General Industry Update

Final industry figures from 2023 are out, and they show the global gaming market beginning a rebound after a challenging 2022, generating $184 billion in revenue—a +0.6% increase following a -5.1% decline in 2022.

Downloaded and boxed PC games, making up 21% of the market, saw a notable 5.3% growth, amounting to $38.4 billion. Despite accounting for nearly half of the market share, mobile games experienced a 1.6% drop in revenue.

The United States and China dominated global spending, contributing 49% to the total, with the U.S. spending $47.3 billion and China $43.6 billion. The Middle East & Africa, although only representing 4.7% of global revenue, displayed a robust growth rate of 4.7%. The Asia-Pacific region, home to 46% of total game revenues, witnessed a slight 0.8% decline, partly due to new privacy regulations affecting mobile gaming.¹

These privacy regulations complicate advertising efforts and are part of the reason many mobile game developers are looking to PC and console platforms to diversify revenue streams and tap into broader audiences.

The shift comes as mobile gaming, while still growing to an expected $98 billion by 2026, faces slowing expansion rates. Conversely, console gaming is forecasted to see a 6.7% compound annual growth rate (CAGR) to 2026 and generated $53.2 billion in 2023, a 1.9% increase year over year.

Mobile game developers are not just porting their existing titles to these platforms. They are also crafting new games specifically for PC and console audiences, to create unique intellectual properties and capitalize on their expertise in live-service models and user acquisition strategies. This transition allows them to bypass the constraints of the mobile market, enhancing engagement, retention, and profitability.²

Looking forward, the overall video game market is expected to climb to $205.4 billion by 2026, with a compound annual growth rate (CAGR) of 1.3% from 2021 to 2026, signalling optimism for the industry’s future.³

Company Specific Updates

AppLovin Corporation

A recent study by AppLovin and analytics firm Adjust reveals a global 4% increase in app installations in 2023, countering the decline seen in 2022 and underscoring mobile’s robust potential for high returns and untapped opportunities. Specifically, gaming app installations saw a notable resurgence, climbing 7% in the fourth quarter of 2023, led by action (18%), hyper-casual (14%), and puzzle (14%) genres.

The report highlights the success of the hybrid casual gaming genre in leveraging personalized user experiences (UX) to significantly enhance retention rates and revenue, suggesting that sectors such as e-commerce and finance could benefit from adopting similar data-driven and AI-powered strategies for in-app customization.

By utilizing generative AI, developers can segment users and tailor game progression, making it appear as though the game’s difficulty is personalized for each player, demonstrating a cutting-edge approach to enhancing user engagement and satisfaction in the mobile gaming industry.⁴

NetEase Inc

In February, NetEase Games unveiled BulletFarm, a new AAA game studio led by award-winning industry veteran David Vonderhaar, renowned for his work on Call of Duty, and creative director Chris Cowell. The studio, headquartered in Los Angeles, focuses on cooperative gameplay in an original universe, utilizing Unreal Engine 5 to deliver a fresh take on first-person gaming, focused on an intimate, relatable gaming experience. The studio is actively recruiting top talent to fill key roles in the founding team.⁵

Also in February, NetEase announced Q4 2023 results, with total net revenues of US$3.8 billion. Game-related revenues were US$2.9 billion, with online games contributing 93.4% of this total. Mobile games made up 76.7% of online game revenues. Key franchises like Fantasy Westward Journey and Westward Journey Online maintained strong user appeal. Eggy Party reached over 500 million registered players since its 2022 launch, with a record 40 million daily active users during the recent Lunar New Year. The Justice franchise hit 100 million active users thanks to engaging new content and in-game events. Racing Master performed well in Hong Kong, Macau, and Taiwan, and topped local charts during its first week of launch.⁶

HERO ETF: Diversified Investing in Video Games

Interested in a diversified approach to investing in video games? Canada’s first esports and gaming ETF, the Evolve E-Gaming Index ETF (HERO ETF), is an index-based exchange-traded fund that invests in the leading video game companies across the globe. To learn more about HERO ETF, please click here:

Portfolio Strategy and Activity

For the month, AppLovin Corporation made the largest contribution to the Fund, followed by NetEase Inc and Konami Group Corporation. The largest detractors to performance for the month were Take-Two Interactive Software Inc, followed by Sega Sammy Holdings Inc and Embracer Group AB.



  1. Wijman, T., “Newzoo’s games market revenue estimates and forecasts by region and segment for 2023,” Newzoo, February 8, 2024;
  2. Wijman, T., “Why mobile developers are porting games and creating new titles for PC and console,” Newzoo, February 8, 2024;
  3. Wijman, T., “Newzoo’s games market revenue estimates and forecasts by region and segment for 2023,” Newzoo, February 8, 2024;
  4. “Adjust and AppLovin Reveal Ways AI-Powered Personalization Will Drive Next Mobile App Growth Phase,” AppLovin, February 20, 2024;
  5. “NetEase Games Introduces BulletFarm, a New AAA Global Game Studio Led by Award-Winning Industry Veteran David Vonderhaar,” NetEase, February 28, 2024;
  6. “NetEase Announces Fourth Quarter and Fiscal Year 2023 Unaudited Financial Results,” NetEase, February 29, 2024;

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