from Netease.

“One or two days after meeting Netease, we got the term sheet through. It’s hard to believe, but the team, plus a really good idea, all documentation, including the commercials, showed that we know what we are doing.”

The final leg

The Blood of the Dawnwalker is nearing certification. It’s almost ready. And it’s doing well. There was positive buzz coming out of Gamescom last year, and according to GameDiscover, it’s approaching one million wishlists on Steam. There are other RPGs ahead of it (including Microsoft’s Fable), and it’s a busy year for big games. But if Tomaszkiewicz is worried, he isn’t showing it.

But then the ambition for Rebel Wolves is a modest one. Tomaszkiewicz isn’t trying to create a second CD Projekt. In fact, he wants to do the opposite.

“The vision for our team is to stay the size we are,” he concludes. “Maybe we’ll need some help in some areas after this game comes out, so we probably will grow a little. But I’m afraid that if we grow more, we’ll lose this communication and process we have right now. I want Rebel Wolves in 10 years to be exactly the same size.

“I want to sell [enough copies] of [The Blood of the Dawnwalker] so we can secure the production of the next two games, and create some unique stuff. I don’t have a vision to create this big corporation that will do five games at the same time and be huge. I want to stay small. I want to enjoy making games as I am right now.”

Thank you for joining us on today’s The Game Business Show. We’ll be back Thursday where we’ll be speaking to a politician about the video game business. Until then, thank you for reading.

It has been a very quiet seven days for video game industry news. This coming week promises to be a little busier, and it certainly will be for us, as we’re travelling around London Games Festival, hosting talks and attending the BAFTA game awards. If you see us, do say hello.

But although last week was quiet, there were a few interesting developments to let you know about. So, let’s take a look.

Amazon simplifies its Luna game streaming service

In Brief: Video game streaming platform Amazon Luna will no longer feature game stores, individual game purchases or third-party subscriptions. This means players will no-longer have access to the EA, GOG or Ubisoft stores via Luna, and Ubisoft+ and Jackbox Games subscriptions are being discontinued on the platform.

What You Need To Know:

• A-la-carte game purchases are no-longer available via Luna. Previously purchased titles will stop working from June 10, 2026 and will be removed from Amazon Luna. Players are not eligible for a refund.

• Gamers who had bought games via EA, GOG or Ubisoft stores could play these games via Luna. Going forward, that will no-longer be possible.

• Luna users will be eligible for a complementary Luna Premium subscription as a ‘thank you’ for supporting the service so far.

Read more

Hello and welcome back!

We’ve managed to go this long without doing a full AI-focused edition of The Game Business. But today I really wanted to share with you this chat I had with Jon Gibson, the head of transformation at Keywords Studios.

Keywords works with major game developers around the world, so it has quite a nuanced perspective on AI. And I found what Gibson had to say fascinating. He talked about AI being in its ‘chaos’ phase, and how few studios have worked out how to use it within their pipelines. It’s a great chat and I’ve selected some choice quotes below. Of course, you can also check out the full interview above, on YouTube, or via all good podcasting platforms.

Also this week we touch upon the Super Mario Galaxy movie, and the familiar sounding Netflix Playground. Enjoy.

The uncomfortable truth about AI

Keywords Studios has tested over 500 AI game development tools, and found only ‘half a dozen’ actually help ‘in the right way’.

That’s according to Jon Gibson, head of transformation at Keywords Studios. Gibson joined us on The Game Business Show ahead of his GDC talk on ‘the uncomfortable truth about AI in game production’, where he discussed how “everyone’s focusing on building better AI, and no one’s really focusing on how to use it in a live production environment.”

He said: “AI feels like it’s in the chaos phase right now. And we need to move to the usable phase. How do we use AI in live production environments? How do we use AI in a way where it complements teams rather than potentially threatens teams? And also how do we use it in a context where it’s governed, it’s controlled, it’s IP safe, it’s legally safe, it’s ethically and morally safe? The gulf between cool AI demos where you put in a prompt and you get something amazing, to actually AI in production where you get consistent, high-quality results steered and directed by humans, is quite a big leap.”

He continued: “A lot of people focus on what’s cool. They focus on the tool itself or the model itself, rather than what they’re trying to do. A company will use a tool or build a tool without a specific use case and try and cram it into their production pipelines, rather than flipping that problem around and saying: ‘What are our pain points? What are we trying to solve?’ And then building a tool against that.”

Gibson said that most AI game development tools are currently not fit for purpose.

“There’s a lot of garbage out there,” he explained. “We do a lot of R&D within Keywords. We tested about 500 different AI tools on some of the R&D projects we’ve done, and there’s about half a dozen that we feel complement development in the right way.”

The focus on cool AI tools, rather than how they might fit within development pipelines, is potentially exacerbating concerns amongst game makers. Gibson pointed to the GDC State of the Industry report, which revealed that 36%* of developers are using AI, but 52% don’t approve of its use. [*Note: Gibson incorrectly said 90% in the interview].

“I think not having controls and governance around AI is part of that issue,” Gibson said.

“A lot of companies are not really explaining to their people why they’re using AI, and why it’s a good thing, and what the strategy is. They’re going into using AI models without that clarity. And it concerns developers.”

Ultimately, AI tools will only work if the culture within the organization supports the strategy, he said.

“That culture is really about helping developers understand what they’re using, why they’re using it, and how it affects them and how it affects their roles specifically.

“There are very few people I meet who are totally closed off to using AI in game development. What you find is people asking questions, which a lot of businesses are currently unable to answer. We’re gradually reaching a point where those questions are being answered and people are becoming more comfortable and confident about the usage of AI in game development.”

He added: “It’s a slow process. That statistic of 52% of developers being concerned about the usage of AI, that’s gone up every year for the last three years. As AI tools and AI models and AI technology in general has become more prevalent, the lack of understanding and the concern has increased. Until we’re able to work out how to meaningfully build this technology into production pipelines in a way that is safe, in a way that adds value, in a way that complements the talent that already exists in this industry, and doesn’t threaten that talent, I think there’s always going to be that level of concern.”

Overall, Gibson told us that AI will have a meaningful impact on game development. He compared the technology to the shift from 2D to 3D, which also proved chaotic until game development pipelines caught up.

“We’re at that same phase with AI,” he said. “It’s impressive. It’s amazing. It’s transformative. It’s revolutionary. But going from a single prompt and something amazing, to something consistent and high quality that can be used in game development, that’s where the gap lies right now.”

Netflix targets 14.5 million US gamers with new Playground app

Streaming giant Netflix has ramped up its bid to win over kids and parents with a new mobile app featuring the likes of Peppa Pig, Sesame Street and Dr Seuss.

The Netflix Playground (not to be confused with the Nex Playground) will feature a selection of games available to all Netflix subscribers that feature no ads, in-app purchases or extra fees. The games can even be downloaded and played offline.

The kid’s games market is significant. According to Ampere, there are 14.5 million gamers under nine years-old and four million under five. But with growing concerns over the digital health of children, there’s been an increased focus around online safety and screen time management for younger players.

Kids giant Roblox has struggled with this conversation, with parents growing concerned around the title’s social tools and user generated content. 35% of verified users on Roblox are under the age of 13.

Netflix isn’t the only new competitor targeting kids and parents in the video game space. The camera-based game console Nex Playground has proven to be a hit in the US, and also features trusted kids brands such as Sesame Street, Peppa Pig and Bluey. It also adopts a subscription model, with no in-app purchases.

Of course, the other major player in the market is Nintendo, with its high-profile kids brands such as Mario and Pokémon. The company has sold over 170 million Nintendo Switch and Switch 2 consoles worldwide.

Meanwhile…

• The Super Mario Galaxy movie delivered $372.6 million in revenue for its five-day opening weekend, which basically (but not quite) matched the $375 million of the original film. Mario is now the only animated movie franchise to have two films that delivered more than $350 million in its opening weekend. The film didn’t do great with critics, with a 42 on Rotten Tomatoes. But fans were happier, with an 89 fan score. The film had a budget of $110 million.

• The Super Mario Galaxy 1 and 2 collection for Nintendo Switch jumped up the charts in the UK following the film’s release, with sales up 107% week-on-week (physical sales only). However, the game missed out on the Top Ten (Nielsen IQ data). Nintendo is set to release two games starring popular characters from the film in the coming months, including a new Star Fox and Yoshi game.

• In what is a rare moment for the mobile video game sector, Supercell CEO and co-founder Ilkka Paananen will be awarded the prestigious BAFTA Fellowship next week.

• Hazelight has now sold 50 million games across its three titles. 2018’s A Way Out has sold 13 million copies, 2021’s It Takes Two is on 30 million, and 2025’s Split Fiction has sold seven million copies so far.

• The United States Patent and Trademark Office has rejected Nintendo’s patent around in-game characters summoning a sub-character to aid it in combat (as seen within the Pokémon series). Nintendo has two months to respond, with the option to extend if necessary. It is all part of Nintendo’s on-going case against the 2024 game Palworld, which it believes infringes on multiple patent rights.

• This is potentially good news for Hello Games. The No Man Sky developer just announced a new No Man Sky expansion which appears to be similar to Pokémon. It’s called Xeno Arena, a new feature where players explore the universe to collect a team of creature companions, then use them to fight other creatures in turn-based battles.

• Five independent studios have established an ‘alliance’ called Nova Assembly. Developers Unfrozen, Sad Cat Studios, VEA Games, Weappy and Game Garden will share expertise and resources, and even establish their own publishing division to handle marketing, distribution and community. In total, the Nova Assembly has ten titles in development.

• The Nintendo Switch 2 version of 007 First Light has been delayed until later in the summer. Developer IO Interactive said that the Xbox, PlayStation and PC versions are still set for May 27. Hopefully this one doesn’t do a Borderlands 4 and disappear entirely.

• Eidos Montreal has laid off 124 employees, with studio head David Anfossi also leaving the developer. The redundancies are reportedly the result of the cancellation of a long-in-development new open world IP.

That’s it from us today! We’ll be back next week with more interviews, news, analysis and insight. Plus, full details for our upcoming The Game Business Live event in June. Until then, thank you for reading.

Kickstarter has been growing again.

In 2024, 463 video game projects were funded on Kickstarter, which is the highest number in the platform’s history. The figure dropped slightly in 2025 to 443, but that’s still the second-best year.

In terms of money, $26 million was raised for video game projects in 2024, the highest figure since 2015, and 2025 broadly matched it.

2025 saw bigger success stories, too. 11 projects raised more than $500,000 last year, which is the highest number of projects in that band since 2015, and more than twice the number from 2024.

This data is courtesy of ICO Partners. And although the figures are clearly positive for crowd-funding, we’re still talking relatively low numbers overall.

“400-plus games a year that get funded on Kickstarter… that’s about two weeks of Steam releases,” says ICO Partners CEO Thomas Bidaux.

“It’s stable. It’s growing. It’s not insignificant. But this is not something that people are going to in droves to get funding.”

The investment landscape is tough. Publishers and investors are scaling back the projects they’re signing and the money they’re spending. By contrast, Kickstarter is showing signs of stability and even growth.

So, why are we not seeing even more games turn to crowd-funding? Particularly those games that just need a little bit extra to get the over-the-line?

We dived into the subject with Bidaux and head of games at Kickstarter Asher McClennahan.

Kickstarter doesn’t work for all games

“I have three red flags,” Bidaux begins. “One is games for kids. They don’t work because getting parents to put money into a project that has a delivery in six to 12 months is very unlikely.

“My second red flag is mobile. The people we see back projects on Kickstarter are very PC-first and then console. Mobile almost doesn’t exist, and very difficult to do. Distributing the keys is difficult. Apple and Google don’t have the Steam option to basically get free keys. And the price point for mobile games is, on average, lower than a PC game. So, getting a significant amount of money from the mobile space is extra difficult.

“My third red flag is free-to-play. Free-to-play is kind-of the opposite of crowdfunding. Crowdfunding happens six to 12 months before you even play the game. Maybe you have a demo, but maybe not. You’re saying: ‘Give me money because you know you’ll love it.’ The philosophy of free-to-play is: ‘Don’t give me money, try it, and maybe down the line you’ll pay me.’ They’re both very community driven, but it’s difficult to communicate to people why they should give money now.”

It’s hard to know the value of the items that developers may be giving away with free-to-play Kickstarter campaigns, Bidaux explains.

“You can have a hat or a cat or whatever, visual items, but the value of that is difficult to project. I know a video game is $20 or $30 or $50, because of that genre. But how much is a hat? $1? $50? You need to play the game to have that sense. People have done things where if you give them $50 on Kickstarter, you’ll get a $100 worth of in-game currency. But then maybe everything is super expensive and $100 is nothing?”

Bidaux stresses that there are always exceptions.

“These red flags can be disproven. There’s a game called Epitome that just finished a Kickstarter campaign. They did a €500,000 Euros with 20,000 backers, and they are a free-to-play MMO. They went deep into the nostalgia of MMOs from 10/15 years ago, and that resonated with people. But they’re free-to-play. These aren’t hard rules.”

Crowd-funding is time consuming

The energy and time that goes into maintaining and supporting a Kickstarter campaign, particularly for a smaller team, can be significant.

“This will require energy, effort and probably dedicated resource in order to deliver on it,” McClennahan says. “It is so hard. It is so worth it, but it becomes all of your being while you are planning for and running your campaign. I want people to come in eyes wide open.”

Bidaux adds: “A crowdfunding campaign is an exercise in time. Before you launch the Kickstarter campaign, you need to do the Coming Soon page. This is where you can pre-launch your page. And then when you push the button, they’ll get notified about it. It’s such a good exercise to do that everybody should do it. But you need to leave at least three months between your Coming Soon and your Kickstarter launch. So, four months of Kickstarter is a thing you need to manage as a studio when you have other things to worry about.”

What’s more, a Kickstarter campaign can’t come first.

“Kickstarter brings you about 30% of your backings,” McClennahan continues. “For every seven backers that you bring to the platform, Kickstarter will naturally bring you three to four generally. That is to say, you still need to find that other 70%. And so that’s your Discord communities, your paid advertising, your email newsletter, getting people excited at shows and getting them to follow the pre-launch page.”

Kickstarter backers can’t leave Steam reviews

One thing that puts some developers off Kickstarter is the inability for backers to leave Steam reviews once the game is out.

“The way Kickstarter functions for video games, you’re going to Steam and saying: ‘I’ve got 1,000 backers, can I have 1,000 keys for those backers?’ Those backers are your super ultra fans. Then, they download the game, put a review… but that review doesn’t count, because they were given a free Steam key.”

However, Bidaux feels this concern is unwarranted. A lot of the people who utilize Kickstarter aren’t just doing it for the extra funds, but as a marketing tool. It creates a 30-day window where a new game’s most active fans are highly engaged with the project, sharing it and talking about it ahead of release.

“Yes, you are going to lose some reviews from your most hardcore fans,” Bidaux acknowledges. “But you will have hardcore fans who are not going to go to Kickstarter. Maybe they don’t like crowdfunding. Maybe they don’t have the money that month. Maybe they missed it. You don’t lose all your fans.

“But also the uplift you get from a Kickstarter campaign in terms of visibility makes up for it. I’ll give you an example of a French project called The Witch Bakery. They launched their Kickstarter campaign with 10,000 [Steam] wishlists. And then by the end of the campaign, they had 37,000 wishlists.”

Early Access can be more effective

One of the biggest rivals to Kickstarter isn’t another crowd-funding platform, but rather Early Access. With developers typically turning to Kickstarter later in development, for some studios, it can make more sense to create and release an Early Access version instead. That means they can build a community and generate revenue until launch, not just for 30 days.

But Early Access isn’t suitable for all games. Story-driven titles, for instance, would have the game spoiled via an Early Access release.

“And there are systemic games that go to Kickstarter, and then do an Early Access,” Bidaux adds. “They’re not exclusive from one another, but we see those trends.”

… but there is room for more video games on Kickstarter

“I wish it would grow. There’s a lot more room, as we’ve seen [by the number of] tabletop games,” Bidaux says.

“It will grow slowly and it will be more along the lines of this being a good marketing exercise. We have a finite number of marketing beats for a video game and developers will be like: ‘We could do with more. Maybe we should do a Kickstarter campaign?”

McClennahan concludes: “It is growing. 2024 was a great year for us, 2025 [had] 10%-ish more video games on the platform. And from the conversations that I’ve had, there are even more coming in 2026.”

For the full interviews with Bidaux and McClennahan, check out the links to the video and podcast above.

That’s it for us today. We’ll be back on Thursday for more news, analysis and insight. Until then, thank you for reading.

This is our mini-edition of The Game Business for paying subscribers, where we look at some of the biggest stories of the previous week, and give our own take on what is happening.

It has been Spring Break, and that means it was a slightly quieter week when it comes to big stories. In fact, the biggest video game story wasn’t about a video game at all, but rather the blockbuster success of The Super Mario Galaxy movie.

But there were a few other developments, including job losses at Eidos Montreal and Coffee Stain, an acquisition of a new Japanese game developer, Nintendo third-party data and Xbox is going on tour.

Let’s take a look.

Fans defy the critics (again) with blockbuster Super Mario Galaxy movie

In Brief: The Super Mario Galaxy movie delivered a massive opening weekend with $372.5 million gross over five days. The film made $190 million in the US and a further $182.4 million internationally (the Japan release is still to come). It is slightly below the first Mario movie, which managed $375 million over five days, but it is comfortably the biggest movie launch of 2026. The strong result comes despite a negative critical reaction.

What You Need To Know:

• The film had a budget of $110 million.

• Mario is the only animated movie series with two films that have exceeded more than $350 million during its opening weekend.

• It is already the No.9 highest-grossing video game movie ever after just five days. The biggest is the first Super Mario Bros movie, which finished on $1.36 billion.

• At the time of writing, the film has a 42 Critics rating on Rotten Tomatoes, but a 89% rating from fans. The first film finished on a 59 Critics rating and a 95% fan rating.

• It was a similar story with last year’s A Minecraft Movie. It had a critics rating of 47, a fan rating of 84, and generated $955 million at the Box Office.

Read more

It’s Spring/Easter break, and I know some of you are spending the week (or two weeks) finding ways to keep the kids entertained. I’ve already taken my little ones to see the Super Mario Galaxy movie, and I imagine we will end up going again before the schools are back. And… I’m ok with it. I’m sorry film critics. I thought it was fun.

Anyway, we sadly don’t have a normal edition of The Game Business for you today. But I do have something, plus a couple of updates.

The something is an unusual interview. In October last year, I conducted the keynote chat at the Game Republic New Horizons conference with someone outside of video games - stand-up comic and Taskmaster star Maisie Adam.

Adam is a well-known comedian in the UK and a regular on our TV screens. We had a good conversation where we discussed some of the similarities between stand-up comedy and video games, and the event’s organizers kindly supplied us with the video footage. However, it’s not exactly a business interview, and the recording quality isn’t the best. So it’s been sitting on our digital shelf for the best part of six months.

But with Adam back on our screens as part of Amazon’s Last One Laughing, and following our conversation with the Dispatch developers earlier this week where we touched upon comedy games, we thought: why not just put it out there? So here it is.

We’re releasing this just as a video (the audio is a bit rough for a podcast). And you can watch it above, or via our YouTube channel.

The Game Business on tour

We’re out and about quite a bit this year. In two weeks, you’ll find us at London Game Festival hosting panels and interviews. Our biggest one is on Tuesday as part of The Games Finance Market, where I’ll be chatting to Matteo Sapio, the chief strategy officer at Vampire Survivors developer Poncle. That’s on Tuesday, April 14.

Then in October we will be speaking to a real legend - the father of PlayStation himself Ken Kuturagi. This is part of Game Republic’s next New Horizons event on Thursday, October 15. Tickets are on sale now.

We’ll be handling the recording for these, and they will be released as future episodes of The Game Business Show.

But what of our own event, The Game Business Live? Well, we’ll have a lot more on that next week.

If you don’t know what The Game Business Live is, it’s a mini-conference that we run in Los Angeles as part of Summer Game Fest. We effectively record live versions of The Game Business Show in front of an audience, with plenty of time for networking. Tickets cost $100. But, if you’re a paid subscriber to The Game Business, you can come for free (well, as part of your subscription). And a subscription to The Game Business are… $100. May as well, right?

Subscribe now

The Game Business Live is on June 8 at The Grammy Museum in Downtown LA. I’ll be there, Geoff Keighley will be there, plus some special guests that we’ll be announcing imminently. Stay tuned for that.

That’s all my updates for now. We’ll be back next week with your usual editions of The Game Business newsletter and Show. Until then, I hope you have a great weekend.

Listen now on Apple, Spotify or YouTube

In This Edition,
AdHoc Studio’s Michael Choung and Nick Herman on…
- Failing to find money
- The interactive narrative genre
- Self-publishing
- Comedy games

Dispatch has now sold four million copies.

If you missed this game, Dispatch is an interactive, narrative-based, superhero workplace comedy. It boasts an impressive cast from the worlds of Hollywood and video games. And it was the debut title from AdHoc Studio, which was formed by veterans of Telltale Games.

It also almost never came out.

“We’ve been going to all these conferences for seven years looking for money and trying to make the next six months work. It’s been hell,” says creative director and co-founder Nick Herman.

CEO Michael Choung adds: “Nick jokes that we could make a whole series of Final Destination movies based around all the near misses and existential threats that we’ve had to weather.”

Dispatch began as a live action project that got closed down because of the pandemic. It was repurposed as an animated game, found a publisher, but then that publisher dropped it.

By now the market had shifted. Investors and publishers had become risk averse, and Dispatch was seen as a gamble.

New IP is always a risk, but the bigger concern was the genre itself. Interactive narrative games just weren’t selling in big numbers.

“We were looking at it differently in terms of the size of the opportunity,” Choung says. “You’re not going to hear more cynicism around the limited appeal of these games than from people that actually make them. [But] we knew that these games had a ceiling that hadn’t been seen before. We knew that the opportunity was massive. So, we set out to prove that people are looking at it in the wrong way. It’s almost the thesis of the studio.”

But that was a challenging argument to make.

“We’re founded by two writers and two directors,” Herman says. “You talk to any [investor or publisher], and those are the least useful people in their minds: ‘Where’s your programmer? Where’s your designer? You don’t have anyone who worked on Halo?’

“Then you go to Hollywood and they don’t understand games. Both those conversations were difficult.

“Then when you finally get someone who does understand, they’re telling you: ‘These things aren’t selling very well anymore.’ And you have to explain why those other games that had a lot of money put into them - and you’re sometimes talking to the people who put the money into them - didn’t make it. You have to tell [these investors] they’re wrong. Then they don’t believe you and you start to wonder if you know anything.”

Ultimately, Herman says, they had to convince investors they were better than the other narrative game makers out there.

“It feels gross,” he admits. “But we had to push through the grossness to get here.”

There were other reasons Dispatch seemed risky to potential backers. The episodic model is hit and miss, so AdHoc “stopped telling people” that was the plan. It’s also a comedy, and the developer was repeatedly told “comedies don’t sell in games.” In fact, it almost discouraged them from going down that route entirely.

“We had such a stack of things that felt like risk, adding yet another one via genre felt egregious,” Choung recalls. “It took some time and convincing.”

Herman felt that investors were confusing comedy games with games that were trying to be funny, but weren’t.

“It’s not like there’s all these incredible, hilarious games that no-one is buying,” he says. “It’s a trust fall where we’re like: ‘We can actually be funny in our game’. But we had to prove it.”

Dispatch wasn’t cheap to make, either. By 2024, the developer had 30 employees, it had an outsource animation partner, and a cast of world-famous actors. Choung described the budget as being “on the middle, lower-end of the AA space”.

But AdHoc did manage to keep costs down. Herman says that partners and actors read the script, saw the animation, and were eager to help, especially as this was a debut project. Of course, after four million sales, “a lot of those [fees] are going to go up,” he notes.

Playing a Critical Role

AdHoc needed a partner and Dispatch was proving a tough sell. But there was one interested party in the form of Critical Role, the famous online D&D series.

One of the lead actors in Dispatch is played by Critical Role’s Laura Bailey. Bailey was sent animation and scripts, and this was seen by Bailey’s husband, Critical Role CEO Travis Willingham. Willingham was eager to get Critical Role into the video game space and was impressed by AdHoc’s work, so he approached it about making a Critical Role game.

During discussions, the developer suggested that Critical Role might want to help it finish Dispatch first. But the conversation didn’t become serious until The Game Awards in 2024, when the game was revealed to the world.

“We were at The Game Awards without a deal,” Choung says. “And then, because of the TGAs and the impact that it had on wishlists, the conversation with Critical Role became much more serious and accelerated.”

Herman adds: “Without that show, I don’t know that Dispatch would’ve made it. We could see the end of the runway not too far into the next year, and we needed that huge spike in interest to generate confidence in investors and others. It was huge.”

Critical Role came in with the funding, but it’s not a publisher. That meant AdHoc had full control over how to release and promote Dispatch.

“We ended in a place that was the best for the studio and the project financially and creatively,” Herman says. “We’d pachinkoed our way to the jackpot. It’s something that I hope other people hear, and that it provides them with a bit of hope if they’re in the middle of what feels like an existential crisis. Michael was the steady hand a lot of the time, as some of us were losing our heads and freaking out.”

AdHoc stuck with the episodic approach. It believed that was best for the experience and for generating conversation. However, it found in pre-release testing that players who got to episode four typically finished the whole game. So, it released two episodes a week in order to get people there quickly.

Ultimately, it all worked. But Herman found publishing a lot harder than he had anticipated.

“We are very glad we did it, but it was certainly a journey. We didn’t have anyone on our team who had ever published a game before. It was the naivete of… well, I was at Telltale for 10 years and they self-published everything, so it can’t be that hard. We were very humbled by that experience.

“There are a lot of upsides to being in control of that. I don’t know why we would ever go back to working with a publisher.”

He continues: “I wouldn’t cross it off completely, but it would have to make a lot of sense. We just announced we’re coming to Xbox. We now know how it works with these first party platforms. We have these relationships. We’ve done it before. Certainly, help is useful. And there are other pieces to publishing, like marketing. I was also the person building the store pages and hitting the button to set the game live. And there’s something that I really enjoyed about it… there’s an art to building a Steam page.”

Herman is keen to stress that AdHoc had support, whether that’s from agencies it hired, or publishers like Kepler and Supergiant that were eager to help.

“The industry is small in a lot of ways,” he explains. “You find out who the real ones are by surviving as long as we have. It’s one of the best things about the industry and things like GDC and other conferences, where people are just so willing to share and be helpful.”

Beyond the niche

Herman and Choung don’t see Dispatch as a fluke. They believe the genre always had this potential. The game was a reaction to the fact their friends and families weren’t interested in their previous titles. They liked similar movies and TV shows, so why not these games? So they listened to the feedback and created something new – a game that empathises character over plot, with high quality animation and a likeable cast. They made a game for a specific group, and that specific group turned out to be over four million strong.

Regular readers of The Game Business have heard this story before. Helldivers 2, Clair Obscur, Space Marine 2 and Arc Raiders are all examples of what happens when you take a niche genre, focus on the audience, and deliver a strong product. Being risk-averse in today’s industry isn’t going to get you very far.

As for AdHoc’s next move, there’s a Critical Role game to make, plus some form of follow-up to Dispatch. The company is now looking to hire people, including in the publishing side. But when it comes to making games, it’s not just about adding more people.

“We think that’s a creative problem, less a production problem,” Choung explains. “The tendency for game studios is to think like production companies and not like businesses. They’re much more concerned about what a potential output is versus what the outcomes are. We’re making creative games. We don’t want to just build a studio that can make things. We want to make things that actually connect with people. To do that, you have to scale creative leadership before scaling [anything else].”

Herman concludes: “You don’t green light a film without a director and writer attached, right?”

Disclaimer: The Game Awards is run by Geoff Keighley, who is also the co-founder of The Game Business.

‘The Father of PlayStation’ Ken Kutaragi will be doing an on-stage interview this October with The Game Business.

The interview is part of the UK industry conference Game Republic New Horizons, which takes place October 14 - 16 in Middlesbrough. The session will be filmed as a full episode of The Game Business for release after the event.

Kutaragi formed Sony Computer Entertainment in 1993 and acted as its group CEO and chairman until 2007 after the release of PlayStation 3.

“I am absolutely delighted to be coming to the UK to take part in the Game Republic New Horizons conference,” Kutaragi said. “I am looking forward to sharing my experience and lifetime of innovation and my insights on future opportunities with all the attendees.”

Game Republic MD Jamie Sefton added: "Bringing such a legend in the industry to the UK shows the ambition we have for this conference to be a major unmissable and unique international event in the games industry calendar."

Kutaragi is currently the CEO Representative Director of Ascent Robotics, and CEO and President of Cyber AI Entertainment.

Early Bird tickets for New Horizons are available now at £149 until the end of April. Details on tickets and discounted accommodation can be found at: grnewhorizons.gamerepublic.net

It’s Easter break/Spring break time. But that doesn’t prevent us from diving into the big stories of the week. Especially when those big stories are about major pricing shifts for both PlayStation and Nintendo.

Plus, there were those Epic cuts, a UK trade body shared alarming data, and Savvy prepares to spend big on mobile games… again.

Let’s take a look.

DRAM crisis deepens as PS5 price jumps $100

In Brief: Sony has significantly increased the price of PlayStation 5 globally. All models have increased by at least $100.

What You Need To Know:

• In the US, the PS5 will rise from $549.99 to $649.99. In Europe, it’s jumping from €549.99 to €649.99. In the UK, it’s gone from £479.99 to £569.99.

• In the US, the PS5 Digital Edition will rise from $499.99 to $599.99. In Europe, it’s also up from €499.99 to €599.99. And in the UK, it’s gone from £429.99 to £519.99.

• In the US, the PS5 Pro goes from $699.99 to $899.99. In Europe it’s $699.99 to $899.99. And in the UK, it’s gone from £699.99 to £789.99.

• The price hike has also hit Japan, with the digital model at ¥97,980, the standard model at ¥89,980 and the Pro edition at ¥137,980.

• In addition, the PlayStation Portal has increased in price from $199.99 to $249.99, £199.99 to £219.99 and €219.99 to €249.99.

• PlayStation said on its blog: “We know that price changes impact our community, and after careful evaluation, we found this was a necessary step to ensure we can continue delivering innovative, high-quality gaming experiences to players worldwide.”

• The Digital Edition PlayStation 5 console has seen its price jump by $200 since its release.

• The situation is caused by rising memory and storage costs. DRAM prices have reportedly increased by over 170% year-over-year.

• Leading game analyst Piers Harding-Rolls from Ampere Analysis told The Game Business: “It wouldn’t be a surprise if Microsoft and Nintendo followed suit in the not-too-distant future.
  
  “Aside from a direct impact on hardware companies, I think this will cause some general industry concern about what the broader impact will be on market activity. The console and the AAA PC gaming markets rely on hardware investment to bring in new active players and drive market momentum, so if this weakens it might soften demand for new games. These pressures come at an awkward time for Sony and Microsoft with Take-Two’s GTA 6 arriving at the end of 2026, as both companies will want to take full advantage of the positive impact of this system seller release. Likewise, it’s awkward for Nintendo as it won’t want to raise the price of the Switch 2 when it is trying to establish the new platform.”

• Elsewhere, the family console Nex Playground has increased the price of its machine from $249 to $299.

• Microsoft raised the prices of its Xbox consoles twice last year. A standard Xbox Series X now retails for $649.99, up $150 since launch. The Series S is $399.99, an increase of $100.

My Take:

Regular readers and listeners will know I’m generally an optimistic person. But the situation facing video game hardware gives me a knot in my stomach. It feels almost existential.

Read more

Every month, exclusively for paid subscribers, we dive into the key charts, statistics, facts and stories from the previous month in video games, including some exclusive data and analysis from us.

Until April 1, you can sign-up for a paid subscription at a 20% discount to celebrate one year of The Game Business.

February was dominated by Resident Evil Requiem, but outside of that it was a tough month with a fall in players and revenue across many major PC, console and mobile games. Let’s dive in.

The State of Games: February 2026

There were some clear bright spots during February. The subscription business saw a surge across the US, PUBG Mobile grew substantially, Helldivers 2 and Overwatch staged a comeback, and Resident Evil Requiem broke franchise records.

But as you’ll see, overall February was quite challenging across the business with declines for many of the usual players.

Fortnite, GTA, Battlefield and Arc Raiders suffer drops, as Resident Evil dominates

After four consecutive months of growth, Nexon’s Arc Raiders finally sees a drop in players, and it’s a big one, with numbers down 2.4 million over January. In fact, most of the typical big games dropped last month, while a certain Capcom horror game dominated the sales charts.

Here are the key details:

Read more

Listen now on Apple, Spotify or YouTube

In This Edition,
- Big cuts at Epic
- How is Switch 2 performing?
- VR discovery boost
- We celebrate one year of The Game Business!

Hello and welcome to our anniversary edition of The Game Business.

We have been around for an entire year, and to mark the occasion, we have Game File reporter Stephen Totilo on today’s episode of the Show. Stephen was our very first guest back in March 2025, and it’s great to have him back.

Today, Stephen and I discuss Nintendo’s current performance, Epic’s shock lay-offs, and the positive impact of Meta removing Horizon Worlds from the Quest Store.

You can watch or listen to the whole thing above. Or, of course, I have all the relevant stories and data from the Show in our articles below.

Enjoy!

What’s really happening with Nintendo Switch 2?

There are mixed messages surrounding how the Nintendo Switch 2 is performing.

We know it had a record-breaking console launch, which caused Nintendo to raise its projections. And there have been numerous hit games on the platform. Switch 2 exclusive Pokémon Pokopia arrived earlier this month and sold 2.2 million copies in under a week.

But then came our report earlier this year, which revealed that Switch 2 (outside of Japan), had a relatively soft Christmas. Nintendo confirmed this, revealing that international sales were “somewhat weaker than expected” in recent financial comments. And this week came Bloomberg’s report that Nintendo had reduced current Switch 2 production from six million to four million units.

So what’s the truth? In today’s edition of The Game Business, I’m going to dive into the numbers behind Switch 2.

Isn’t Nintendo Switch breaking records?

Yes. It was immediately the fastest selling games console in history when it launched in June last year, and continues to trend ahead of the original Nintendo Switch worldwide.

For the first nine months on sale in the US, Switch 2 is 45% up over Switch 1, and even 29% up over PS5 (Circana). Only the Game Boy Advance has sold faster than it. In the UK, Switch 2 sales are up more than 20% launch aligned compared with Switch 1 (Nielsen IQ).

In Japan, Switch 2 has shifted over 4.8 million units in just over nine months. By comparison, it took 17 months for Switch 1 to reach that same figure (Famitsu). The console has even sold half a million units in China (Niko Partners).

So why are people concerned?

After an explosive start, Nintendo Switch 2 sales are not quite hitting the heights they were at launch, at least in the West. Over November and December in the US, Switch 2 sales were about 30% down compared to how Switch 1 sold during its first Christmas on the market (TGB sources). That has continued into 2026. For the first two months of the year, Switch 2 sales are roughly 20% lower than what Switch 1 managed during January and February 2018. At this pace, Switch 2 will eventually fall behind the Switch 1.

What’s more, the Switch 1 vs Switch 2 comparisons aren’t entirely like-for-like. Switch 2 was released in June, so the first nine months of its life include the crucial Christmas sales window. Switch 1 was released in March, so the first nine months of its life doesn’t include December.

Is this a problem?

Not necessarily, because there are flaws in comparing the launch of Switch 2 to the Switch 1.

Switch 2 was well supplied from day one, which led to a record-breaking first few months on the market. By comparison, Switch 1 was not well supplied at launch. As a result, Switch 1 sales were more spread out across that first year as more stock came to retail, while Switch 2 sales were more front-loaded.

The launch line-up for Switch 2 is also noticeably weaker, certainly compared with the first Switch. During Christmas 2017, Nintendo launched the smash hit Super Mario Odyssey. There was no such comparable game for Switch 2’s first Christmas, and we’re still waiting on many of Nintendo’s biggest franchises to arrive on the new platform.

So why are investors anxious?

There are some significant macro-economic challenges facing Nintendo (and the entire console sector).

In a talk from June last year, Circana games boss Mat Piscatella told The Game Business that according to its survey data, 44% of consumers were cutting back on non-essential items (such as games) due to concerns around rising prices of essential items (like food and energy). 46% also said they were putting off big purchases due to concerns about the economy.

In addition, rapidly rising component prices has put significant pressure on the profitability of Switch 2. This creates a challenging situation where consumers are looking for value, and Nintendo is limited in what it can offer.

The competitive landscape has also increased for Nintendo. From smaller rivals like Nex Playground, to Netflix’s family strategy and the dominance of Roblox, there are players vying for Nintendo’s family audience. Meanwhile, PC-based gaming handhelds like the Steam Deck and ROG Ally are targeting some of Nintendo’s more hardcore portable players.

How come things are better in Japan?

Japan is Nintendo’s strongest territory. The company had developed a lower-price model for the market, and the games that have come to Switch 2, such as Pokémon and Kirby, are strong performers in Japan.

Ok, what about the games?

The picture here is muddled. Nintendo sold-in 37.93 million Switch 2 games during the console’s first seven months. By comparison, it sold 27.48 million Switch 1 games during its first seven months.

But the install bases are vastly different. Based on these numbers, the Switch 1’s launch attach rate was 3.7 games for every console sold, vs 2.2 games for Switch 2.

But it’s complicated. Unlike Switch 1, Switch 2 is fully backwards compatible. 84% of Switch 2 buyers (up until September 30, 2025) were also Switch 1 owners. This means that most early adopters already had a library of games to play, and some of them had been updated and improved for the new platform.

Also, between the launch of Switch 2 and the end of 2025, Nintendo sold between 90 and 100 million Switch 1 games, some of which will have been to Switch 2 players.

The data is inconclusive.

What about third-party games?

There is a myth that third-party games don’t sell well on Nintendo platforms. In reality, titles like Minecraft, LEGO, Hogwarts Legacy, Stardew Valley, Just Dance and Crash Bandicoot have sold significant numbers on Nintendo Switch.

Some more mature games sell well - Doom, The Witcher 3 and GTA all performed strongly on Switch – but the results are typically lower and less consistent.

Switch 2’s early third-party support has included Cyberpunk 2077, Star Wars Outlaws, Assassin’s Creed Shadows and Final Fantasy VII: Remake, which are games more commonly associated with PC, PlayStation and Xbox. And the early results are relatively low. Nevertheless, these are older titles, and it’s not unreasonable to suggest that many early Switch 2 customers already have access to these games on other devices. It comes down to expectations, and Ubisoft said Assassin’s Creed Shadows on Switch 2 beat its projections.

Resident Evil: Requiem is a more telling product, as it launched on Switch 2 simultaneously with other platforms. Looking at select European markets, we can see that roughly 5% of Requiem’s sales came on Nintendo Switch 2. It’s not a big figure, but 5% of a high selling product can still be significant and profitable.

Ultimately, people buy Nintendo consoles for Nintendo games. Therefore, the third-party titles that will perform best on Switch 2 will be ones that match that audience profile.

What do you think?

Nintendo has some real challenges, certainly in the short-term and particularly in the West. The macro-economic conditions are extremely tough and its release slate is currently lacking. Nintendo has only announced a selection of titles for 2026, and the biggest Switch 2 games on its calendar – Pokémon Winds and Waves – aren’t due until 2027.

Combined with high DRAM and storage costs, I can see why investors are spooked by Nintendo at this point in the story.

But Nintendo has a strong base for Switch 2 already, and the performance of Pokémon Pokopia shows that players will come out if the games are there. And more broadly, Nintendo IP remains extremely strong. The upcoming Super Mario Galaxy movie is conservatively estimated to deliver $160 million over its five-day opening weekend next week.

Nintendo also has huge opportunity in digital. A new Switch game can often see over 80% of its sales coming from physical retailers. Whereas, PlayStation, Xbox and PC sees the majority of its new game sales happen via digital stores. If Nintendo can accelerate its digital business, it would offset many of the margin challenges it’s facing on hardware. It could also lead to a far more lucrative generation for the company, even if Switch 2 doesn’t match the lifetime sales of Switch 1.

Nintendo is actively trying to drive its digital business. Just this week it announced that digital versions of its games will be sold at a lower price than physical versions in the US (a situation that was already the case in other markets, including Europe). Nintendo has reasons to be optimistic here, because the early sales of Pokémon Pokopia as a digital product (the physical game had sold out at retailers) is encouraging.

In conclusion, Nintendo has some tricky things to navigate. But to quote Take-Two CEO Strauss Zelnick from our interview last week: “You’re not going to be having a benefit dinner for Nintendo anytime soon”.

VR developers cheer the removal of Meta’s Horizon Worlds

VR developers are relieved to see Horizon Worlds removed from the Meta Store.

Meta’s VR game has become a contentious issue for third-party developers and publishers. The game’s various ‘Worlds’ would dominate Meta Store, which is the world’s biggest retailer of VR video games, making it harder for VR studios to get visibility on the platform.

“This is good news for discovery,” says VR veteran and consultant Cassia Curran. “It used to be the case that the Meta Store would highlight specific worlds from Horizon Worlds, taking up valuable storefront space and shunting out games and apps that were independent of the platform. Also, quite annoyingly for most users, the default library layout would have random worlds listed in with the users’ purchased games and apps without their consent. It felt like Meta was trying to brute force an audience and engagement, rather than focusing on making an awesome product.”

Andrew Eiche, the CEO of Owlchemy Labs, which is the developer of VR games such as Job Simulator and Dimensional Double Shift, added: “I am encouraged to see Meta’s focus on the commercial health of the store. Having the same goal between the platform and the studios is good for the long-term health of the ecosystem.”

It’s some good news for VR developers. However, Meta’s pivot away from VR is a longer term concern for studios. The Quest range have been the market leading VR devices, partly because Meta has been willing to subsize the hardware to try and deliver a strong install base. It’s expected the company will be less aggressive in this area moving forward.

Meanwhile…

• Epic Games is laying off more than 1,000 employees due a drop in Fortnite engagement. The firm said it needed to make “major cuts to keep the company funded.” CEO Tim Sweeney revealed that the job cuts, together with $500 million in cost savings across contracting, marketing and “closing some open roles” will put the company in a more stable place. On today’s edition of the Show, Game File reporter Stephen Totilo revealed that Epic had just over 5,000 employees before the cuts, which is roughly how many staff they had back in 2023 before making over 800 redundancies. Therefore, between making those cuts and 2026, Epic had regrown to the size it was.

• PlayStation has closed Dark Outlaw Games, the studio founded last year by former Call of Duty Zombies lead Jason Blundell. It’s the second time Sony has parted ways with Blundell, as he was working on a project with the company as part of Deviation Games, but it was cancelled in 2024.

• UK trade organization TIGA says the UK game development sector lost 1,537 jobs last year, which is a 4.5% drop. It is the first time since 2011 that the number has declined instead of grown. The trade body said that the number of new studios being formed fell 30% for the third year in a row. There are now 2,110 game studios in the UK, down from a peak of 2,175 in 2023. TIGA has called on the UK Government to offer stronger tax relief for studios.

• Crimson Desert from Pearl Abyss has sold three million copies. The game received mixed critical reviews, which caused the company’s share price to drop nearly 30%. But things have rebounded due to the initial strong sales.

• PlanetPlay has unveiled Battle for the Habitats, a major biodiversity campaign featuring video game developers, publishers and players. Launching on Earth Day (April 22) and running until World Environment Day, the campaign looks to raise $1 million for the Rainforest Alliance and Oceana.

• Ubisoft’s Red Storm Entertainment will cease making video games, with 105 jobs lost. The studio will remain open, working on the Snowdrop Engine and handling some other services, including customer relations. It’s part of Ubisoft’s goal to save €500 million between March 2023 and March 2028.

• The US video game market generated $4.6 billion in spending during February, up 1% from last year, according to Circana. Resident Evil: Requiem’s strong launch and a 27% boost in subscription services helped keep revenue on video game content flat compared to February 2025. Nintendo Switch 2 hardware drove 22% year-on-year revenue growth compared to last February, but it was the PlayStation 5 that once again led the hardware market in both units and revenue.

• CD Projekt posted strong financial results. Revenue reached $235.2 million, which is a 9% year-on-year increase, while profit rose 33.7% to $161.4 million. This was driven by Cyberpunk 2077, which saw revenue grow 12% year-over-year.

• Krafton must reinstate former Unknown Worlds CEO Edward Gill and extend the terms on which his team can secure a $250 million bonus related to the upcoming Subnautica 2. Gill, alongside the studio’s other leaders Charles Cleveland and Adam McGuire, fell out with Krafton (the studio’s owner) over the bonus. The three accused Krafton of trying to avoid paying it out by forcing a delay on the game. Krafton reacted by accusing the three leaders of threatening to handle the game’s publishing itself, without using Krafton’s internal publishing resources. This led to the termination of their employment. Now, the Delaware Chancery Court has ordered Gill to be reinstated as CEO. Subnautica 2 is currently the most wishlisted game on Steam with over four million wishlists.

That’s it for today! It is Spring/Easter break next week, so we have a slightly reduced schedule. But we still have some fun pieces for you to enjoy. Until then, thank you for reading.

Listen now on Apple, Spotify or YouTube

In This Edition,
Scopely co-CEO Javier Ferreira on…
- The Western mobile market
- Lessons from Niantic
- Google fee changes
- Its acquisition strategy
- ‘The sphere of incompetence’

Monopoly Go is a bit of a rarity.

It’s something Ilkka Paananen, CEO of mobile giant Supercell, observed in his recent blog.

He noted that just 22 mobile games grossed $1 billion or more since 2020. 20 of those games came from developers in China, Japan and South Korea, and just two were made in the West: Royal Match by Dream Games and Monopoly Go from Scopely.

Paananen was critical of the West’s mobile efforts. He wrote: “The fact is, we have not brought radical new gameplay innovation to the market.”

So, as a company behind one of those two Western breakout hits, I asked Scopely co-CEO Javier Ferreira if he shares Paananen’s views.

“If we were having this conversation six years ago, and we were thinking about the scale of the market we have today… both of us would’ve been saying this is an amazing outcome,” says Ferreira. “On top of that, it’s unquestionable that gaming and play has won. We have billions and billions of people playing these products every day.

“Having said that, the industry has changed. What is successful today are not the same things that were successful five years ago. The path to success is different. You have to be nimble and be very adaptable. Five or 10 years ago, you still had a lot of people coming in and discovering mobile games. That is no longer the case. Five or 10 years ago, you still had a lot of people trying to build a long-lasting relationship with some of these games. That is not the case today. All of these billions of gamers are playing these games with really high levels of engagement. About 80% of our revenue comes from people that have been playing our games for more than a year.”

Ferreira says that big mobile companies want games that can last years or decades, but to succeed at doing that they are “asking players to abandon their [existing] experiences.”

“And not just try a new thing - we’ve seen success in people trying new things - but to try and stay. And stay not for a week, or two months, but stay for years. You’ve got to make a gamer feel something very special to achieve that

“That’s maybe the internalization that still hasn’t happened across the industry. The reality is that there’s less of a need for new games. But exceptional games that make players feel [very special], can achieve levels of success that are unrivalled and bigger than anything that was happening a decade ago. Monopoly Go got to $6 billion faster than any mobile game in history. And we launched it in 2023 when a lot of people were saying that it’s not possible to launch new mobile games.”

We were speaking to Ferreira to mark Scopely’s 15 years in business. During our interview, we discussed what it’s learnt from its acquisition of Pokémon Go developer Niantic, the opening up of the app stores, PC and console games, future acquisitions, licensed IP and its obsession with getting things wrong,

You can hear the full interview above. And here are our highlights below.

‘We are never right’

Scopely is obsessed with learning.

“We are an ever-evolving organization,” Ferreira tells us. “Nothing is ever done. We have this idea of iterating to greatness, and underlying that is the belief we’re never right. We are always in the pursuit of greater levels of accuracy, which means: can we find better ideas than the ones we have?

“We are never right. The leadership of the company is very clear about that. We are very clear that nobody has been more wrong at Scopely than [co-CEO] Walter [Driver] and I have. That’s a fact. If we can normalize that, then we can focus a lot energy on the real work, which is learning and growing.”

Ferreira says success in video games means constant evolution.

“You don’t choose the conditions of success,” he says. “The market has certain characteristics, certain dynamics, and what you can choose is how you operate, and how you react to that marketplace. The opportunities are huge. There are still companies that are growing very meaningfully, and have found the success. It requires evolution and innovation at the company level.

“And at the individual level, too. Who we were as game leaders, as game makers, five years ago, is not going to serve us for who we need to be today. And most likely who we are today, is not going to serve us in terms of who we need to be three or four years.”

I asked how do you facilitate that learning when you’ve got 3,000 employees split across offices in entirely different countries?

“These things need to happen organically at companies,” he explains. “I don’t think in a talent industry you can govern from the top. So, we try to distribute decision making and behaviors. And then we elevate and promote the people that best follow or live our values.”

Niantic is teaching Scopely about community

By acquiring Niantic, Scopely added Pokémon Go to its roster of titles. But the acquisition was about more than just one big revenue generator.

“Niantic has been truly inspiring,” Ferreira says. “The game had an amazing 2025. It’s the ninth year that it’s been live, and it’s been the biggest year in the history of the game. The team has inspired us with two things. First, the fundamental deep commitment to the community. When you go to these Pokémon Go Fest events, the work that the team puts into these, and the bonding that’s created with the player base, is just extraordinary. It’s a good reminder of why we do what we do.

“The other thing is that they are very mission-oriented. They want to make the real world more fun and interesting through play. That’s a mission that’s exciting. To stay true to that mission, you’ve got to pay a price. It restricts the types of things that you can do. The belief in that mission and the discipline around it has energized the whole company.”

It’s eyeing up PC and console

Scopely is known for mobile, but it’s previously expressed an interest in the PC and console space. When we asked Ferreira about that, he said: “If there’s a gamer, we want to be there.”

But the PC and console market is very different to mobile. In this very newsletter, analysts such as Matthew Ball, Nicholas Lovell and Owen Mahoney have discussed how there are ‘multiple game industries’, with mobile having vastly different characteristics to PC and console.

But Ferreira, slightly, disagrees.

“They’re the same industry,” he says. “I’ve seen Matthew Ball’s presentation and it’s super insightful. And maybe the drivers of success are different, and the capabilities required are different, but I still think that the fundamental product, or experience, that you are delivering is the same. It’s just different types of players. The players of Monopoly are different than from Pokémon players that are different from Star Trek players, that are different from Call of Duty players, that are different from FIFA players.

“I go back to players. They are our bosses. We’ll try to live up to their expectations wherever they are.”

Ultimately, Ferreira relishes the idea of doing something he doesn’t know how to do.

“I enjoy it the most when we are operating in our sphere of incompetence, when we hit against things that we don’t know how to do,” he says. “That’s how we’ve got better. That’s how we’ve grown. Believe me, there are a number of projects that we are working on where we are hitting our heads against that wall.

“The opportunity to go to new platforms, with new gameplay and genres, it’s exciting. Hopefully we can talk about some of those in the future.”

It is not obsessed with licensed IP

Scopely’s biggest games are mostly based on existing brands, such as Monopoly, Pokémon, Star Trek, WWE and Marvel.

But despite how it looks, Scopely isn’t all about external IP.

“We are trying to build people’s favorite things,” Ferreira says. “For some people, Pokémon is their favorite thing, Marvel is their favorite thing.

“So, we’re excited about partnering with such IPs. I don’t think we are interested in IP as a universe. We are interested in the fandom and communities that exist around those IPs. And those communities can be built around original IP and third party IP. It’s not the IP that governs our strategy. It’s making sure that we have, and are building, deep communities.”

It’s not fussed by Google’s fee changes

Google has lowered its store fees following an agreement with Epic. The change should prove a boost to mobile developers of all sizes. But when I asked Ferreira about it, he almost shrugged.

“I could say the lower the fees the better. But it’s not a big driver of how we think about the business today or in the future. There are bigger themes that a success depends on than those.”

What about the idea that a more open mobile ecosystem enables a more direct relationship with players?

“I’ve never felt that neither Google or Apple have restricted our ability to build direct relationships with players.”

It wants to acquire businesses that make it better

“Obviously, with acquisitions you’re adding revenue or audience,” Ferreira says. “And, of course, those things matter. But we are always on the lookout for how these acquisitions make the company better. How do they enhance the capabilities that we have? How do they accelerate the journey that we’re on? In the case of Niantic, we were valuing the communities that they had built. They are the most engaged and largest community in mobile gaming, bar none. And we thought that was an incredible, unique asset which could make the company better.

“In the case of [recent investment] Loom Games, [its puzzle game] Pixel Flow is amazing with some phenomenal long-term retention and KPIs. But what I’m really excited about is their prototyping culture. Its way of making game is so different from the way that we’ve been making games.”

He concludes: “We believe that you build a stronger, more resilient and more strategically powerful company if you can bring in people and teams that can accelerate what you’re doing and enhance the DNA of the company.”

That’s it for today. We’ll be back tomorrow with our market report (paid subscribers only), and on Thursday with our latest news and analysis show. Until then, thank you for reading.

Welcome to our anniversary week here at The Game Business. We’re officially one! And we wouldn’t have made it this far without you. So thank you!

Last week’s discourse was dominated by Nvidia’s DLSS 5 reveal. But for me, the biggest (and saddest) story was the (sort-of) closure of the iconic Red Storm Entertainment.

Meanwhile, Krafton loses a key court case, CD Projekt posts strong results, markets react to the critical reception to Pearl Abyss’ Crimson Desert, and a whole lot more.

Let’s go.

Ubisoft ends development at the iconic Red Storm Entertainment

In Brief: Ubisoft’s Red Storm Entertainment will cease making video games, with 105 jobs lost. The studio will remain open, working on the Snowdrop Engine and handling some other services, including customer relations.

What You Need To Know:

• Red Storm Entertainment was initially an independent studio formed in 1996 to develop games based on Tom Clancy stories. It is named after Tom Clancy’s Red Storm Rising novel.

• The studio launched the Rainbow Six and Ghost Recon series.

• It had been working on a spin-off game in the Tom Clancy’s The Division series, called Heartland. It was cancelled in 2024. Before that, it was developing a VR game in the Tom Clancy Splinter Cell series. That was cancelled in 2022.

• Ubisoft is making numerous cuts in a bid to reduce its fixed costs by €500 million between March 2023 and March 2028.

My Take:

Ubisoft needs to change. It needs to be leaner. It needs to focus. That’s why it’s cutting studios and projects, and it’s why its building these ‘creative houses’.

But these ceaseless stories of studio closures and redundancies is putting a cloud over the business, and everyone working within it.

In January this year, Ubisoft closed its Stockholm and Halifax studios. A few weeks later, it announced plans to cut 200 jobs from its Paris division. There were also cuts at Ubisoft Abu Dhabi, RedLynx and Massive Entertainment. In February, it cut 40 jobs at Far Cry 6 and Splinter Cell developer Ubisoft Toronto. This month, it’s Red Storm.

Head back into 2025, and we had the closure of Ubisoft Leamington Spa, plus office closures and job reductions at offices in San Francisco, Osaka and Sydney. In fact, over 2025, Ubisoft reduced its headcount by 1,500 people.

Some Ubisoft employees are in open rebellion, as we saw with the strikes that took place last month. But everyone within the organization is living under a cloud, fearing every new email that comes in from HR. The term ‘death by a thousand cuts’ is a common phrase within the walls of Ubisoft’s offices.

Read more

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In This Edition
- What PEGI’s new rules mean
- US ratings board reacts
- Pokemon’s higher age rating
- What about live service games?

Hello! Welcome back to The Game Business.

This week, we dive into the big conversation around the new European age rating rules. If you missed it, video games that feature loot boxes, and mechanics that reward gamers for playing regularly, now face having a higher age rating. It comes ahead of potential regulation against the video game industry from Governments trying to protect children online.

It’s a huge topic and we have multiple stories for you this week, including the views of the US age ratings board ESRB, plus an interview with Dirk Bosmans, the director general of the European ratings body PEGI, and Ian Rice, the director general of the Games Rating Authority.

You can watch or listen to the whole thing above (plus, my views on the Nvidia DLSS 5 controversy), or read the key quotes and stories below.

Enjoy!

“Age assurance is going to be part of the future for games”

The video game industry hopes new European age rating rules can convince lawmakers not to crack down too hard on video games.

The industry is facing regulation worldwide in a bid to better protect children online. The EU is looking to tackle ‘dark patterns’ in games, including loot boxes and addictive design, as part of its Digital Fairness Act. This could result in new legislation, such as game companies having to implement age verification, or even prevent young people from accessing games outright.

To get ahead of this, the Pan-European Game Information (PEGI) has introduced new age rating rules, which will mean games with loot boxes and ‘play-by-appointment’ mechanics will now be subjected to higher ratings. The new rules are:

• Games with paid random items (loot boxes) will be rated PEGI 16

• Social casino games will be rated PEGI 18.

• Games with time- or quantity-limited offers, such as paid battle passes, will be rated PEGI 12. This can be lowered to PEGI 7 if in-game options that can turn off spending are used by default.

• Games that use NFTs that can be traded will be rated PEGI 18.

• Any game that offers incentives to revisit or ‘play-by-appointment’, such as daily quests, will be rated PEGI 7.

• Games that include paid battle passes where rewards become unavailable if certain objectives are not met will be rated PEGI 12.

• Games where a player’s acquired item or status can be lost if they do not return to the game will also be rated PEGI 12.

• Games with unrestricted communication, and with no reporting system, will be rated PEGI 18.

Several major publishers have told The Game Business that they “broadly welcome” the new ratings, as it highlights the industry’s ability to self-regulate.

“Is this going to achieve all our goals? We don’t know, but we think that this is what we need to do if we want to be able to move forward with a proportionate solution to the concerns that are raised above video games,” said Dirk Bosmans, director general of PEGI.

Ian Rice, director general of the Games Rating Authority, added: “PEGI’s always come from a perspective of the industry can do the right thing. That’s effectively why PEGI started in the first place. It’s about making sure that we remain current and in-line with the parental and political concerns of today.”

The video game industry could face having to introduce age verification/assurance, and there’s even the possibility of a ban on young people playing games. But PEGI cautions legislators about these solutions.

“It’s part of a debate that is still not fully mature yet,” Bosmans said. “In some territories, on some topics, there is an eagerness. But I would caution against moving too quickly, because it may not be the silver bullet that some people think it is.

“A ban is not going to be effective and age verification isn’t going amount to nothing if the parents don’t buy into it. It’s often portrayed that we’re pushing the responsibility onto the parents… But I’m simply saying that if you think you can do this without the parents, you’re very, very mistaken.

“[Concepts like] age verification and bans do not take into account that parents have to play an active role. Because if you keep kids away from things for many years, and you don’t stimulate a conversation with parents, what are you going to end up with when they’re suddenly old enough? They’re not assertive, they’re not informed. So, let’s start this slowly and early.”

Bosmans does expect age verification to be “part of the future”, but there is a lot to consider.

“There are essentially 17 different potential scenarios. Are you talking verification for purchase and download? Are you talking each verification for daily access? Are we talking age verification between 18-plus and minors? Or PEGI 16 and PEGI 12? Or PEGI 7 and PEGI 3? We haven’t even got to that level of the conversation yet

“I’m happy that there are some test cases happening not in Europe and not on video games that might show the difficulties with this. Is age assurance is going to be part of the future? Yes, but I would be very cautious about embracing all of it immediately. There are still enough questions about privacy and data protection, which children have a right to as well, to be solved. Technology isn’t going to be the end-all solution. But it will play a role.”

PEGI will look at older online games

The new PEGI rules apply to games released from June onwards. This has received some criticism as it discounts legacy online games that are played regularly today, such as Genshin Impact and Rocket League.

But PEGI insists that these games will be looked at.

“We did not include a lot of detail about legacy products, because that’s something we want to figure out properly,” he told us. “It is actually a lot more complicated than you might think. When we said that only games submitted to us from June onwards will be classified, we meant only from June, not today or next week, which probably caused some confusion. We will be looking at some legacy products.

“Ask any age rating board in the world and they’ll tell you that with physical legacy products, don’t touch them. Because you’re simply going to add confusion by distributing a second batch of products with a different rating, and people won’t know which was the original, which is the new rating… that’s not going to help.”

Bosmans says that “leaving legacy live service games entirely untouched would not work out well in the long term.” However, it might not be possible to apply all the new rules to older titles.

“We need to give ourselves the time to find the proper parameters, because we introduced four new categories… can we do all of them? There are lots of games out there and a lot of them are constantly being updated. We cannot continuously check our back catalogue. But we’ve been tracking the presence of in-game purchases and paid random items for the last seven years, that gives us a very interesting database.

“That’s different for the ‘play-by-appointment’ category. We have no information about which games from the past have certain mechanics like that. It would be, in terms of resources, incredibly difficult to go back and [look at that]. So, we’ll probably have to make some really smart choices and then develop a plan of attack to address some legacy products under the new criteria.”

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US age ratings body will not adopt PEGI’s rules: “It could be confusing”

The US ratings agency ESRB says PEGI’s new rules “could be confusing” for people.

The Entertainment Software Rating Board is not planning to change its system to factor in loot boxes or similar mechanics.

“ESRB provides upfront notice to parents about interactive features by assigning Interactive Elements, including ‘Users Interact’, ‘In-Game Purchases’, and ‘In-Game Purchases (Includes Random Items)’ as part of its three-part rating system,” an ESRB spokesperson told The Game Business.

“ESRB’s age and content rating are based on the content of a game and the context in which it is presented to the player. ESRB’s research indicates that parents want upfront notice about features like online communications and the ability to spend real money on in-game purchases, but that it could be confusing if non-content related features influence rating category assignments. As such, there are currently no plans for ESRB to allow any factors outside of the content and context of a game to influence the age rating assignment.”

Games Rating Authority’s Ian Rice says that ESRB’s position is a “perspective that’s been held by ratings authorities for a long time.”

He said: “We’ve got to the point where we need to be more aware of what parental concerns look like now versus how they did 10 or 15 years ago.

“When it comes to classifications, I don’t think you can totally not factor in the context around games anymore. Obviously, we were looking to see what was happening elsewhere in the world. Germany developed a very similar approach recently. We were keeping a close eye on that. It was working out. We drew a lot of inspiration from there. This is eventually the direction that most regulators will move in.”

Bosmans added: “We’re conscious of the concerns that ESRB voices. If we add this, are parents losing information? You do want to inform them both about the content, and the context, of video games. But by integrating them both into an age rating, you have to be mindful that you may not be able to give all the levels of detail that you gave beforehand. This is a difficult exercise. But as Ian points out, the context of Germany is what inspired PEGI to do this. I totally appreciate that ESRB can take a different position.”

Pokémon Pokopia would have had a higher rating under new PEGI system

The headlines might be about loot boxes, but one of PEGI’s more significant changes is around ‘play-by-appointment’. This refers to mechanics that encourage players to return to a game.

The hit new Pokémon title Pokopia is rated PEGI 3. But it does feature rewards and tasks designed to encourage users to come back on a daily basis. Under PEGI’s new system (which begins in June), Pokopia would have been rated a PEGI 7.

Rice told us: “The play-by-appointment categories are around this idea of… is there something within that game, a built-in mechanic, that’s bringing the child back to the game when they wouldn’t necessarily have done that organically? So, there’s a particular thing, an event, a reward, that’s pulling them back in. And it’s not them going: ‘I really fancy playing the game today.’ That’s where we are pushing the rating slightly higher. It’s only going to go to a PEGI 7.”

Games adopt different approaches here. A title like Animal Crossing encourages daily play sessions, but these sessions are typically much shorter than an MMORPG.

“If we were going to bake in all of those degrees of separation into the criteria, I’m just imagining what the meeting would be. How long is acceptable to pull them back into the game for? And then there would be a two-hour conversation about whether it should be one or two hours. You just have to go with the broad idea of what you want to get to. It will have the correct descriptor. It’ll get a PEGI 7. And hopefully that will interest the parents into finding out why, because you can always go to our website and we’ll explain why.”

Bosmans added: “It was also pointed out in other committee conversations that this is stuff that a lot of people enjoy. It makes the game engaging, like a cliffhanger in a Netflix series. Which is where the compromise was found to not make it land in a very high age category. The primary purpose here was to inform parents that with that game you might have some uncomfortable conversations [with children].”

Meanwhile…

• Nvidia has showcased DLSS 5, which it called an ‘AI-powered breakthrough in visual fidelity’. The firm showcased games including Starfield and Resident Evil Requiem using the technology, and it’s been backed by Bethesda, Capcom, NetEase, Tencent, Ubisoft Warner Bros and more. The reveal was heavily criticised because the tech appears to alter the face of the character models. Nvidia boss Jensen Huang says that online critics are “completely wrong”. He told Tom’s Hardware: “DLSS fuses controllability of geometry and textures and everything about the game with generative AI”. He said it’s not generative AI, it’s “content-control generative AI.”

• Ubisoft has appointed Tencent and 2K veteran Julien Bares as general manager of its newly-formed Creative Houses 3 and 5. Bares was previously the VP of Tencent Games, and has held roles at 2K China, Ubisoft and more. Creative House 3 looks after live games such as The Crew and For Honor, whereas Creative House 5 covers casual games like Uno and Just Dance. Meanwhile, Thomas Andrén has been named the general manager of Ubisoft’s Creative Network.

• Crystal Dynamics has announced more job cuts affecting 20 employees in its development and central operations departments. Its two upcoming Tomb Raider games are unaffected.

• IOI Partners, the publishing arm of IO Interactive, and Build a Rocket Boy have ended its publishing agreement for MindsEye. Build a Rocket Boy will now take on sole publishing responsibilities for the game. It means the planned Hitman and MindsEye cross-over will no-longer be happening.

• Sci-fi RPG Starfield is coming to PS5 on April 7. The Bethesda game was released on Xbox and PC in September 2023.

• Resident Evil: Requiem is now on six million sales, which means it is still the fastest selling Resident Evil in history.

That’s it for today. Join us next week for more big stories, news, interviews and analysis. Until then, thank you for reading.

At the end of January, Google launched Project Genie.

The AI tool allows people to turn text and image prompts into 3D virtual worlds. Video game investors got worried, and share prices for numerous game companies took a tumble. That included the share price of GTA owner Take-Two.

I briefly spoke to Take-Two CEO Strauss Zelnick about it last month, where he insisted the new technology was a good thing for companies such as his. Today, I had the chance to dive a little deeper on his views around AI, and the impact it will (and won’t) have on the future of video games.

“The history of our industry is that we’ve always used technology to create great entertainment,” he tells us on today’s episode of The Game Business Show. “So, an advance in technology that allows us to do things better and quicker is great for us.

“I was kind-of stunned by the market’s reaction, because its reaction was somehow seeing it as a threat to what we do, when it’s quite obvious that creation tools are beneficial for our industry. I think the bear case for big entertainment companies is somehow that AI tools will mean everyone can create hits, but that doesn’t stand to reason. These tools may help you create assets, but that won’t help you create hits. There are loads of assets out there now. It doesn’t matter if you push a button to create an asset, or it takes you six weeks, at the end of the day, you have an asset. And thousands of mobile games are launched every year, and there are only a handful of hits.

“Equally, you can create assets that might look like a big release, that might look like NBA 2K or EA Sports FC. But creating a hit of that magnitude is a completely different animal and does require human engagement and creativity.”

Zelnick says that technology can help the company create “the best entertainment on earth”, but it’s not something technology can do on its own.

“Could you use AI tools more quickly to storyboard? Or to help you tease out plot points? Or tease out alternatives? Sure. Because these tools are based on massive data sets that are searchable and translatable into natural language. And that’s just more effective than the tools we’ve had before, like doing an internet search.

“But ultimately, it’s the same thing. It all depends on your expectations. No one ever added value with a PowerPoint presentation. Nonetheless, lots of them are made all the time. If you could reduce the amount of time you spend on a PowerPoint presentation and still have a good PowerPoint presentation… Hallelujah, that’s phenomenal. But no one’s saying: ‘that’s great. Chris, we’re going to give you a big promotion because of the amazing PowerPoint you did for the internal committee’. That’s not what we get paid for. What we get paid for is making the best entertainment on earth and that requires all kinds of things that technology cannot, and will never, do on its own.”

I suggested that tools like Project Genie might level the playing field for those looking to create games like GTA.

“Not even the littlest bit,” Zelnick insists. “There’s already plenty of technology out there that allow people to create video games, and as a result, thousands of video games are created every year, and yet the hits all cluster among the large entertainment companies, almost entirely, and now and then, an indie, which is generally speaking well-funded and pretty robust in and of itself.

“The notion that somehow new tools would allow an individual to push a button and generate a hit and bring it to many millions of consumers around the world, it’s a laughable notion. It’s just never been the case with entertainment. Right now [in music] there are programs that allow you to put out a prompt and get a professionally recorded song spit back out at you. It sounds like a song, but I defy you to listen to it more than once. It’s great to send as a greeting card to your partner on their birthday, but that’s about it.”

Where AI might prove impactful is the growing creator economy in video games, where people are making games on platforms such as Roblox.

“But that creator economy stands alongside the professional entertainment economy,” Zelnick says. “It doesn’t supplant it. It doesn’t replace it. And the history of the entertainment businesses as new technologies come along that enable new activities, they stand alongside the pre-existing businesses.

“I used to give, as an example, that the only entertainment business that was ever wiped out by a new technology in the history of electronic entertainment, which is since 1895, and I’m a student of that business, was vaudeville. But now I could argue that vaudeville hasn’t exactly been wiped out. We’re in the golden age of live entertainment. My son’s a comedian. I just went to see him perform in front of thousands of people in Boston on Saturday night. Like, how is that different from vaudeville? There are far, far more people attending today than in the 1920s. So, every entertainment business that was supposed to be destroyed by new technology hasn’t been.”

Zelnick describes himself as an optimist when it comes to the impact of technology.

“I just read an article that took the position that because of digital technology, people are dumber today than they were 10 years ago. I don’t think it’s true at all. When I was a little kid, calculators came along and parents were all up in arms that now schools would not teach kids math because they had access to calculators. Well, people are learning math today, even though there are calculators.”

He adds: “Technology is almost always a positive. Look, there are detriments as well. We’ve greatly benefited from nuclear technology in so many ways, and we’ve also had horrific uses of nuclear technology in the second World War. Thank God, not since then. Knock wood.”

I quipped I sometimes think the internet might have been a mistake.

“You can moan about the effects of social media, but media’s been around for a long time. Our great grandparents moaned about jazz music. And then with parents, or grandparents in my case, it was rock and roll music. And then it was hip hop music. But here we are. We’re all fine. We survived.”

Take-Two predicts 75 - 80% of its revenue to be outside of the US by 2036

Take-Two has often talked about growing outside of the US, and the opportunities of developing markets like India and Southeast Asia.

But today, it remains highly reliant on the US, Western Europe and certain parts of Asia for the bulk of its revenue. So, I asked CEO Strauss Zelnick what the company’s plans are for growing outside of its home territory.

“There’s this massive population that loves interactive entertainment that we’re not really serving,” he answers. “For example, India and Africa. I would argue we underserved the Middle East. We certainly underserved much of Asia and Latin America. We need to change that.

“One of the ways we have to do it is localize, which requires us to invest. And the other thing that we have to do is create distribution partnerships, largely for mobile. We also have to support streaming services that make sense. Finally, we have to be willing to use our geo pricing tool, and take the risks that someone might use a VPN to circumvent our geo pricing, which is a risk we will take in limited circumstances.

“If you look at our numbers now, we run about 65/35 in favor of the US in terms of our revenue. It’s certainly not true of population, with the US having a population of 330 million people. So, as the world opens up technologically… on the console side, that means going more to PC, which is already becoming a much greater share of so-called console releases. On the mobile side, it means having technology that allows us to address less technologically advanced devices. As those things occur, which they will, and as the distribution models open up either for regulatory or commercial reasons, or both, we have the opportunity to serve the rest of the world, and those numbers should really change. I would guess in 10 years, if we do things right, the US is 20% to 25% of our business and the rest is outside the US. And obviously the scale of our business will grow materially.”

‘Older players are not ageing out of games’

One topic I was eager to explore with Take-Two is the age of its audience.

The company’s IPs date back decades. If you were 17 when the last BioShock of Grand Theft Auto was released, you’re 30 today. And that age group faces altogether different pressures on their time compared to a teenager.

“We tend to think around here in terms of making the greatest entertainment on Earth. And in order to do that, we engage with the most creative people on Earth, and find a way to encourage them to work within our system,” Zelnick says. “And then when they do work within our system, we give them unlimited resources and insist that they follow their passion. That’s our recipe for success.

“We don’t sit around and try to game it the way like Pillsbury does… who’s our consumer? ‘Why, it’s Betty. Betty is 52 and she lives in Milwaukee and she has blonde hair and she makes a cake every Thursday night’…. No, we don’t do that. We hire the most creative people. Tell them that all we want them to do is pursue their passions. We’re going have a really rational environment. We’re all going to be kind. We’re going to work as a team. We’re going to seek excellence. We’re going to get out of your way. And you know what happens? More often than not, everyone shows up.”

Zelnick doesn’t believe players are ‘ageing out’ of games.

“It’s not happening,” he continues. “We stay engaged with the kind of entertainment we fell in love with at the age of 17. If I say, ‘You have an hour and all you’re going to do is listen to music.’ You will listen to the music you listened to at 17. If you fell in love with video games at 17 and you’re 40, guess what? You still do play video games. That’s why the cohort is continuing to grow as we age. That’s why we have industry tailwinds. I know Matthew Ball doesn’t really believe that, but our experience here at Take-Two is we are benefiting from industry tailwinds.

“Now, we only benefit if we make something great, of course.”

Take-Two: ‘It’d be unfair to put in-game ads in full price games’

Last month we spoke to game analyst Matthew Ball about in-game advertising on PC and console. Advertising is a major monetization model in mobile, but it hasn’t been explored much on other platforms.

Ball suggested that sports games might be a lucrative space to explore advertising in pause menus or loading screens. He even pointed to Take-Two’s own statistic around the fact 2.5 billion games of NBA 2K are played every year.

But it’s not something Take-Two is interested in, at least not for premium titles.

“For free-to-play titles, yes,” he says. “For titles for which you’ve paid 70 or 80 bucks? No. We have some limited advertising inside games like NBA 2K because it fits with the vernacular. You want to see advertising in a stadium, because you would if you were there in real life. But that’s not a big economic contributor.

“It’s difficult for me to believe that we would want to have interstitial advertising in a game that someone paid 70 or 80 bucks for. It would seem unfair.”

Zelnick’s CEO advice: “Hit games cure all ills”

Zelnick has a new peer in the form of Xbox CEO Asha Sharma.

Her appointment sparked a conversation around the role of a CEO. Sharma doesn’t come from games and doesn’t really play them. Zelnick also didn’t start in games, nor does he consider himself a gamer. So, I asked what he felt were the key things a games CEO should be focused on.

“I don’t think the newly appointed head of Xbox needs any advice from me,” Zelnick says. “She’s a highly accomplished executive who’s done just great without ever having met me. I’m going to bet on her continuing to do great. Moreover, I have to focus on myself doing better, before I talk about other CEOs.”

He continues: “At the end of the day, what drives success in our business is making the best entertainment. The rest does tend to take care of itself.

“When I first became President of Fox, I was just responsible for the business side. My boss was the chairman, Joe Roth, and he was responsible for the creative side. If I did my job well running the business, and Joe did his job poorly running the creative, we would fail. If he did his job well, and I did my job poorly, we would succeed. And if we both did our jobs well, we would succeed mightily. And we did, thankfully.

“But the truth is that hits cure all ills. In the absence of making hits, you won’t have a successful entertainment business. That’s the thing to focus on. At Take-Two, we try to do all of the above. We try to run an amazing creative enterprise, and we try to run a highly rational, highly effective business enterprise. Sometimes we get it wrong, but that’s what we try to do.”

That’s it for today’s edition of The Game Business. Join us back on Thursday where we dive into some big stories, including the changes to the European age ratings. Thank you for reading.

We’re fresh off the plane from San Francisco after another packed GDC, which was headlined by AI, falling attendee numbers and a certain new Xbox console.

But the biggest story of the week? I’d argue it was the changes to the PEGI age rating system.

Let’s take a look at the week that was, shall we?

GDC 2026 attendance drops 33% year-on-year

In Brief: The newly branded GDC: Festival of Gaming attracted 20,000 attendees, a drop on the 30,000 it achieved last year. GDC will return to San Francisco between March 1 and March 5, 2027.

What You Need To Know:

• This year, GDC overhauled its content to attract a broader audience. It also introduced a simpler pricing structure, which brought down the overall GDC price, but removed the entry-level ticket option.

• GDC organizers said there were attendees from over 85 countries this year.

• There was a number of last-minute talk and attendee cancellations due to the US war with Iran.

My Take:

Whenever I launch a new event, the goal of year one is to simply ‘get away with it’.

Read more

Listen now on Apple, Spotify or YouTube

In This Edition
- ID@Xbox talk Project Helix and ‘the return of Xbox’
- Whatever happened to Moorcroft?
- Newzoo’s new market report
- And much, much more

Hello from sunny San Francisco,

I’ve been travelling the hotels and halls of the Game Developer’s Con… sorry, the GDC: Festival of Gaming, to learn what the future has in store for our beloved industry (it’s all AI, apparently).

It’s clearly a quieter show, and there isn’t nearly as much news, but I’ve still found it useful. And I have plenty of things for you. Including an interview with Xbox’s Guy Richards about indies, and how they relate to Project Helix and the ‘return of Xbox’.

I also had a great chat with Ben Porter of Newzoo about its latest PC and console report.

You can listen to all of this in today’s edition of The Game Business Show, which is available above. Or, if you’re too busy for that, I’ve distilled as much as I can into text form below.

Enjoy!

‘Indies are crucial to the return of Xbox’

Independent games are the “heart and soul” of Xbox’s new business strategy, the firm says.

Speaking to The Game Business, global director at ID@Xbox Guy Richards talked about the role independent teams will play in the upcoming Project Helix console, and Xbox’s wider mission to support gamers across platforms.

“In [Xbox CEO] Asha’s opening statement to the company, and the vision she has laid out, she talked about bringing great games to the platform,” Richards said. “Whether you’re looking at the volume of games, or the cultural or unique perspectives that developers are [bringing] to the platform, ID@Xbox is crucial to that.”

He continues: “It’s the heart and soul of what Xbox does. I look at the vision, I look at great games, and for me that’s all about the content, the variety of it, those big hits and making sure they come to Xbox.”

I asked Richards why developers should work with Xbox specifically, when they could focus their efforts on Steam and potentially achieve similar results.

“We’re working towards a future where you will be able to build once and ship everywhere,” he answered. “By making it easier, we will see more games come to Xbox quicker. If you’re a developer, putting your game out across as many different store fronts and platforms increases your opportunities for sales. We are differentiating and making sure it is as easy as possible for players to carry on playing wherever they’re playing [with Xbox Play Anywere]. Xbox is a great home for developers. We have a really engaged, high spending audience. It’s a great place to bring and sell games.”

Richards referenced Expedition 33, Hollow Knight: Silksong and Ready or Not, which are three hit independent games that Xbox partnered with last year. But, he stressed, it’s not just about the big success stories.

“Making $100,000, or $200,000, for a small team can be just as impactful as making $5 million or $50 million for a bigger team. So, when we start to look at those thresholds, say $100k for example, there are as many developers as ever making that amount of money on Xbox. That’s encouraging. And through different promotions and different tactics and changing our discoverability on new releases, we are always looking at ways to push those titles upwards in the rankings.”

Richards also discussed Xbox’s efforts to find games in new territories to help broaden the appeal of the platform. The firm hosted an event in India last month, and heard pitches and provided feedback to developers. It also supported the Xbox Game Camp project, where the company engages with future talent in markets such as Africa, Ukraine and Belgium.

Of course, some of these territories are not big console markets, which is why the firm continues to invest heavily in cloud streaming.

“I’m an existing console and Xbox gamer. For me, things like playing on handheld or playing on cloud are ways to extend and offer me some slightly different places to play where I haven’t been able to before,” Richards said.

“Whereas, we’re seeing in other markets that maybe cloud is actually the only way that people are engaging with Xbox, and that’s really encouraging. That’s through those partnerships we have with Samsung, LG, Hisense… smart TVs. That means in places like Japan, Brazil, India, you don’t need the hardware to become an Xbox customer.”

What happened to Project Moorcroft?

In 2022, Xbox revealed Project Moorcroft, where it would pay developers to create demos for upcoming games and bring them to the Game Pass subscription service.

Microsoft believed it could be an alternative to E3 or PAX, and would help developers get feedback and build excitement for its titles without the cost of exhibiting at shows.

It was supposed to be rolled out that year. But it never materialized. So what happened?

“It was a program where we were experimenting with some ideas for how we can support demos on Xbox,” said ID@Xbox global director Guy Richards.

“We have actually been doing a lot of stuff that is slightly different with demos recently. We’ve been doing our own ID@Xbox demo festivals on the store, which is a really great opportunity to get games out early for players to try. Especially if you’ve got a product page up, and you can start collecting wishlists on Xbox.

“There are some really nice tips and tricks to make sure that somebody who tries their games on Xbox can easily wishlist them. They get notifications when the game launches, or is discounted. Demos is an area we’ve been focusing on, but in a slightly different direction to what Moorcroft was.”

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Newzoo reveals growth in $30 to $50 video games

Data specialist Newzoo revealed its 2026 PC and Console Gaming Report today, which goes into huge depth on the changing player habits across PC, PlayStation and Xbox in Western markets.

We had a chat with Newzoo’s Ben Porter on today’s episode of The Game Business Show (above) about the report, and it’s well worth a listen.

And here are some of the key facts and insights from the report:

• PC and console revenue grew 7% year-over-year in 2025, but total PC and console playtime dipped slightly (down 1%). The revenue growth was driven by improved monetization.

• Despite the success of Battlefield 6, Arc Raiders and titles like Counter-Strike 2, the amount of playtime spent on shooters dropped 5% year-on-year. Meanwhile, the battle royale genre dropped heavily, down 27% in terms of playtime. This was mostly due to declines for Fortnite and Call of Duty.

• Fortnite’s decline looks worse than it is. Newzoo’s Ben Porter told us: “At the very end of 2023, we had Fortnite OG and LEGO Fortnite, and most of that playtime bump was actually captured in 2024. So, when you compare 2024 to 2025, you have more of a return to a baseline.”

• PC is projected to surpass console revenue by the end of 2028, for the first time in more than a decade. PC revenue is expected to grow at a 6.6% compound annual growth rate between 2025 and 2028, compared with 4.4% for console.

• The overall PC and console market is projected to reach $103.7 billion by 2028, Newzoo says.

• PC will exceed one billion players by 2028. This is mostly due to regional success for the platform. PC grew 11.7% in China during 2025.

• PC is still mostly about microtransactions, but premium games were the main PC growth driver in 2025, up 11.8% year-on-year.

• Premium games are growing on console, too. In 2025, premium games accounted for nearly half of console revenues. This is up 12% year-over-year.

• Console microtransaction revenues actually declined slightly in 2025.

• Games that cost more than $50 still represent nearly 80% of total premium revenues on console, but lower priced titles are increasing.

• The $30 to $50 price band is the fastest-growing tier across PC, PlayStation and Xbox.

• 26 games priced below $30 generating more than $5 million in revenue last year, up from 17 in 2024.

• PlayStation saw 81 titles surpass $5 million in revenue last year, while Xbox recorded 34.

• 79 games accounted for 80% of all playtime in 2025 on PC. On PlayStation, 74 games accounted for 80% of playtime. While on Xbox, 91 games accounted for 80% of playtime.

• Two thirds of console revenues come from the Top 20 games. Whereas on PC, half of the revenue came from games outside of the Top 20.

• On PC, games outside of the Top 20 accounted for 42% of playtime, a rise of 6% year-on-year. On PS5, 38% of playtime was spent on games outside of the Top 20 (up 3%). And on Xbox, 45% of playtime was outside of the Top 20 (up 6%).

• Minecraft saw a boost from the movie release, but Roblox actually widened its lead in the sandbox genre to 58% of the market last year.

Meanwhile….

• GDC will return to San Francisco in 2027. The event will take place March 1 - 5. San Francisco has become a hot topic amongst attendees to GDC, where some feel it is too expensive and even dangerous to attend. However, it is also the heart of the US video game development industry.

• From the beginning of June, games that contain paid loot boxes will be rated 16 under the European age-rating system PEGI. Games that offer time or quantity-limited offers will be rated 12 (although can be lowered to 7 if the game features spending that is turned off by default). Games that feature incentives for people to play at certain times, such as daily quests, will be rated 7. Games that feature paid battle passes that have elements that will be removed if results are not achieved by a certain time will be rated 12. And if a game features completely unrestricted communication functionality (without any protections of reporting facilities) will be rated PEGI 18.

• Alpha versions of the Xbox Project Helix hardware will be sent to developers in 2027. During a GDC talk, VP of next generation Jason Ronald also revealed that Xbox mode will be rolled out to Windows in selected markets. It’s designed to bring the Xbox experience to players ‘but with the flexibility of windows’.

• Pokémon Pokopia has been a hit. The Nintendo Switch 2 exclusive has sold 2.2 million copies in under a week, with one million sales in Japan alone.

• EA has laid off staff from its Battlefield team. The firm says the game remains important, but it has seen its monthly active users fall from a high of 27.3 million in November last year to (a still good) 9.4 million last month (Ampere data).

• Slay The Spire 2 hit a peak concurrent player number of 574,638. The indie sequel from Mega Crit nearly beat the 587,150 achieved by Hollow Knight: Silksong last year.

• The new studio founded by Yakuza creator Toshihiro Nagoshi is facing closure after publisher NetEase pulled funding for its debut title, Bloomberg reports. The team was told last week that NetEase plans to cut funding for Gang of Dragon, which was only announced in December at The Game Awards. The money runs out in May.

• Bossfight Entertainment has re-emerged as an independent outfit called Bossfight. The developer of Squid Game: Unleashed was part of Netflix Games, but was shut down in October last year. The developer has returned under the original leadership team of CEO David Rippy, chief product officer, Bill Jackson and COO Scott Winsett. Bossfight is working on a PC and mobile game.

• NCSoft will acquire a 70% stake in mobile developer JustPlay for $202 million. The deal is due to close by the end of April. The Korean publisher is looking to expand into the casual mobile market.

• Nintendo of America is suing the United States government over the tariffs it introduced last year. The firm is seeking a refund on the previously imposed tariffs that were struck down by the Supreme Court last month.

• Epic and Google have resolved their dispute over Play Store fees. Google will be reducing its store fees to 20% in most major markets this year. The firm will also decouple its billing system from the Play Store, allowing developers to use other payment providers.

That’s it for today’s edition. We will have lots more GDC coverage for you next week, plus a big CEO interview you have to check out. Until then, thank you for reading.