Introduction
2026 set to be a turning point for the industry. Video gaming global revenues approached US$200 billion last year and are expected to exceed US$250 billion by 2028. Growth is driven by mobile gaming, and cloud‑based streaming and subscription services that reduce reliance on expensive hardware and make large catalogues of games – including AAA titles – more accessible. This is expanding the player base dramatically particularly in Southeast Asia and the Middle East and Africa. Industry layoffs in North America and Europe between 2023 and 2025 have created a sizable pool of experienced, lower‑cost talent, encouraging new studio formation and early‑stage investment. VC deal activity is also strong in Asia, especially for blockchain‑based games and immersive digital platforms. Middle Eastern sovereign wealth funds (particularly from Saudi Arabia and the UAE) are injecting substantial long‑term capital into publishers, infrastructure, and esports, driving consolidation. Private capital firms are becoming significantly more active globally, and M&A activity is set to increase as companies buy technology, IP, and improve cost efficiencies.
New business models evolving rapidly. Subscription services and cross‑platform ecosystems are reducing one‑time purchases. As the lines between console, PC, and mobile gaming blur, new opportunities to monetise content across multiple platforms emerge. Meanwhile, regulatory scrutiny of loot boxes and manipulative design is pushing publishers to reassess the consumer impact of monetisation strategies. Video gamers, social world users and virtual events viewers alike increasingly expect personalised experiences, social discovery features, cross‑progression between platforms and devices, and regular live updates. To stay competitive, studios and platform operators must balance innovation with responsible design, building sustainable revenue models that deepen long‑term user trust and engagement.
Technology driving changes but introducing legal and reputational risk. Generative AI is increasingly being adopted as a development tool for creating concept art, in-game assets and voice lines, with some studios exploring more complex applications for automatic world-building and more dynamic non-player characters (NPCs). However, consumer backlash (e.g. over Gen AI undermining artists’ authorship and livelihoods) poses serious reputational risks: some studios have had to publicly commit against using Gen AI, whilst others have faced disqualification from industry awards for their use of it. Meanwhile, AR, VR, and mixed‑reality experiences are also expanding, and virtual environments continue to mature. While these technologies unlock new revenue streams, they also create legal risks e.g. around consumer protection, IP ownership and data privacy. User‑generated content is also an increasing feature of modern gaming and social worlds. User‑created maps, mods, and skins help sustain engagement – and extend a game’s lifecycle – but they also create challenges around copyright, online safety, data security and platform liability for unlawful or harmful material.
Regulation tightening worldwide. As gaming ecosystems grow into complex digital marketplaces, regulators are examining the market power of major platforms, reshaping operational and compliance models. New online‑safety laws introduce stronger duties of care, age‑verification requirements, and transparency obligations, backed by significant penalties. Child‑safety and consumer protection are converging with data‑protection requirements: emphasising data minimisation, clear explanations of data use, and robust technical safeguards. These developments intersect with broader themes including AI governance, platform oversight, monetisation ethics, and evolving content‑regulation rules.
Escalating litigation risk. Many games now operate as complex digital platforms with allegations that they collect extensive user data, use behaviour‑influencing design, and facilitate real‑money transactions involving children. This has led to rising claims over “addictive design” unfair monetisation, data breaches, and privacy issues. AI‑generated and user‑generated content creates new disputes over ownership and copyright, while metaverse‑style virtual worlds introduce risks around online safety, digital‑asset trading and fraud. As expectations for transparency, safety, and accountability grow, gaming companies face greater scrutiny from regulators and consumers alike.
For further information, please contact:
Alex Roberts, Partner, Linklaters
alex.roberts@linklaters.com
