As the video game landscape continues to shift, industry leaders are re-evaluating what it takes to grow and compete in a space defined by rapid innovation and global scale. At GamesBeat Summit 2025, Gina Joseph, CEO of GamesBeat, welcomed Chris Hewish, chief strategy officer at Xsolla, and Anthony Bartolacci, chief strategy officer at Sensor Tower, to explore the key forces shaping this past year — and what trends are set to define the year ahead.
Direct-to-consumer is gaining traction
“Obviously the elephant in the room is the Epic vs. Apple development from a couple of weeks ago,” Hewish said, “but I think that’s just part of the broader narrative around direct-to-consumer, which has been an ongoing, building trend for the entire industry. We have seen companies who really embrace direct-to-consumer models are seeing a lot of success.”
Expanding beyond the platforms doesn’t just mean margin improvement — it also offers revenue growth, by developing a direct relationship with players with techniques like behavioral pricing, regional pricing, live ops, limited-time offers and more.
“Once you get outside of the app stores, you can really grow your business,” he said. “We’re seeing, on average, people that expand beyond the app store growing 14-16% additional revenue on top of what they’re already making, because they’re able to maximize that value with their players.”
But though there is clearly major buzz around the potential of direct-to-consumer monetization, the traditional app stores still remain an essential part of a game’s monetization strategy, Bartolacci said.
“In 2024 we saw 4% growth year-over-year in in-app purchase revenue, eclipsing the $80 billion mark,” he said. “What’s even more exciting about that is there were significant headwinds in Asia. If you just look at the U.S. and Latin America and Europe, most of those markets were up double digits in terms of revenue. With the success that games are finding with Apple and Google, as well as some of the opportunities in direct-to-consumer, there’s going to be a lot of decision-making that needs to be done as to what is the better approach.”
Apple and Google are trusted names, offering a volume of potential customers, discoverability, a frictionless experience, and an emphasis on privacy. But owning the relationship with the customer, as well as the larger profit margin of the direct-to-consumer model means finding a balance between the two approaches.
Hewish agreed, saying “This whole model is not an either-or; it’s not about leaving the platforms to go direct-to-consumer. It’s about expanding your business to embrace both.”
Competing with legacy games
The share of revenue coming from “legacy games,” or titles that have been in the market for more than six years, is now eclipsing 50% of in-app purchase revenue, for a few reasons. First, these are the games that are keeping players engaged with live ops, new competitions, new modes, and new experiences.
They also create a good deal of competition for new game launches, which grow more frequent as advancements in AI allow smaller teams to launch bigger games, making the market more complex than ever. To be successful, developers need to understand how games find an audience, how they grow that audience, and how they compete with some of the entrenched studios.
“Companies who embrace building the relationship with their audience, with their players, creating an interconnected ecosystem beyond just any single platform, but being able to bring the entire experience together and raise the value proposition for their players — there’s a lot of additional revenue opportunities there, whether you’re small or big,” Hewish says. “The data shows that it really does create a lift in regards to your business.”
Untapped opportunities are growing
Emerging markets like Africa and the Middle East are increasingly fertile grounds for growing games. The populations are young, digital-savvy and often mobile-first.
“In Africa, I believe we’re looking at maybe $14 billion this year in projected revenue, $16-17 billion in the Middle East — this whole region is ripe for opportunity, not just from a consumer standpoint, but also from a developer standpoint,” Hewish said. “Funding is coming through those areas. The markets are really good for growth.”
Apple and Google growth figures showed double-digit growth in Latin America, double-digit growth in Europe, almost 20% growth in the Middle East. Even in Asia, where there are some headwinds, there are opportunities for western developers to make content that resonates with some of those huge markets.
“What’s really important, though, is that developers enter those markets with a respect and an understanding of what resonates with those consumers,” Bartolacci said. “There are tons of opportunities in these regions, but I don’t think you can just take a game that’s successful in the west and put it there. There has to be some acknowledgement that these markets are different. The genres that are successful in those markets are different. The consumers expect to have content that is going to resonate with them.”
How AI will impact game development
Though obviously there are a lot of mixed feelings about AI, the technology presents a lot of opportunity. Once we’re fully past the initial hype phase, in regard to the business uses of AI, consumer expectations will come back into play, Hewish says.
“It’s not about reducing teams or reducing the size of your company,” Hewish said. “It’s about being able to create something bigger, deeper, more engaging. I’m pretty bullish on it. I think also, AI can help not just in producing content, but when we talk about direct-to-consumer, getting outside of platforms, discoverability becomes the next big frontier — AI could really help with that.”
Bartolacci agreed, noting that AI has the potential to level the playing field a bit. For instance, it makes marketing a lot more doable for smaller teams, and serves up the opportunity to target gamers at a much more micro level, where they get the right offers and see the right advertisements, at the right times. And the advantage that offers will only exist for a short while, as AI becomes more ubiquitous.
“Everybody is going to be using similar tools to find the same players. The monetization opportunities might be consistent across the board,” he said. “What’s going to be different from game to game is the quality of the game, the immersiveness of the experience, the ability for consumers to engage with that content across different modalities.”
Ensuring growth now and going forward
Today, developers need to keep in the front of their minds the fact that games are bona fide hobbies for their players, Hewish said, similar to golf or bicycling or any other hobby people take seriously. And as part of that, it occupies a larger space and a variety of facets in their lives. Passionate Pokémon Go players don’t only play their game daily, they also attend festivals and connect with other fans.
“It shifts your mindset a bit on how you engage with those consumers,” he explained. “The idea that someone might spend thousands of dollars a year on their hobby, on games, it shifts when you think of it through that lens. As part of that, it gets to that idea of a full ecosystem that you’re connecting together when you go direct to your players, direct to your consumers. That’s the real growth opportunity as we go forward with games.”