Minicast: The democratisation of gaming

The gaming industry is dominated by a few large players who have significant market power, and control the development and distribution of games.

However, the industry is experiencing a democratisation, where smaller players are breaking out and promoting competition and diversity of gaming, according to Clayton Larcombe, chief investment officer at boutique investment firm PAC Capital.

According to Larcombe, while the gaming industry is largely controlled by a few big players like Sony, Microsoft, Nintendo, and Activision Blizzard, he stated that individuals are increasingly setting up their own studios, leading to greater competition and diversity in the sector.

"The big game developers now are pretty much refreshing their games that they have now. So what's happened now is you've had these sort of indie studios or these people starting their individual titles or brands," he said.

"Australia's starting to have a bit of a presence in the media about that, which is great to see."

Larcombe cited the example of CD Projekt Red, an independent studio that has won several awards for its games, and Wild Flowers, a Melbourne-based studio that won the Apple Arcade Game of the Year award in 2022. These small indie studios are breaking out and gaining recognition, and Larcombe believes this trend is only going to continue.

He also noted that this trend is creating opportunities for investment in the gaming industry, where creativity is largely being driven by smaller studios.

The democratisation of gaming has led to more competition and diversity in the sector as the big players refresh their games, smaller studios are developing new content and making a name for themselves.

This presents an opportunity for investors to back the smaller players and give them the chance to grow.

This trend is likely to continue, providing opportunities for both gamers and investors said Larcombe.