Reflecting on the Past to Predict the Future: 2023 Looks Set to Follow a Familiar Pattern

As the year draws to a close, it's an opportune moment to assess our current position and broaden our perspective beyond the usual daily and weekly rush. In most years, when writing the final column, I reflect on the previous year's closing piece. Sometimes, this exercise reveals rapid change, while other times, it highlights the lack of progress on key issues. With the tradition of making predictions for the upcoming year, there's often a side of humility to acknowledge. The final article of the previous year predicted unionisation would be a major story in 2022, and although it may not have entirely lived up to expectations, the issue remains relevant in the industry. Progress has been slow, but the momentum behind the movement persists, and it's not unique to the games business, as workers in the broader tech industry begin to see the benefits of organised labour. Looking back at the stories that preoccupied us in December 2021, there's a sense of familiarity, with ongoing console hardware shortages, questions about Sony's commitment to its VR platform, and companies exploring 'the Metaverse' without clear definitions. Despite the familiarity of these stories, 2022 had its share of surprises, including the proposed acquisition of Activision Blizzard by Microsoft, a nearly $70 billion deal that could reshape the industry's commercial landscape. Although the deal has not yet been completed, it will likely remain one of the biggest ongoing stories in 2023 and 2024. Microsoft had hoped to finalise the deal by June, but it now faces a serious legal challenge in the USA and potentially in the UK and Europe. The most likely scenario is that the deal will proceed, but with concessions, and Microsoft's recent promise to keep Call of Duty on Nintendo and Steam platforms for a decade may be just the beginning of the negotiations. The US FTC's concerns about the acquisition of Zenimax suggest they will take a hard line, and the courts may not side with their viewpoint, but this is likely a preview of how the UK and EU will approach the deal. This process will stretch out the timeline dramatically, with the US challenge not getting a court hearing until August, and it's unlikely the deal will be concluded until well into 2024. The legal restrictions on pre-deal coordination mean that the actual integration of the businesses won't start until 2024, and successfully incorporating a $70 billion publisher into the existing Xbox structure will take significant time. If the Microsoft acquisition dominates the coming year, Sony and Nintendo are likely to focus on hardware. Sony's PSVR2 is its most high-profile launch, and it will be closely watched to see the company's commitment to the VR platform. The launch line-up looks solid, and the promise of improved visual fidelity and easier setup could make it more attractive to the mass market. Sony is also likely to see supply chain issues for the PS5 gradually resolve in 2023, and a return to supply chain normality may allow Nintendo to finally release a full-blooded update to the Switch hardware. The company has seemingly been waiting for the right moment to launch an updated model, and from what can be gathered, the reports of new hardware have been correct, but Nintendo has been pushing back its update schedule until the supply chain stars align. Another topic that will continue to be discussed in 2023 is the loot box discourse and the regulatory investigations into this business model around the world. Legislative wheels grind slowly, and with many countries interested in this issue, there will be no quick resolution. However, it's possible that the story will become less relevant over time as companies choose to avoid this monetisation path due to the steady flow of news about regulation in various markets. Finally, a wildcard prediction for 2023 is that another major company will launch a serious rival to Game Pass, with Amazon, Valve, and Epic being potential candidates. It's unlikely that every major tech and entertainment company will allow Microsoft to dominate the game subscription market, and memories of Valve capitalising on the slow pace of traditional publishers moving to digital distribution are still fresh. As ever, the January bombshell that renders all predictions outdated and irrelevant is always a possibility, and until then, a peaceful and happy holiday season is wished to all.