1、December 2022VIDEO GAMES WINTER UPDATEIts not all fun and games anymore!December 2022VIDEO GAMES WINTER UPDATEIts not all fun and games anymore!Ronald de GierSenior Vice PresidentRDeGierHL.comKevin LangAssociateKevin.LangHL.comRahul AminAnalystRahul.AminHL.comDhavan KhatriAnalystDKhatriHL.comExecuti

2、ve Summary2Houlihan Lokeys Video Games Coverage TeamJohn LambrosCo-Head of U.S.Technology GroupJohn.LambrosHL.comDaniel GosselsManaging DirectorDGosselsHL.comDurgesh PanchaniAssociateDurgesh.PanchaniHL.comAdrian ReedManaging DirectorAdrian.ReedHL.comAfter two years of extraordinary growth in 2020 an

3、d 2021(and a COVID-19 boom),the global video games industry is facing near-term headwinds.-Video game industry revenues are forecast to decline by 4.3%in 2022,marking the first decline in market history:The industry now faces a number of challenges:including a post-pandemic pull-back,privacy changes

4、(elimination of IDFA)making user acquisitions more challenging;an inflationary environment which is weighing on consumer discretionary spending;a tight market for game developers and supply chain disruptions.-The long-term outlook for industry remains positive:While industry growth is expected to sl

5、ow over the next few years(5%),market forecasts for 2023 are still well above pre-pandemic levels(only 2022 will be a corrective year).Video game industry growth will be driven by a variety of factors,including the proliferation of mobile games;expansion of more accessible models(such as free-to-pla

6、y and web3 games),high demand for games in developed markets(led by the US and China);and a significant shift in media consumption towards video games among younger generations.-The video game industry is very clearly a force to be reckoned with and has earned a prominent position within the broader