Attention
You have Cookie disabled in your browser. Displaying the site will be incorrect!
en ru de
Back to blog

What difficulties will game companies face when expanding internationally?

What difficulties will game companies face when expanding internationally?

We’re continuing to publish the results of the research “World Video Games Industry 2020–2023: Trends, Technologies, Challenges” conducted by G-Core Labs and the Censuswide British research agency.

The first article focused on promising technologies demanded by the game development industry.

In the second article, we take a closer look at the problems of the gaming industry in world markets, technological challenges, growth factors, game formats, genres, and the most promising monetization models.

How has the pandemic affected plans for international expansion?

The coronavirus pandemic and the associated self-isolation policies introduced last spring in many countries around the world have had a significant impact on the video game market. Limited in the ability to enjoy the usual forms of communication and leisure, people of almost all ages began to spend more time online than before, whether it was to work, shop, “meet” with friends, or, of course, play games online only.

As a result, 84 % of the surveyed game companies said that they experienced increased loads on their IT infrastructure in March–May of this year during the peak of quarantine measures. At the same time, 69 % of respondents noted that the load increased from 51 % to 100 %, while another 17 % of companies recorded an increase in load from 101 % to 200 %.

According to many respondents, the trend of further migration of leisure and entertainment online will continue, and the pandemic has acted as a catalyst for this process. In connection with this, 78 % of respondents said they plan to enter new markets (countries or regions).

What difficulties will game companies face when expanding internationally?

The respondents identified Western Europe (46 %), Central Asia (46 %), and India (38 %) as the main areas of international expansion. The regions of North America (28 %) and Southeast Asia, including China, (28 %) are also in demand.

What difficulties will game companies face when expanding internationally?

New market technological challenges

At the same time, new markets mean new challenges. Among the main issues that had to be solved while developing business in foreign regions, representatives of game companies noted the growth of DDoS attacks on IT infrastructure (46 % of respondents), issues with Internet connectivity and bandwidth in the local market (38 %), and lack of qualified engineers (38 %).

What difficulties will game companies face when expanding internationally?

Vice President of Products at G-Core Labs

Dmitry Samoshkin

“G-Core Labs is well acquainted with each of these issues. We started as a cloud infrastructure operator specifically for the gaming market and the media industry, so we fully understand the challenges that many of our customers from these sectors faced when they were entering new markets, including North and South America, Asia, India, the Middle East, and Australia. From our own experience, we can say that most of the problems mentioned in the study, including Internet connectivity, the availability of stable IP transit, reliable data centers, and, especially, the difficulties caused by DDoS attacks, are best solved centrally by choosing a high-quality cloud partner who provides reliable hosting with 24/7 support, a content delivery network, storage, and protection of the entire infrastructure from any DDoS attacks, even the most complex and voluminous ones. Over the years, G-Core Labs, in my opinion, has managed to form a pool of high-quality products and services for efficient and uninterrupted operation in any region of the world”

Vice President of Products at G-Core Labs

Dmitry Samoshkin

The most problematic markets from a technical standpoint, according to the companies surveyed, are India (38 %) and Southeast Asia, including China (32 %). Also, respondents experienced technical issues in North America (24 %), Western Europe (22 %), and the Middle East (22 %). Only 4 % of respondents didn’t encounter any technical issues in new markets.

What difficulties will game companies face when expanding internationally?

What will help and impede growth in 2020–2023?

Among the factors that could slow down business development in the next 3 years, the respondents most frequently noted cyberattacks, including DDoS attacks (66 %), changing user preferences (66 %), and an increasing number of competing products and companies, resulting in an oversaturated market (64 %). Technical limitations of communication networks and the Internet in the regions of presence were also mentioned (34 %).

What difficulties will game companies face when expanding internationally?

CEO of G-Core Labs

Andre Reitenbach

“According to the gaming industry, one of the main technical challenges that can significantly affect a business is unfair competition in the form of DDoS attacks, which are, unfortunately, very common in the field of video games. Issues with Internet connectivity in target regions is another challenge. G-Core Labs is highly experienced at solving such issues. For example, we helped support the entry of RedFox Games, a popular American game developer (Black Desert, RF Online, and Rumble Fighter), into the South American market.

For foreign companies, LATAM is a difficult market to enter. Its infrastructure is underdeveloped, and the connections between providers are poor, which is very typical for emerging markets. We faced similar problems when we were building the infrastructure for World of Tanks in Russia. That’s why when RedFox Games contacted us, we already knew where to start. The RedFox Games hosting cluster was set up in an optimal location—Miami. That point is located at the junction of IX and is as close to Latin America as possible. During the first tests, traffic did not flow directly, which increased the delay significantly, sometimes until it was completely “lost”. In order to set up the optimal route, we even obtained an Internet service provider license, contacted all the major providers, and made agreements that ensured our traffic would go the shortest route possible. But that was not the end of the problems. Before RedFox Games appeared on the LATAM market, there were pirated services with the Black Desert game. And when the project was in Closed Beta, DDoS attacks began against the legal publisher. During the first two weeks, we faced numerous attacks of various types, some of which reached 300 Gbps at their peak. Thanks to the high-end equipment based on Kinetic and using local scrubbing centers, G-Core Labs successfully repelled all unfriendly actions”

CEO of G-Core Labs

Andre Reitenbach

The respondents named the following as the main technological factors for the growth of the video game industry: (1) cloud gaming, which involves using external servers for all processes while users receive only video streams to their devices, and (2) VR/AR. 82 % and 66 % of respondents said they already use the aforementioned technologies or they plan to use them, respectively. Multi-platform and console games were also named as growth drivers.

What game genres and formats have potential?

4 out of 5 (78 %) respondents said that they were developing mobile games. 70 % of respondents are working on console and PC projects. 60 % of study participants were releasing browser games.

What difficulties will game companies face when expanding internationally?

The most often developed game genres among the responding companies were RPGs and adventures (74 %), shooters and fighting (64 %), and strategy (60 %).

What difficulties will game companies face when expanding internationally?

What monetization models are the most popular?

The most popular monetization models among the gaming industry are (1) in-game purchases (characters, items, etc.), (2) subscription, and (3) in-game ads. The use of these methods was reported by 74 %, 60 %, and 52 % of the companies surveyed, respectively.

What difficulties will game companies face when expanding internationally?

To read the full research results for free, please provide your name and email address.

Subscribe to a useful newsletter

Favorable offers and important news once a month. No spam