An Intro To The Current Gaming Landscape

The games industry continues to represent one of the largest and most accessible forms of global entertainment, with an estimated 3.3B gamers worldwide and $184B in revenue across mobile (49%), console (30%), and PC (21%) in 2023. Forecasts project a 2.5% CAGR in revenues from 2022 to 2026 and a 3% growth in the total number of players. 

Industry trends continue to point to a future where more people spend more time playing games. Supporting this is the fact that younger generations are increasingly pro-gaming. 90% of Gen Z are considered “game enthusiasts,” with 17% spending their free time playing games. Encouragingly, these figures increase to 94% and 21%, respectively, for the relatively younger Gen Alpha. A closer look reveals what types of games are capturing the majority of this upside. Free-to-play (F2P) multiplayer live services (also referred to as Games-as-a-Service) have been and are expected to continue to drive the majority of industry growth.

A recent report by Unity showed that over 60% of developers are already making multiplayer games, and, on average, mobile-only games (the largest market segment) that contain multiplayer features had >40% more monthly active users (MAU). Multiplayer game revenues also grew by 10% ($2.3B) year-on-year in 2023 and are expected to increase by a further 7% by the end of 2024. A part of the reason why multiplayer games attract more users and make more money is because they can thrive in theoretical perpetuity. More concurrent players generate quadratically more social interactions and in-game transactions, which is a driving force behind many F2P game economies.

This is the age of live service F2P “forever games.” The top ten games by average MAU in 2023 were all over seven years old (excluding on the Switch). Titles such as GTA 5, Minecraft, Roblox, Counter-Strike, and Fortnite are supplying players with near-endless hours of amusement both inside and outside of the virtual world. 

Leveraging a live service model has allowed some of these forever games to sustain players’ attention for a decade plus. The proliferation of mobile gaming has only served to increase distribution to consumers who would not typically have access to or be classified as gamers, and overall playtime has increased as we can now play games on the go.

However, in recent years, industry growth projections have had to be readjusted due to a slower than expected market recovery following the post-covid slump. Moreover, these stifled growth metrics saw 2023 as the year of the most gaming-related layoffs ever – a figure that was surpassed in the first half of 2024. 

Additionally, a recent survey shows that, in order to keep up with industry trends and consumer demands, 77% of developers report that the cost of game development is rising. Gamer’s attention is finite, and with 66% of developers believing that live service is necessary for long-term success and 95% stating they are either working on or intend to release a live service game, competition will continue to rise in what can sometimes look like a winner-takes-all arena.

We, therefore, find ourselves at an interesting intersection where the market for gamers is expanding at the same time that business growth is stagnating and execution risk is increasing. As content continues to trend toward live service forever games, industry leaders and would-be disruptors will need to innovate on business models, cost reduction, and distribution, and explore ways to deliver novel, fun experiences that last. 

In order to have a chance to compete with the industry giants, many developers are evaluating new technological integrations to help them deliver robust net-new experiences. Looking past solutions such as AI and cloud computing, this report will take a deep dive into scaling virtual worlds and what implications it has for this industry’s future.

The Road To Scale

As the scope of persistent multiplayer experiences expands, so too will the need for content. There has already been a notable improvement in procedural generation (procgen) and text-to-image AI tools, along with the continued iterative steps forward made to leading game engine technology. 

This has made scaling massive virtual worlds easier than ever before and democratized the ability for smaller teams to compete in the big leagues. However, more often than not, players are left feeling disappointed as AAA titles with 9-figure development budgets produce barren, empty lands that feel void of compelling content or dense multiplayer interactions. 

In order to maintain a consistent content treadmill that appeals to a customer base within a highly competitive market, a growing number of projects are turning to user-generated content (UGC). Pushing content creation over to the community with the help of low/no-code UGC tools, aligned incentives, and cryptographically efficient value distribution will play an increasingly important role in the live service of a growing number of multiplayer games like Fortnite/UEFN, ARK: Survival Ascended, Shrapnel, and Maplestory Universe. 

Not only will this help significantly scale the amount of content on offer, but it will also lighten the load and costs of operating a live service model. This will allow developers to focus on the core game design, large-level content updates, and bug fixes.

Additionally, advancements in LLMs and autonomous agents will drive innovation in immersive AI NPCs (non-player characters) and competitive bots. The days of vast, empty worlds will be long gone. Soon, they will be populated with thousands and eventually millions of players and AI agents, all adhering to complex and intractable simulation physics.

Rapid innovations in GPU hardware, cloud computing, pixel streaming, and graphical rendering solutions (Like Nvidia GeForce Now, Nvidia DLSS, Aethir, YOM, and Shaga) are already improving the performance, experience, and accessibility of hardware-intensive games across a wider range of devices. Further scaling the total addressable market across low-end mobile devices while also making games look and feel more immersive – a crucial component of any virtual simulation.

However, unlike graphical processing, which has seen a 10x increase in efficiency and output over the past decade (and will likely continue accelerating thanks to advancements in AI), CPU performance has been static for nearly 20 years. Built upon decades of bloated distributed compute systems, today’s backend computational architectures are inefficient.

In order to scale large content-rich virtual worlds for millions of concurrent players, intractable objects, and AI, the industry is in need of new solutions to old problems.

Hyperscale

Scale vs. Concurrency

It is important to add some more color on exactly what we mean by scale. 

Scale, in the context of total players within any given game or platform, has seen consistent growth over the last couple of decades. For example, Steam maintains an average daily peak of ~32M users online at the same time, a figure that has grown over 350% over the past ten years.

The content side paints a similar picture. The top game by the number of players on Steam (and one of the world’s leading forever games) is Counter-Strike. Counter-Strike was launched in 2012 and today has almost 1.5M players online at any given moment, an increase of ~1,400% compared to 10 years prior.

Virtual concerts like the Travis Scott Fortnite performance attract millions of views (>27M unique players and over 46M views) but host fewer players in the same instance than a typical 32 vs. 32 round of Battlefield. Although there were a reported 12.3M concurrent spectators at this event, in reality, these users were split between multiple servers. The actual number of concurrent users (CCUs) per instance was closer to 50, severely limiting the scale of artist-to-fan interactions.

It’s notable that despite the headlines, this was actually lower than previous performances by Marshmello and Star Wars, which were estimated at roughly 100 CCUs. The fundamental compute infrastructure constraints, when combined with an increase in the number of interactable objects and physics complexity, as seen in the Travis concert, quickly decrease the number of CCUs if a certain level of fidelity and density is to be maintained.

Aside from the total number of players, there is also scale in terms of world size. This measure of scale is more a product of some of the technical advancements previously mentioned, such as procgen. Specifically, this is what helped the team at Hello Games create No Man’s Sky, a sci-fi world that could be populated with as many as 18 quintillion different variations of planets.

However, as previously mentioned, this approach to scale often results in empty, barren environments that have a direct negative impact on the player experience. Ultimately, this approach requires a time- and cost-intensive post-launch live service pipeline to produce content continuously in order to keep players engaged.

In this report, we will refer to scale as how many concurrent players (CCUs) can co-exist at the same time within a single shared world (otherwise referred to as a shard, as defined by one of the earliest innovators in scaled virtual experiences, Ultima Online). Importantly, scale, in this sense, should not take precedence over the player experience. 

Therefore, scaled concurrency must exist in tandem with the 10 facets of scale: graphical fidelity, entity density, physics complexity, world size, player agency, real-time compute, consistency, latency, persistence, and cost (see Extras at the end of the report for more). Critically, scale must certainly not come at the cost of requiring an uneconomically outsized investment in developer time and resources. Only then can games reach hyperscale.

The challenge with concurrent scale is that it is generally complex and costly to maintain. It doesn’t take very long for games being built natively with Unity or Unreal Engine (UE) to hit very hard limits of scale. The typical maximum number of players in a single s