By Dr. Serkan Toto – On Japan's Game Industry



Game industry news site asked analysts (including myself) for predictions how we think about the gaming business in 2021.

Here is a repost from my contribution to their article:

Switch Pro launches

Yes, I know, I know. I predict a beefed-up 4K device is coming during Nintendo’s next financial year. And let it be said: “Switch” is just a word.

Nintendo marches on

Everybody expecting the Switch to run out of steam in 2021 is in for a bitter disappointment. The Switch will be the best-selling console this year as well, driven by more first-party games, a hardware refresh (see above), and the device having developed into a lifestyle product for the mass market over the course of 2020.

PS5 pulls ahead

Personally, I like the new Xbox but believe Sony’s PS5 will be significantly ahead at the end of 2021 in terms of both hardware and software sales globally. In Japan (where I am based), Sony is very likely to miss the PS4’s first-year sales numbers because of Nintendo’s continuing dominance in both companies’ home market.

More M&A to come

2020 was a big year for mergers and acquisitions in gaming despite the coronavirus situation, and consolidation will likely continue in 2021. There is room for at least one billion-dollar mega deal and several that are in the US$100-500 million band, with Take-Two, Sony, and Microsoft as the most likely buyers in my view.

Game stock price retreat

Driven by the pandemic, next-generation console launches and the stock market moving upwards overall, game stocks worldwide have been bubbling up to unprecedented highs in 2020. While I am sure that part of the new audience and increased engagement can be retained over the next years, gaming will eventually take a hit and share prices will see a correction in the first half of 2021.

App stores see structural changes

Monopoly, walled garden, high-tax marketplace: the accusations by many mobile game developers against how Apple in particular manages their App Store are harsh, and their voices are starting to get heard. I believe that Apple reducing app store fees for smaller studios is just a first reaction. Both Google and Apple are likely to be forced to make additional structural changes to their app stores in one way or the other in 2021.

About the author

Dr. Serkan Toto

I am the CEO & Founder of Tokyo-based Kantan Games Inc., an independent consultancy focused on Japan’s game industry.

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By Dr. Serkan Toto – On Japan's Game Industry