In September, SAG-AFTRA secured deals with developers of 80 upcoming video games as its strike over actor working conditions continues. The union is pushing for protections against generative AI use in performances, alongside improved overall conditions. Among the studios signing tiered-budget or interim agreements are Studio Wildcard, Little Bat Games, and Francisco Gonzales, none of which have been directly targeted by the strike.

This follows SAG-AFTRA’s first deal with Lightspeed LA, the Tencent-owned developer behind the forthcoming game Last Sentinel. Major companies involved in ongoing negotiations include Activision, Disney, and WB Games. Union negotiator Duncan Crabtree-Ireland argued that the new agreements show the larger gaming industry supports SAG-AFTRA’s AI terms, despite the collective bargaining group’s reluctance to adopt them.¹

Doubtless, the union is seeking a bigger piece of what, according to a new report, is set to become an even bigger pie. Because the global video game industry is on track to hit $250 billion by 2028, growing at a 6% annual rate, according to a Bain & Company report. In 2023, video game revenues reached $196 billion, surpassing both streaming services and box-office sales. The industry’s expansion has been fuelled by mobile gaming, cloud platforms, and virtual reality, appealing to a broad audience, with 52% of people across all ages playing regularly. However, video games remain especially popular among younger generations, with 80% of those under 18 identifying as gamers.

Gaming has evolved into a social platform of its own, particularly since the pandemic, with players spending 30% of their entertainment time in virtual game environments. Co-creation games like Minecraft and Roblox, which allow users to generate their own content and share it, have become particularly popular, with 79% of gamers playing them.

Generative AI is poised to further transform gaming, offering players more tools to customize their experiences. Influencers who stream games are driving additional engagement. The study also highlighted the MENA region (Middle East and North Africa) as a rapidly growing market, with a 25% annual growth rate, outpacing China.²

Capcom Co Ltd

Capcom has announced that Monster Hunter Wilds, the latest instalment in its blockbuster series, will launch globally on February 28, 2025. The Monster Hunter franchise, which debuted in 2004, has become a global phenomenon, selling over 103 million units as of June 2024. The new game continues the series’ tradition of pitting players against massive creatures in stunning natural environments.

At the upcoming Tokyo Game Show 2024, Capcom will offer the first playable demo of Monster Hunter Wilds, with more than 150 demo stations available, the most in the series’ history. These stations will be featured at both the Capcom and PlayStation booths.

Capcom is committed to meeting high fan expectations by delivering engaging gameplay experiences for fans across platforms. Monster Hunter Wilds will be available on PlayStation 5, Xbox Series X|S, and PC platforms.³

Nexon Co Ltd

Nexon has officially spun off game developer Mintrocket as a wholly owned subsidiary, aiming to bolster the studio’s brand and reputation for rapid game development. Jaeho Hwang has been appointed as Mintrocket’s first CEO, overseeing the company’s strategy of creating highly innovative, small-scale games for a global audience. Nexon’s move is intended to complement its own strength in large-scale gaming, while allowing Mintrocket to continue its fresh, nimble approach to game development.

Mintrocket’s debut game, Dave the Diver, achieved significant success, surpassing four million sales and earning both a BAFTA Award and an “overwhelmingly positive” rating on Steam. Nexon, known for Maple Story, posted record revenue growth of 19.7% year-over-year in its 2023 earnings report, driven by the release of new titles and game updates, despite global economic challenges. This acquisition further strengthens Nexon’s portfolio and positions Mintrocket for continued growth.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: https://evolveetfs.com/hero/.

Portfolio Strategy and Activity

For the month, NetEase Inc made the largest contribution to the Fund, followed by International Games System Co Ltd and Konami Group Corporation. The largest detractors to performance for the month were Electronic Arts Inc, followed by Take-Two Interactive Software, Inc and Ubisoft Entertainment SA.

Sources

  1. Batchelor, J., “Developers behind 80 games sign deals with SAG-AFTRA,” GamesIndustry.biz, September 6, 2024; https://www.gamesindustry.biz/developers-behind-80-games-sign-deals-with-sag-aftra
  2. “Global video game industry on a healthy growth trajectory to $250 billion,” Consultancy-me.com, September 4, 2024; https://www.consultancy-me.com/news/9177/global-video-game-industry-on-a-healthy-growth-trajectory
  3. “Globally Anticipated Monster Hunter Wilds Scheduled to Launch February 28, 2025!,” Capcom Co Ltd, September 25, 2024; https://www.capcom.co.jp/ir/english/news/html/e240925.html
  4. Blake, V., “Nexon establishes Dave the Diver developer Mintrocket as a new wholly owned subsidiary corporation,” GamesIndustry.biz, September 11, 2024; https://www.gamesindustry.biz/nexon-establishes-dave-the-diver-developer-mintrocket-as-a-new-wholly-owned-subsidiary-corporation

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