As expected. Video games such as Call of Duty and Red Dead 2 have been enjoying larger openings and overall sales than the most successful movie franchises. Ho

As expected. Video games such as Call of Duty and Red Dead 2 have been enjoying larger openings and overall sales than the most successful movie franchises. However if you examine things on the micro level, the games sector is facing a number of challenges. One is with the micro transactions model: though it is widely adopted in mobile, its inclusion in AAA titles has backfired in terms of PR. Mortal Kombat 11 and several EA titles such as Battefront 2 ans Need for Speed have been penalized heavily both by critics and vocal customers. When you combine this with the looming pressure of regulation, things don’t look great for that revenue stream. Secondly you have pressure towards subscription based models. Microsoft has the game pass, Apple is doing the arcade, Google is doing game streaming. So we’re going to see a Netflix type of subscription become more and more the norm. These games are full games, often AAA though there are some indie darlings. They’re not based on consumables. Because of this, the proportion of revenues coming from micro transactions on both mobile and console is likely to shrink, and transform. It’s going to be interesting to see how this will affect the unit economics of game studios going forward.