BCG+游戏规则改变者：加速媒体行业最具活力的部门

Game

Changer:

AcceleratingThe

Media

Industry’s

MostDynamic

SectorJune2023By

Dr.

AlexanderSchudey,

Pavel

Kasperovich,AdeelIkramandDavidPanhansBoston

Consulting

Group

partnerswithleadersinbusinessandsociety

to

tackle

theirmostimportantchallenges

andcapture

theirgreatestopportunities.

BCGwas

thepioneerinbusinessstrategy

whenitwas

founded

in1963.

Today,weworkcloselywithclientsto

embrace

atransformational

approach

aimedatbenefiting

allstakeholders—empowering

organizations

to

grow,buildsustainable

competitiveadvantage,

anddrive

positive

societalimpact.Ourdiverse,

global

teams

bringdeepindustryandfunctionalexpertise

anda

range

ofperspectivesthatquestion

thestatus

quo

andsparkchange.BCG

delivers

solutionsthrough

leading-edgemanagement

consulting,technology

anddesign,andcorporate

anddigital

ventures.

We

workinauniquely

collaborative

model

across

thefirmandthroughout

alllevels

oftheclientorganization,fueledby

thegoal

ofhelpingourclientsthrive

andenablingthemto

make

theworlda

betterplace.The

gaming

sector

is

unique.

Originally

viewed

as

a

children’s

diver-sion,

attracting

limited

attention

compared

to

TV,

movies,

or

music,gaming

is

now

by

far

the

fastest

growing

sector

of

the

media

industry.With

the

average

player

age

recently

exceeding

30

years

old,

gamingis

now

the

second

largest

media

sector

that

is

aboutto

reach

$200billion1.

Gaming

IP

has

become

key

to

attracting

new

audiences,indicating

future

growth

potential.

As

part

of

BCG’s

series

of

gamingreports,

following

on

from

‘Gaming

&

Esports

Media’s

Next

ParadigmSHIFT’,

this

report

aims

to

map

gaming’s

current

spectacular

journey,highlighting

some

key

trends

and

opportunities

bothglobally

and

inthe

MiddleEast,

which

business

leaders

and

companies

can

leverageto

join

this

dynamic

sector.1.

Newzoo,

OvumBOSTONCONSULTINGGROUP1Key

insightsGamingisontherise•

Unprecedentedgovernmentinvestments:

SaudiArabia’sPublicInvestmentFund(PIF)allocated$38billiontoSavvyGamesGroupto

investingamingandesportsacrossthefullvaluechain(andpotentiallymorefundsfor

otherleversto

developthegamingecosystem)withmultipleacquisitionsingaming(EmbracerGroup,

Scopely)andesports(ESL,

FACEIT,

VSPO)havebeenalreadyexecuted;

AbuDhabiGamingcreatedadedicatedgamingandesportshubwith•

Gamingisthe#2mediasect2022witha

pathto

reach

>$210billioninthenext3

years.•

Mobileisthe#1gamingsegment(>50%inrevenues):drivenby

casualgamerswitheasyentry(smartphone)andfree-to-playmodel,

enjoyingmostly“time-killer”games.

e.g.,

smartphonepenetrationinIndonesiadrove

significantMobileLegends:

BangBang(ML:BB)adoptionstrongincentives.•

Leaderingamestreaminggrowth:

whileChinawillbe

thelargestmarketfor

streaming,

reachinga~265millionaudiencein2025,

MiddleEast&NorthernAfricawillgrow3timesfaster(24.5%vs

7.6%CAGR)to

reach~200millionpeoplein20252.•

PC/Consoleare

stillstrong:

majorplatformsfor

coregamersthatdemandfullimmersionandadvancedgameplay.

Livegamestreamingsustainsinterestfromawideraudience.

e.g.,

EldenRingwas

#1instreamingThereare

manyopportunitiesto

enterthe•

MobileandPC/Consolehave

startedto

converge:maintrendisinIPasmanyPC/Consolegamesareadaptedto

Mobile(LeagueofLegends(LoL)–LoL

Wildplayingfield•

Directinvestmentisastraight-forwardpathfollowedbymanyVCs

likeBitkrPlayerUnknown’sBattlegrounds(PUBG).

Cross-playisa5+yeartrenddueto

vastdifferencesingameplay.•

Mediacan

buildcontentongamingIP:

e.g.,

NetflixcreatescontentaroundgamingIP(Arcane,

Cyberpunk2077,

Dotato

nameafew)andgamesonownIP(e.g.,StrangerThings).•

Gamepublishersadopta“lessismore”strategy:

mainfocusisongamesbasedonprovenI

P,thatcan

be

sustainedandevolvedfor

10-20years.

e.g.,Activision-Blizzardbuildsaroundcore

IPfor

25+years(Warcr•

IPownerscan

buildflywheels:

e.g.,

Tencent

promotesIPthroughmediacontent(gaming,

video,

books)andbeyond(e-commerce,

travel,

F&B).•

Microffering:

hardware(Xbox,

HoloLens),

content(publisher–Activision-Blizzard;

user-generated–Minecrinfrastructure(Azurecloud)thatcan

be

bundledintoasinglesubscription(Xbox

GamePass).•

Technology

companiescan

utilizemultiplesynergies:e.g.,

Applecreatedone-stop-shopfor

games,

video,music,

fitness,

andcloudstorage(AppleOne);

Metaexperimentedwithlivegamingstreamingintegratedinitssocialnetwork(Facebook)andwilllikelyleveragegamingtechnologyfor

itsMetaverseplay.TheMiddleEastisemergingasagamingpowerhouse•

Telecom

operators(telcos)can

leveragegamingtostrengthenbrandfor

itsaudience:

sometelcosintegrategamingintotheiroffering(e.g.,

KPNoffersitscustomersaccessto

in-gameitems;

DeutscheTelekom

andLGUplusoffercloudgamingservicesto

theircustomers),whileothersfollowaudience’sattention(e.g.,

SKTelekom

andOoredooinvestedinesportsclubs).•

Highestgamingpenetration:

>60%ofthepopulationare

gameenthusiasts,

resultinginthehighestshareofgamingmobileappdownloads(50%vs

40%globallyoftotalappdownloadsare

gamingapps).•

Long-termcommitmentto

thesector:

SaudiArabiarecentlyannounceditsgamingandesportsstrategy,andUAE

hascreatedtwogamingcentersto

attractglobalcompanies.2.

Newzoo“Gaming’sLiveStreamingAudienceWillHit1.4Billionby2025”2GAME

CHANGER:

ACCELERATING

THE

MEDIA

INDUSTRY’S

MOST

DYNAMIC

SECTORTheDriversofGlobalGaming

GrowthTheCOVID-19pandemicspurredgrowthinvariousmediaandtechnologysectorsin2020.

Withinmedia,gamingoutpacedothersegmentswithan8%growthHowever,

theindustryisexpectedto

resolvethesechallengesandrecoverinmid-term,

asgamesbecomemoreembeddedineverydaylife[Exhibit1].

Gameshaveconsistentlyhelda40%shareofglobalmobileappdownloadsoverthepast5years.

ThenumberisevenhigherintheMiddleEast,

reaching45-50%in20205.rate

to

reach$198billion(versusTV’s1%declineto

$408billion3).

Thesector’sgrowthslowedin2022for

severalreasons,

includingtheendofpandemicshutdownsandApple’sprivacychangesaffectingmobilegamingads.Themarketsizedroppedto

$184.4billion4,

withmobilegamingaccountingfor

50%ofrevenues.3.

Newzoo,

Ovum,

Omdia4.

Newzoo“TheGlobalGamingMarketPer

Segment2022”5.

AppAnnieBOSTONCONSULTINGGROUP3Exhibit1-Gamingisa~$185bmarketwithstrongmid-termgrowth+6%3.6+11%$300Bn3.23.03

Bn2

Bn1

Bn0

Bn2.72.52112.42.3198$200Bn$100Bn$0Bn2.118417814550%-55%13850%12248%50%10744%45%42%40%20%-25%24%23%22%29%29%24%29%29%29%30%30%29%26%28%25%-30%20162017201820192020202120222025EGamersMobilePCConsoleNote:ViewershipincludesesportsenthusiastsandCasualviewers;2022–2023expectedgrowthbasedonCAGRanalysisfrom2018-2020Source:NewZoo,OVUM,ConsortiumanalysisTheMiddleEastisauniquemarketfor

gaming.HowevermobilegamesabsorbtwiceasmanyhoursperweekasPC/console

games,

andthemobilegamingmarketismorediverse[Exhibit2].

Itattractscasualplayerswhoenjoy“timekiller”gameslikeCandyCrushbutmay

notidentifythemselvesas“gamers.”

Nevertheless,

thesecasualplayerscontributesubstantiallyto

thegrowthofthemobilegamingmarket.GovernmentsintheGCC

regionhave

investedheavilyintheindustryandrecognizeditspotential,

implementingstrategiesto

attractgamingcompanies.

InSaudiArabia,aNationalGamingandEsportsStrategyplansto

create40,000jobsanddevelop30gamesby

2030,

whileintheUAE,

ADGamingandDMCCGamingCenteraimto

attractglobalbusinessesandsupportlocaltalent.TheMiddleEastisasignificantmarketfor

bothcore

andcasualgamers.

SaudiArabialeads,

withamarketof~$1.8billion[Exhibit3].

Itisaskewedtowardsmobilegamingwhichaccountsfor

>65%revenues,

thoughthisispartiallyexplainedby

astrongerpresenceofnon-casualmobilegameslikePUBG

Mobile,

FreeFireandFIFA

inthetop-10downloads(versusonlyFreeFireinthetop-10globally)6.GamersonPC/Consolevs.

MobileThegamingsectorisexpandingandchanging,

whichmakesthedefinitionofa“gamer”morenuanced.

Whilemobiledominatesthegamingmarket,

thesplitofrevenueacrossdifferentplatformsdoesnotalways

matchthepreferencesofthecore

globalgamingcommunity.Accordingto

aBCG

surveyof10,000participantsfrom10countries,

mostcore

gamersprimarilyplay

onPC

andconsole.

ThisisbecauseonlyPC/console

gamesenablehigh-engagementAAAtitles,

demandingmoreplayer’sfocusanddedication.6.

AppAnnie4GAME

CHANGER:

ACCELERATING

THE

MEDIA

INDUSTRY’S

MOST

DYNAMIC

SECTORExhibit2-Mobilegamingisstilldominatedby“TimeKillers”ShareofGlobalDownloadsbyGamingGenresin2019ShareofGlobalTimeSpentGamingGenresin2019TraditionalCore-otherCasual-otherCasualHybrid/other1%Shooter6%5%5%3%ActionCasual8%18%CoreCore44%38%Mobilegamesshowreal15%47%34%mass-marketappealwithhighvarietyofcasualgames,withcoregamesbeing55%82%7%21%10%moreengagingCasual-otherPuzzleArcadePuzzleCore-otherRPGActionNote:

downloadbreakdownamongtop100Gamesbydownloads,CombinedIOSandGooglePlay,timespentbasedonAndroidMAUSource:

AppAnnie,BCGanalysisExhibit3-SaudiArabia,

aleadinggamingmarketintheMENAregionSaudiArabiaisa1.8$BgamingmarketSaudiArabiarepresents~45%oftheMENAgamingmarket0.4$B4$B0.3

$B0.4

$B38%62%0.4$B16%3.2$B84%55%62%1.2

$B45%PC38%ConsoleMobileOtherMiddleEastSaudiArabiaMobileConsolePCTotalSource:

Statista“DigitalMedia-SaudiArabia”andGlobalData“MarketSizeofConsoleGaminginMiddleEast&Africa(2017–2021,

$Million)”BOSTONCONSULTINGGROUP5ChangingGamerPreferencesAccessibil

ity•

Mobilegaminghasoutpacedotherplatformsoverthelasttwodecades,smartphones,

whichenabledmobilegaminggrowth.WhilePC/console

andmobileexperiencesare

different,theyhave

startedslowlyconverging.

Mobiledevicescannowoffer

veryhigh-quality

graphics

andgaming

experiences,whilesmartphoneevolution

increasingly

reflects

andenablesthesophisticatedgameplaythatwas

previouslyavailableonPC/console

only.

Also,

assmartphonesare

tailoredtocommunication,

mobilegamescan

integratesocialgamingfeaturesbetterthanPC/console.•

Oneexampleofthisisthemobilemultiplayeronlinebattlearena(MOBA)gamecalledML:BB-MobileLegends:

BangBang,

whichdominatesinIndonesiawith69.7%smartphonepenetrationand192.15millionusers.Itsreleasecoincidedwiththesmartphoneboom

inthecountry.Thishasledto

morepopularPC/console

(thoughmostlyPC)

titlesbeing

adapted

to

mobile,

includingleadinggameslikeLeagueofLegends(LoL

–mobileversionisLoL

WildCon

verg

en

ce•

Platformsservedifferentpurposes.

For

example,

mobilegamingmay

be

usedduringcommutes,

whileconsolegamingisthepreferredplatformfor

AAAgameswithhigh-qualityvisualsandengagingstorylines.Someleadinggamesare

evengoingwithmobilefirst(e.g.,PUBG).

Andmanytitlesinitiallyreleased

onPC

orconsoles,suchasMinecrare

experiencingresoundingsuccessonmobile.

AnotherexampleisSquareEnix,

whichacquiredEidosandreimaginedpopulargameslikeHitman,

Tomb

Raider,andDeusExby

releasingIP-drivenmobilepuzzlegames.•

Platformsalreadyconvergeby

leveragingthesamegamingIP,whichwillacceleratewithcloudcomputinginthemid-to

long-term.Business

ModelHowever,

trueconvergenceresultingincross-playisstillfar

frombeingfullyimplemented.

Whileitcan

be

easilyrealizedinsomegamegenres(e.g.,

thecollectiblecardvideogame(CCG)

Hearthstone),

itisdifficultto

ensurethesameexperiencefor

shootersorRPGswhosegameplayisheavilyoptimizedfor

PC.

Anadditionalchallengefor

cross-platformdevelopmentistheneedto

optimizeagameforanincreasingnumberofdevices7.

Whilepublisherstrytosolvebothchallenges,

itwilllikelytake

5yearsormoretoreachfullconvergence.•

Theriseofcasualgames,

whichare

designedto

beplayedinshortperiodsoftime,

hasdriveninnovationinthemonetizationofmobilegames,

makingthemaffordablefor

awideraudience.•

Mobilegamingismostlymonetizedthroughadvertising,whichistechnicallyfreefor

aplayer,

whilePC/consolegamesare

yetto

realizethepotentialofthismodel[Exhibit4].Uniquemarketconditionsare

acceleratingmobilesegmentgrowthintheMiddleEast.

WithhalfitsGrowthDriversinMobilepopulationunder25yearsoldandtech-savvy,

thesecountriesrequirelocalizedcontent.

For

example,

ChinesepublisherTencent

deployedanArabicversionoftheBattleRoyale

game(PUBGMobile)intheregion.

ItisnowoneofthemostpopulargamesintheMiddleEast8

(top-5inmobileappdownloadsinSaudiArabiaandtop-3inUAE9).Themobilegamingindustryhasexperiencedsignificantgrowthinrecentyears,

withthewidespreadadoptionofsmartphonesandtheincreasing

power

ofmobilecomputing.AndPC/console

gamepublishersare

activelyinvestinginthistrend.

Factors

contributingto

thisgrowthinclude:7.

Dirox“MobileGamesTrends

andBusinessOpportunities”8.

Entrepreneur“TheMiddleEastisKey

forGaming”9.

AppAnnie6GAME

CHANGER:

ACCELERATING

THE

MEDIA

INDUSTRY’S

MOST

DYNAMIC

SECTORExhibit4-In-gamepurchasesbecomeleadingrevenuestreamIn-gamepurchasesareattributedtoF2Pgamesthatiswhythisrevenuesourceis#1for

PC/mobilegamesOtherinsightsfromthevideogamesmarketresearchUSDatafor2022In-gamepurchasevolumesaremainlybuiltby“bigshots”ingaming:

50%ofpurchasesaremadeby0.2%ofbuyersMobile50%50%In-gametransactionsAdvertisinginappDigitalsalesmarginis1.2timesashighasphysicaldiscsmargin,

e.g.,

Ubishotsalesstructure:

digitalsalesmarginis92%whilephysicaldiskssalesmarginis71%35%65%PCIn-gametransactions/subscriptions

Sales(game+DLC)Console38%62%In-gametransactions/subscriptionsSales(game+DLC)Source:

Data.aiandNewzooreport“HowDLC

boostsengagementforPCandConsolegames”WhatAboutthePC/ConsoleMarket?growthfactorfor

PC/console

market–theriseofgamestreamingasseparatecontent,

runby

bothprofessionalplayersandcasualgamers.Despitemobilebeingthetop-linedriverofthegamingmarket,

itdoesnotmeanthatthePC/console

isindecline.Core

gamersstillpreferplayingonPC/console

asgamesare

moreimmersiveandcomplex.Thegrowthofgamingstreamsisaglobalphenomenon,whichincreasedmarkedlyduringthepandemic.Streaming’saudiencewillexceedonebillionpeoplein2023,

increasingwithaCAGRof+16.3%from2020toreach1.4billionin202510[Exhibit5].

Twitch,

theleadingplatform,

reached140millionmonthlyactiveusers(MAUs)and31milliondailyactiveusers(DAUs)

inJanuary2023.ConstantlyimprovingvisualandgamecontentandleveragingpopularIP(e.g.,

therecentHogwartsLegacy)have

traditionallyformedtheheartofgaming’sstrongappealto

ayoungaudience.

Today

thereisanadditional10.Newzoo“Gaming’sLive-StreamingAudienceWillHit1.4Billionby2025”BOSTONCONSULTINGGROUP7Exhibit5-Gameslivestreamingaudiencegrowth1412.6M+16.3%Global|For

2020,

2021,

2022and2025CARG2020-2025921.2M+13.8%809.6MYoY+22.2%YoY662.6M2020202120222025Source:

Newzoo“GlobalEsports&LiveStreamingMarketReport2022”Whilestreaminggrowthhasslowed,

viewershipisstillup6%fromitsCOVID-19pandemicpeakin2020,

and164%higherthan2018.

Livestreamingslightlydecreasedin2022,

butTwitch

was

theleastaffected,

droppingonly6%YoY

andkeepingitsstrongleadershipposition.

FacebookGamingwas

hitthehardestin2022,

dropping56%YoYfrom2021.

WhileYouTub

eGaminghasalsoseenadecreaseinhourswatched,

ithassincepulledaway

fromFacebookasthedefinitivesecondmost-utilizedlivestreamingplatformintheWest11.Streamingplatformsalsoplay

asignificantroleindiscoveringandpromotingnewgames.

SinceEpicGames’successwithFortnite,

whenitcementeditsleadershippositionby

payingtopstreamersto

play,

moregamesfollowsameapproach(to

streamers).

Somenewertitlesstronglybenefitfromstreamingatthetimeofrelease,

likeEldenRingwhichbecamealeaderinstrresultedin12millionunitssoldinfirst2weeksandsignificanttimespentwithingame12.GamestreamingiswhypopulartitleslikeLoL

orFortnitestay

relevantfor

thecommunityasitallowsinteractionwithtopstreamers.

Gamepublishersalsoreward

thosewhowatchstreamswith“drops”–giveaways

ofuniquedigitalitemsto

peoplewhowatchastreamfor

acertaintime.

Bothelementsincentivizepeopleto

watchtheirfavoritestreamsandstrengthenstheircommitmenttothegame.Theimportanceoftheseplatformsishardtooveremphasizeasviewerstendto

stay

onplatformratherthanfollowtopstreamers.

For

example,

apopularstrmilliondollars;

however,

mostviewersstayed

onTwitch,whichwas

oneofthereasonsfor

Mixer’sclosure13.

Thatiswhygamepublishersneedto

relyontheseplatformsandworkcloselywiththemratherthancreatetheirown.11.StreamHatchetVideoGameStreamingTrends

-2022Yearly

Report12.Ginx“EldenRingPlayer

BreaksGameClockWith1000HourPlay

Time”13.Distractify“Fortnite’

StreamerNinja

Returns

to

Twit8GAME

CHANGER:

ACCELERATING

THE

MEDIA

INDUSTRY’S

MOST

DYNAMIC

SECTORChinaisexpectedto

remainthelargestmarketfor

livestreamingaudiences(forecastCAGRof7.6%from2020to267.5millionpeopleby

202514).

However,

theoverall

growthcomes

from

MiddleEast&

NorthAfrica.

Theaudience

forlive-streaming

games

inthesemarkets

isexpected

toincrease

with24.5%CAGR

reaching

202.3millionby2025.millionsofdollarsininvestment.

For

example,

RockstarGames’GTA

Vhadabudgetof$260millionandCDProjekt’sCyberpunk2077hadabudgetofover$300million16.Considering

thevariety

demandedby

core

players,

itisnotrealisticfor

publisherstcycles

innearfuture.

Instead,

hundreds

ofhigh-profile

AAAgames

are

released

eachyear,

thoughonlyahandfulofthose

have

budgets

at

the

level

of

GTA

Vor

Cyberpunk

2077.PublishersAdaptto

NewTrendsWithsuchdynamicchangesintheindustry,

gamepublishersanddevelopersare

adjustingtheirstrategies.Whilethismodelexpandsopportunitiesto

generate

areturn

oninvestment

over

alonger

shelflife,

majorgamesstill

require

large

upfront

investment

and

long

developmentperiods,

whichcan

delay

cash

inflowsfor

several

years.New

Business

Model

sInnovationinthemobilemarketincentivizedpublisherstoexplorenewmonetizationmethods,

inparticular“free-to-play”within-gamemonetizationinsteadofupfrontpurchase.

ElectronicArtsreleaseditsflagshipshooterfranchiseBattlefieldwithafree-to-playversioncalled204215.Competition

for

Popul

ar

IPFocusonprovenIPisastrongmediaindustrytrend,extendingwellbeyondgaming.

Consideringthesignificantinvestmentsrequiredto

createblockbustersandhighaudienceexpectations,

recognizedIPreducescommercialrisks.

Infilmandvideo,

franchiseslikeFast

&FuriousandMarvelhave

gainedsubstantialinvestmentsandextensions.

Gamingfollowsthesamepath,

withpublisherssuchasActivision-Blizzard,

NaughtyDog,

andTencentaggressivelybuildingontheirexistingIP.

For

example,Activision-BlizzardhasfocusedonitsCallofDuty,

Diablo,WarcrThepotentialto

extendthelifecycleoftheirtitlesthroughnewcontentandin-gamepurchasesmakattractivecomparedto

developingcompletelynewgameseveryfew

years.

However,

publishersmustcarefullydesignmonetizationto

ensureitsupportsthegameanditscommunity,

notharmitwith:•

“Pay

to

win”

mechanicsthatimpactgamerexperienceandbecomesimilarto

gambling.OverlastdecadesmajorIPfranchiseshave

createdactive,loyal

communities.

Aswithcomicstwodecadesago,

themovieindustrynoticedthistrendandhasturnedtogamingIPasasourcefor

newcontent[Exhibit6].

Inreturn,

thisprovidesanopportunityfor

gamepublisherstoextendthecommunityfor

theirgamesandattractnewaudiences.

Beyondmovies,

publishersare

alsoleveraginggamingIPinothersegmentslikeamusementparks,

toys,andretail.

ThesefurtherstrengthentheconnectionwithIPfansandbenefitthegames.•

“Playto

earn”,

whichhaspotential,

butsuccessdependsontheecosystemandcan

be

risky.

EarningcryptocurrencythroughblockchainbasedgaminghasattractedcompanieslikeGalagames,

whichwillbe

releasingmultipletitlesinthenearfuture.

AxieInfinityisgamethathadplayersearningcryptocurrencyandsaw

aspectacularrise,

particularlyinthePhilippines,

buthasalsosufferedasignificantdropinfortunesduringtherecenttechnologyrecession.

Likeanynewtechnology,

itneedsto

be

testedovertimeto

knowwhatwillwork.Growth

in

Gamin

g

Bud

g

etsExtensionofagame’slifecycleaswellasthedemandformoreimmersiveandhigh-qualityexperiencesdrivepublishersto

investmoretimeandresourcesindevelopingtheirgames.

AAAgamesrequiretensorevenhundredsof14.Newzoo“Gaming’sLive-StreamingAudienceWillHit1.4Billionby2025”15.Gamesradar16.Screenrant“HowMuchCyberpunk2077CostTo

Make”BOSTONCONSULTINGGROUP9Exhibit6-HollywoodhascapturedtheriseofgamingIP–translatingthemintoblockbustersRecentvideogame-basedmovieshave

beenasuccess…WarcraftCastlevaniaResidentEvil:ExtinctionRampagePokémon:DetectivePikachuSonic

TheHedgehogBlizzardActivation.BlizzardNintendoSEGAEntertainmentKonamiNetflixCapcomUniversalSonyPicturesWarner

Bros.Warner

Bros.Paramount2016$439M201794%2017$312M2018$428M2019$433M2020$320MArcane:League

ofLegendsUnchartedSonic

TheHedgehog

2HaloThe

Lastof

UsMario

BrosMovieActivation.BlizzardNaughtyDogNintendoUniversalRiotGamesNetflixNaughtyDogSonyPicturesSEGAHBO

|

SonyPicturesParamountParamount2021100%2022$401M2022202270%202396%2023$1.3B$72M+openwkd.(121rank

alltime)1SplinterCellMinecraftAssassin’sCreedFalloutBethesda

GameStudiosUbisoftNetflixMojangUbisoftNetflixWarner

Bros.AmazonStudiosTBDTBDTBDTBD1Referstodomesticboxofficeopeningweekend.Note:For

alreadyreleasedcontent,

moviesqualifiedbyglobalboxofficereturnsandshowsbyrottentomatoesscoresSource:IMDb,

boxofficemojoandRottenTomatoesforreviews10GAME

CHANGER:

ACCELERATING

THE

MEDIA

INDUSTRY’S

MOST

DYNAMIC

SECTORFuture

oftheGaming

MarketHOnonehand,

gamingindustrygrowthcontinueswithwiderdemographicappeal.

Mobilegamingisnowattractingallages,

particularlyinWesternmarkets.

IntheUS,

gamesappealingto

GenXandBabyBoomers(45+),

makeupnearly25%oftopgrossinggamesin2021,

a6%increasefrom201917.

GenYwhogrewupwithcomputergamesareenteringtheir30s,

changingtheperceptionofgamingasjustfor

kids.

Theaverage

gamerage

isnow31yearsold18.owwillthegamingsectorchangemovingforward?Thereare

multipletechnological,

demographic,

andmediaindustrytrends,

manymentionedabove,

thatAudience

g

row

th

anddemogrwillcontinueto

play

majorroles.

Amongthose,

fourwilllikelyhave

thelargestimpact:•

Audience

growth

anddemogr•

Innovation

from

players•

M&AactivityOntheotherhand,children

andyouth

stillaccount

for

mostofthesector’s

audience

growth.

GenZ

isthefirstdemographiccohort

thatspends

asmuchtimegaming

aswatching

videocontent

[Exhibit7].As

eachchildaddsto

thegaming

market,theaudience

willcontinue

to

grow.

There

willbe

a

“tippingpoint”

where

gamingbecomes

thedominantform

of•

Newusecasesentertainment

interms

ofabsolute

numbers

andtimespent.17.Data.ai“2022GamingSpotlight:

MobileExtendsLeadOverPCandConsoleasGamingMarketHits$222Billion”18.NielsenGames

-U.S.

Report;

2021EssentialFacts

-ESABOSTONCONSULTINGGROUP11Exhibit7-Young

consumersnowplay

gamesnearlyasmuchastheywatchTVandmoviesGaming:

from

clearly

secondaryin2015…Minutesspentperday

onaverage18-12yearolds13-17yearolds150Far

behind150-36%-36%12712310050100508179352500TV

andGamingOnlineVideosTV

andmoviesGamingOnlineVideosmovies22…tofundamental

for

8-18yearoldsin201918-12yearolds13-17yearolds150Nearparity150-15%113-7%95961005088100505956-23%+11%+124%-11%+19%+69%00TV

andGamingOnlineVideosTV

andGamingOnlineVideosmovies2movies2