Game studios show resilience amid shifting market | Unity

Even with tightened budgets, studios are still experimenting, investing and taking calculated risks to maximize efficiencies and resources. They are focused on key opportunity areas including: boosting productivity with AI tools, maximizing revenue with diverse ad strategies, and doubling down on multiplayer and multiplatform games to reach as many players as possible and keep them playing longer.

The report draws insights from over five million Unity Engine developers and more than 342 billion ad views, offering a comprehensive analysis of the industry’s trends and developments. The analysis also integrates insights from polls, surveys, and Unity’s broad community of industry veterans, studio partners, and in-house experts to enable better strategic planning for studios.

The 2024 Unity Gaming Report reveals that amidst persistent economic uncertainty, studios are simultaneously prioritizing conservative spending and being bold – they are stretching resources and willing to take on some risk, in order to strengthen their businesses and shore up ROI.

Multiplatform and multiplayer development

Despite added complexity and costs, an increasing number of studios are investing in multiplatform and multiplayer development to broaden their reach and enhance player engagement.

Since 2021, the number of multiplatform games has surged by 40%, with even small studios embracing multiplatform release strategies. Moreover, multiplayer gaming revenue witnessed a notable growth of 10% ($2.3 billion) in 2023, indicating the enduring popularity of multiplayer experiences among players.

“We’re seeing way more multiplayer, multiplatform releases,” said Whitten. “That really started with the big studios aiming at all the platforms or more platforms. Over the last year, it just feels like even indies and smaller game studios are targeting more platforms.”

He noted that the number of platforms available for games is going up, and that is also prompting some of the spread to multiplatform gaming.

Another trend is that there are more games with live operations, or frequently updated games with events that are aimed at drawing people back in or to motivate them to subscribe to battle passes.

“Developers are trying to make sure that their game is where players are, and they’re trying to make sure that there are really interesting things for them to do when they get there,” Whitten said.

Diverse monetization strategies

Studios are sustaining revenue and driving engagement through diverse monetization approaches, with revenue from in-app advertising (IAA) rising by 26.7% year over year.

Games utilizing both rewarded videos and offer walls have experienced a significant increase in Day 7 and Day 30 retention rates, underscoring the effectiveness of varied ad strategies in enhancing player retention and monetization. That means players stick with games that use such techniques.

“It was a tough year for gaming. And so it was interesting to see how game developers are a pretty nimble bunch. There was a lot of movement around how they’re thinking about in-app ads versus in-app purchases. And, frankly, they have the resilience to try to balance the business model,” he said. “And especially in this funding environment, I suspect a lot of that will continue.”

AI adoption

AI is playing a pivotal role in boosting productivity and efficiency for game developers, with 62% of studios incorporating AI tools into their workflows, particularly for content creation and animation.

“[Developers] are using a lot of AI and starting to really look at how to adopt it into their workflows and use it to try to build more productivity and more opportunities to iterate in gaming,” Whitten said. “It was interesting to see how big the uptake in AI tooling was starting to get with a bunch of game studios.”

The majority of developers leveraging AI have reported improvements in delivery and operations, highlighting the transformative impact of AI technologies on game development processes.

“Our job at Unity is to empower developers with the tools and solutions to tackle the challenges of game development,” Whitten said. “Whether it’s improving performance, iteration speed, or multiplatform development, we are focused on delivering the most value we can to our developer community.”

In any industry, starting with code writing, everybody is starting to adopt AI, whether it’s ChatGPT or Copilot, or what we do with Unity in terms of like how to use AI to just help accelerate code development, Whitten said.

Clearly, on the art side, there’s more and more use of it to increase productivity and increase variation. But also, in areas like live ops, we’re seeing a lot of use of AI. He said Unity has launched its own tech for detecting voice toxicity, as do other companies.

“AI is probably the largest emergent trend that’s going to shift how games are made and how they’re played,” Whitten added. “It’s one of the reasons we’ve been so focused on both the creation side tools and the inference at runtime. We’re just seeing a constant level of evaluation of new tools, whether it’s for NPC behaviors, or working through animations, or traditional dev tooling. Those things are accelerating at a really rapid pace.”

Unity 6

Unity also showcased several technical advancements and achievements during GDC, including the upcoming launch of Unity 6, enhancements to Unity Muse, the release of Megacity Metro, and innovations in monetization solutions such as Daily Rewards and expanded bidding options for Unity Ads. Unity 6 is the latest version of the game engine, which was first announced in the fall and will debut in preview form in May.

With Unity 6, developers will be able to power larger complex scenes, develop multiplatform games directly in the Editor and create dynamic AI and XR experiences, all with improved speed and runtime performance.

“We’re doing a lot of [talking] around the roadmap and also getting into people’s hands the latest version of Unity 6 so they can try it out,” he said.

The company also has done a lot of work on its Mega City Metro demo, which is now focused on multiplayer services and multiplayer inside of Unity.

“We’re going deep on a roadmap into a bunch of features inside of Unity 6,” he said.

The company will also reinforce its earlier launch of the Apple Vision Pro game development tools. And Whitten believes there will be a lot more production of games for the web, and Unity is throwing its support behind that.

In contrast to Epic Games, Unity doesn’t have an actual press event where it will announce these things. Instead, it will stage lots of meetings at both GDC and at its San Francisco headquarters.

As the gaming industry continues to evolve, Unity remains at the forefront of innovation, supporting developers in creating immersive and engaging experiences for players worldwide.

Unity Muse, Unity’s AI-powered platform for accelerating real-time 3D and game development, is now fully integrated in the Editor, allowing developers to bring AI directly to where they work. Additionally,
improvements have been to the generative models and outputs, Animate and Behavior are now available
to all users, and AI-generated sound effects will be a new feature available to subscribers soon. Muse is in
early access and is available for a free trial. Learn more about Muse here.

And Megacity Metro, the latest multiplayer sample project from Unity, is now available for download. Powered by Unity’s Data Oriented Tech Stack (DOTS) and Unity Cloud’s multiplayer gaming services, Megacity Metro showcases performant gameplay and the expanded capabilities of our latest tech to deliver accelerated multiplayer creation and scale. Learn more about Megacity Metro here.

Unity recently announced Daily Rewards, a new and unique offering for advertisers on Unity’s offerall
product Tapjoy. Daily Rewards gives players rewards for every task they complete in an app, encouraging
users to return each day to earn more rewards as they progress. Additionally, Unity also recently
announced that Unity Ads and ironSource Ads will soon be available as bidders on AdMob mediation
platform and Google Ad Manager (GAM).

And on the GDC show floor, Unity will feature a Creator Lounge, spotlighting ten games including first hands-on with Radical Forge’s recently announced Southfield, and first hands on with an updated version of Angry Birds VR: Isle of Pigs.

As for Web3 and the metaverse, Whitten said those trends are not dead, though they have gone through a hype ccycle and are now more focused on reality.

“There are obviously lots of people that are doing interesting work in the [metaverse and on Web3],” he said. “For any new piece of technology, gaming is on the tip of the spear to discover interesting use cases.”

As for the success of games like Helldivers 2 and Palworld, Whitten said those games are good examples of creating a really deep community, with a focus on multiplayer gaming and live operations. They show what can be done with really small teams. While those games got overwhelmed by demand, Whitten said he believes they are doing an excellent job dealing with the surprise success of their games.

As for Unity’s ill-fated price increase last fall, Whitten said the company is listening and communicating more effectively with creators and the big lesson is the company should surprise people. The goal is to continue to deliver on the things game developers care about, Whitten said.