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Ukraine missing out its opportunity as a global player at world video game market?

Author : Iryna Shostak

Source : 112 Ukraine

Sales of next-gen consoles from Sony and Microsoft would be launched soon, it would usher in a new era in the video game industry - one of the few industries that managed to hold its ground despite the challenges posed by Covid-19
11:15, 3 November 2020

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Sales of next-gen consoles from Sony and Microsoft would be launched soon, it would usher in a new era in the video game industry - one of the few industries that managed to hold its ground despite the challenges posed by Covid-19. Moreover, the pandemic has helped to significantly expand the ranks of the followers of gaming - game addicts have woken up in quarantine in many of us.

There are really few people in the world today who, having the benefits of civilization, can firmly declare that they do not play games because even if you do not have time for computer "shooters", your mobile phone will definitely have an arcade game in which you, say you are eating watermelons or looking for crystals on your way to work or home. And it is not surprising, since the gaming industry is developing by leaps and bounds, especially in 2020, where the video game market has become one of the lucky ones, whom the pandemic did not impede in planned development, but even contributed.

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The global video game market during a pandemic

Thus, according to a study by Newzoo analytical company, last year global sales of video games jumped to $ 150 billion (7.2% more than in 2018). For comparison, Ukraine's GDP at the end of 2019 amounted to $ 140 billion - the volume of the video game market is growing at a breakneck speed, and by 2022 analysts predict an increase in sales to $ 196 billion.

It is difficult to imagine what the final figures for 2020 will be. Newzoo forecasts a volume of $ 159.3 billion, which is already almost three times the music content market and four times the world's total film distribution. This confirms the fact that the video game market exceeds traditional forms of entertainment, because if earlier it was replenished only with income from the purchase of tickets and discs, then today it has been added to sponsoring esports and advertising. Since March, when countries one after another have just started resorting to quarantine measures:

  • the audience of one of the world's largest streaming platforms for gamers Twitch (mainly used for streaming video games) has increased by a third. Other platforms also noted growth: watch time on Mixer increased by 14.9%, YouTube Gaming Live - by 10.7%, Facebook Gaming - by 3.8%;
  • in the first ten days of the release of the online shooter Call of Duty: Warzone, more than 30 million players have registered in the game, and the Steam game service regularly records record online peaks in the number of users who played simultaneously (for example, on April 4, their number was a record 24.5 million people). Similar records are shown by individual games hosted on the service - Tomb Raider, Rocket League, Counter-Strike: Global Offensive, Half-Life 2, etc.

According to AliExpress, sales of digital copies of games grew 2.3 times in April from the same period last year. It is noteworthy that the audience is growing not only of those who while away quarantine evenings by playing video games, but also those who are interested in e-sports. MarketsandMarkets (analysts who track global markets) predicts that the global esports market is expected to grow from $ 694.2 million in 2017 to $ 2.17 billion by 2023, implying an average annual growth rate of 18.6% ... Reputable video game manufacturers with a high market capitalization are in high demand in the market among investors (ensures stability, even during temporary difficulties). In particular, they include the American companies Activision Blizzard, Inc. (ATVI) - Known for its top games Overwatch, Call of Duty, Starcraft, World of Warcraft, and Electronic Arts Inc. (EA) - Owner of franchises such as FIFA and Star Wars.

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The pandemic also opened up new opportunities for the global market for games for smartphones and tablets - according to research companies IDC and App Annie, thanks to the pandemic in March, the demand for mobile games around the world increased by 35% compared to January this year. It is also worth noting that the mobile games market has already made a huge leap in development over the past 10 years: from a small segment in 2012 to a large player, which provides more than half of all industry revenues, but the pandemic also played into its hands - according to the company's forecasts ResearchAndMarkets.com, we can expect growth from $ 58.3 billion in 2019 to $ 97 billion in 2020.

But is everything really so good and won't such an increase play a cruel joke on the industry?

"Covid increased sales of video games by almost 20%, but this happened only in the first few months. Further, game production studios got the same problem as you and I, lockdowns in different countries caused delays in game production, and by the end Years more and more releases are postponed to 2021 or even canceled," says Vitaliy Volochay, co-owner of the Meinkast studio and member of the board of the Ukrainian Professional Cybersport Association (UPEA).

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Ukraine online or offline?

China, the United States, Japan, Korea, and Germany are in the top 5 of the 50 countries by revenue for the video game industry in 2018. Ukraine then was on the 46th line with an income of $ 179.2 million.

For 2019, Newzoo analysts predicted an increase in revenue from sales of video games in Ukraine to the level of $ 203 million, which, according to the representative of Wargaming in Ukraine Dmytro Bazilevych, fully reflected the objective trends in the country - the growth in the number of Internet users, which is due to the spread 4G coverage and improved economy:

"The annual growth in our country for the second year in a row slightly exceeds the global growth of the industry (13.4%). Also, every second Ukrainian gamer is still willing to pay for games."

The numbers say that Ukraine is indeed included in the development of the global industry, but what about the Ukrainian product on the world market?

Even if you are very far from gaming, you could not help but hear about such products as STALKER, World of Tanks, "Cossacks" or Assassin's Creed - what if we tell you that Ukrainians were directly involved in the development of these projects, and thanks to some of them, gamer Ukraine became famous all over the world?

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Yes, many popular projects are being created in Ukraine. For example, there is the Kyiv part of the Wargaming studio, and they made quite a lot of good content for World of Tanks. There is a studio Ubisoft Kyiv, which has been working on such expensive projects as Assassin's Creed and others for the last 10 years. There is also a completely Ukrainian company 4A Games, which released the hit Metro 2033, one of 5 games, thanks to which Ukraine has confidently established itself on the global video game market.

Frogwares company made the Sherlock Holmes series of games popular around the world ("The Adventures of Sherlock Holmes").

Also the company Best Way with the top "Behind Enemy Lines."

And GSC Game World, which presented gamers from all over the world with the mega-popular Cossacks series of games and the legend - S.T.A.L.K.E.R.

By the way, the company is currently developing S.T.A.L.K.E.R 2 - one of the most anticipated games in the world.

Ukrainians really know how to make games, moreover, since salaries in Ukraine cannot be compared with those offered by large development companies abroad, more than 15 thousand of our citizens have opened up opportunities to work in Cyprus, America, or Japan.

"The Ukrainian gaming industry is very difficult to compare with the Canadian, French, British, or American, but dozens, hundreds of countries cannot reach us and compare with us. After all, we have a legacy of such chic and historical computer games, known throughout the world as Cossacks or STALKER, and over the past 10 years this legacy has been multiplied qualitatively and quantitatively, and the total audience of games that Ukrainians are working on now amounts to more than 800 million users (they play games that are developed by our people). Our role is not zero, not bad, but I would like it to be bigger," says Vitaliy Volochay, co-owner of the Meinkast studio.

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Gaming industry is not just about games

It is worth noting that, speaking in esports language, Ukraine is actually both online and offline. Indeed, in addition to developing video games, Ukrainians have been taking part in the world esports championships since 2002 (Korea, Singapore, Italy, America and Brazil - where only our teams did not take prizes). So, one of the most memorable was the victory of the Ukrainian team Natus Vincere, known as NAVI, in the Counter-Strike Championship in 2010.

And now, only 10 years later, esports was recognized as an official sport in Ukraine. But will this in any way affect the process of game creation? More likely no than yes, because the games have been done and will continue to do so. The long-awaited decision for many Ukrainian esports players will in fact open up a number of new opportunities with the help of which, in particular, Ukraine can call itself an influential player in the industry:

  • There will be an opportunity to find new talents: before that, tournaments were held only in big cities (Kyiv, Kharkiv, Lviv or Dnipro), so it was easy to miss a talented player from a small town or regional center.
  • The positions of new sports disciplines are strengthening: while everyone is playing in the same discipline, somewhere in Lutsk, someone plays very well in a discipline that little is known about in Ukraine, unlike, for example, neighboring Poland.
  • There will be assistance with renting premises for events;
  • Support in organizational and legal matters;
  • Media coverage on all-Ukrainian resources;
  • And, most importantly, assistance in obtaining visas.

"There was an experience of holding an international tournament in Ukraine, and the problem was bared - the issue of obtaining a visa for 10 Filipino children was decided for 10-12 days in a row, 24 hours a day. Such long frauds just so that the guys could take part in the tournament, so that their Now it will be easier because the official status of eSports will help us," says Vitaly Volochay.

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But, of course, the pandemic slightly tweaked the plans of the eSports world and Ukraine, in particular, eSports fans are forced to be left without major tournaments for a while. But in the future, the decision on a new vector of movement should only play into the hands of our position in the global cyber society. The only thing that is needed for this is more than just written words about the official status of esports. We need people, a plan of action, development.

“Fortunately, we already have the Ukrainian Professional Cybersport Association (UPEA), which has presented a plan for the development of the industry for the next 10 years. cybersport world,” Vitaliy Volochay notes.

Prospects for the Ukrainian video game market

The gaming industry is really developing steadily every year, but it also has its own growth factors. It is not surprising that one of these factors is the development of next-generation: new technologies, the emergence of 4K TVs, new consoles, by the way, Sony PlayStation 5 sold out even before the start of official sales, virtual and augmented reality. Progress is gradually coming to the homes of ordinary citizens, for example, if a few years ago the same 4K TVs seemed to be something inaccessible, today you can buy a device for 350 USD and play games in Super HD quality.

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Such a future awaits virtual reality helmets, whose price today varies from 2,000 USD. In a few years, these helmets will cost like a good smartphone - about 500-600 dollars, and everyone can buy them to discover a new world of games (games like Half-Life: Alyx, where all the action takes place in the first person in virtual reality).

Many analysts confirm that gaming will soon become one of the most promising investment areas in the world. Therefore, Ukraine needs to advertise itself as a kind of Mecca for IT investors and developers, creating favorable conditions for investment, a country where most startups find life.

So we have a choice: to enter this race with dignity, replenishing the budget, developing the economy, creating a platform for the export of a national brand, or retirement and watch how other countries, developing in step with the times, replenish their treasury, in particular using the brains of Ukrainians.

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