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Video Games

April 08, 2024

After seeing how much my youngest daughter enjoyed playing Mario Kart on his Nintendo Switch, my brother-in-law gave her one for Christmas. Her new favorite movie is Super Mario Brothers. She has now progressed to more movie-esque adventure games (she and my wife just finished Luigi’s Mansion).  She’s 4.

I can’t help but compare her experience with mine. I used to love Tetris and how it was like assembling a puzzle. I was elated when I finally beat Sonic the Hedgehog. Of course I didn’t have access to the newest games. Video game consoles and game cartidges were out of reach to a kid growing in rural Portugal. Nowadays, games are not confined to high performance game consoles. Simple games (like Candy Crush), can easily be accessed via mobile phone for free, and developers can have a very lucrative business with ad-supported games and in-app purchases. Gaming consoles and special gaming computers exist, but new subscription models mean that the newest games by a publisher can be accessed for $18/month (like Ubisoft+), instead of at a dizzying $60 a piece. The increased accessibility and engagement (play with your friends, form teams, incredible graphics and story-telling) make it no wonder that the video gaming industry is expected to steadily increase in the coming years (see chart below).

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As mentioned previously, for gaming enthusiasts, new game access and pricing options allow for broader access to game titles. For game developers, revenue becomes recurring, as opposed to the one-and-done  perpetual licensing of a bygone era. This means profits can be funneled to creating even more stunning games, and shared with shareholders.

While I personally have long ago given up my gaming controllers, we’ve been following the gaming sector for some time at Somar and will continue to do so. After all, Generation Alpha is a generation of gamers, and the oldest among them are only 14. There is undoubtedly much growth ahead.

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