General Industry Update

In the second edition of Newzoo’s annual PC and console report, the gaming industry reflects on a year marked by highly anticipated game releases and significant layoffs. Although the market rebounded after a slight dip in 2022, substantial growth remains elusive. Overall playtime is expected to decrease for most gamers in 2024, and market consolidation will direct more attention and funds to fewer games and studios. Nevertheless, optimism prevails, fueled by emerging markets attracting new players and gaming becoming increasingly mainstream.

The report examines the current market landscape, offering insights to navigate a challenging environment. Besides highlighting current trends, the report identifies potential opportunities in 2024 and beyond. The forecast predicts a conservative yet steady growth trajectory, with the market expanding by an estimated $13.4 billion from 2023 to 2026. Console gaming is expected to drive most of this growth, buoyed by factors such as the game-as-a-platform model and the anticipated launch of a new Nintendo device. The expanding console install base, coupled with a shift in household budgets towards late-cycle software, is poised to fuel further growth. Noteworthy 2023 successes like “Baldur’s Gate 3” demonstrate that meticulously crafted games, attuned to their player communities and offering depth, can still thrive.

Looking ahead, the Newzoo report forecasts a Compound Annual Growth Rate (CAGR) of 1.6% for PC players, reaching 909 million, and 3% for console players, reaching 664 million by 2026. Despite challenges and market shifts, the report underscores opportunities for adaptation and growth in the evolving landscape of PC and console gaming.¹

Company Specific Updates

Embracer Group AB

Embracer Group has announced its intention to divide into three distinct entities: Asmodee Group, “Coffee Stain & Friends,” and “Middle-earth Enterprises & Friends.” This strategic move, revealed by the Board of Directors in April, aims to enhance shareholder value by allowing each entity to concentrate on its core strategies independently.

Asmodee Group (focused on board games, trading cards and digital board games) and “Coffee Stain & Friends” (focused on PC, console and mobile games, community-driven free-to-play games, LiveOps games, and indie/AA games) are set to become separate publicly listed companies on Nasdaq Stockholm, while “Middle-earth Enterprises & Friends” (focused on AAA game development and publishing for PC/console in The Lord of the Rings and Tomb Raider IPs) will remain under Embracer Group, undergoing a name change in the process.

The proposed move seeks to streamline operations and unlock the full potential of each entity, allowing for more focused execution of their respective strategies. This strategic realignment comes after a period of significant investment and organic growth initiatives within Embracer Group aimed at maximizing its portfolio of franchises and IPs.

As part of the restructuring, Asmodee and “Coffee Stain & Friends” will be distributed to Embracer Group shareholders as dividends. The anticipated timeline involves Asmodee’s listing within the next 12 months and “Coffee Stain & Friends” listing in the calendar year 2025.²

Modern Times Group MTG AB

Modern Times Group announced in April the acquisition of AutoAttack Games by its wholly-owned game studio Ninja Kiwi. Founded in 2014, AutoAttack Games is renowned for its tower defence hit, “Legion TD 2.”

“Legion TD 2” boasts a dedicated player community, with ongoing updates and plans for a new game in the Legion franchise. Ninja Kiwi CEO Scott Walker expressed enthusiasm for the acquisition, citing alignment in passion for tower defence games and community support. Brent Batas, CEO of AutoAttack Games, echoed the sentiment, highlighting shared values and excitement for the future under Ninja Kiwi’s wing.³

Also in April, Modern Times Group announced robust Q1 results, with revenues climbing 11% to $1.3 billion USD, buoyed by PlaySimple’s diverse portfolio, including Word Search, Snowprint, and InnoGames’ thriving live-ops. Adjusted EBITDA surged by 51% to $365 million USD, marking a 27% margin. Growth stemmed from PlaySimple’s expanded scale in 2023, coupled with reduced expenses and rising browser revenues from InnoGames, offsetting lower user acquisition spending.⁴

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, Embracer Group AB made the largest contribution to the Fund, followed by Ubisoft Entertainment SA and AppLovin Corporation. The largest detractors to performance for the month were Nintendo Co Ltd, followed by NetEase Inc and Roblox Corporation.



1. “The PC & Console Gaming Report 2024,” Newzoo, April 2, 2024;
2. “Embracer Group Announces Its Intention to Transform into Three Standalone Publicly Listed Entities at Nasdaq Stockholm,” Embracer, April 22, 2024;
3. “Ninja Kiwi Acquires Autoattack Games, The Studio Behind Legion TD 2,” Modern Times Group, April 16, 2024;
4. “MTG Reports Strong Q1 With Revenues Up 11%, Adjusted EBITDA Up 51% and an Operating Margin of 27%,” Modern Times Group, April 24, 2024;

Header Image Source: Getty Images Credit: Blueringmedia

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