Perspectives - Embracing Change (Spring 2024)

Section 3: Interactive digital media at a crossroads

Taking the video game industry’s vitals

End of the frenzy and new opportunities in sight

By: Florence Girot
Senior Manager, Foresight & Innovation, Canada Media Fund

The video game industry has suffered one round of layoffs after another for months on end.

According to one Canadian research group, 10,500 video game-industry employees were laid off worldwide in 2023, with close to another 6,000 January 2024 1. In tandem with this trend, game release cancellations, mergers and acquisitions, and the impact of inflation on production costs have created speculation about the economic health of the sector, which contributed $5.5B to the Canadian economy in 2021, according to the Entertainment Software Association of Canada (ESAC) 2.

What is the state of play in an industry that PricewaterhouseCoopers (PwC) 3 predicted would grow by nearly 40 per cent by 2027, and with worldwide revenues projected to increase from US$227B to US$312B?

The sector is certainly undergoing a rebalancing act, not unlike the audiovisual industry. After a frenetic pace of new releases to meet a surging demand for entertainment during the pandemic—14,500 new games were released on Steam in 2023, compared to 8,100 in 2019 4 —the industry is currently focusing more on profits than on growth.

Industry stakeholders believe that the market will stabilize at a less frenzied release pace, and with Nintendo’s next console arriving in March, 2025. Growth is poised to continue but at a slower rate than in recent years.

And despite that more than 40 positions were eliminated at Vancouver-based Blackbird Interactive in August, 5 and nearly 100 job cuts came down at Ubisoft Montreal in November 6 among other cuts, the video game industry is “at the highest level of employment ever, including during the pandemic,” according to Jayson Hilchie, president and CEO of the Entertainment Software Association of Canada (ESAC) 7.

Perspectives on 2024

The good news is that Canadians are huge fans of video games: 61 per cent of 18- to 64-year-olds are gamers 8. According to Global Web Index (GWI), 29.5 per cent play every day, and 18.8 per cent play two to three times a week (chart 3.1).

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Francophone 16- to 24-year-olds are at their consoles for 95 minutes a day—slightly more than their Anglophone counterparts, who clock in at 89 minutes (chart 3.2). While console ownership remains high, online gaming is the preference of 70 per cent of players 9.

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With 70 per cent of Canadian gamers accessing games online and cloud gaming opportunities forthcoming, the ‘attention economy’ principles may continue to penetrate the video game industry. These principles consist of keeping players engaged and immersed in games for extended periods to leverage their attention. The longer you can hold players’ attention, the more profits you can generate. Already present in the free-to-play gaming model through ad monetization, the trend is likely to amplify in the coming years.

While still in early stages, cloud gaming holds tremendous potential for studios. The online platformization of the industry will not only create access to emerging markets in Southeast Asia and Africa, but will also allow studios to monetize their intellectual property and sustain the attention of gamers more effectively, as detailed in the next chapter.

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  1. “The video game industry is booming. Why are there so many layoffs?” (The Conversation, February 11, 2024).
  2. “Impact of the Canadian Video Game Industry” (The Entertainment Software Association of Canada).
  3. “Perspectives from the Global Entertainment & Media Outlook 2023–2027: Resetting expectations, refocusing inward and recharging growth” (PWC, June 21, 2023).
  4. “Steam Game Release Summary by Year” (SteamDB).
  5. “’Another really crappy day’: Vancouver video game studio hit with layoffs” (Daily Hive, August 30, 2023).
  1. “Ubisoft cuts 98 workers across Canadian offices” (Polygon, November 7, 2023).
  2. “Hundreds laid off in Canadian video game industry” (CBC, January 12, 2024).
  3. “Video Game Industry Statistics In Canada” (Made in CA, March 13, 2024).
  4. “Video Game Industry Statistics In Canada” (Made in CA, March 13, 2024).

Streamers conquer the gaming industry

Gaming as a new horizon for streamers’ expansion

By: Corinne Darche
Coordinator, Foresight & Innovation, Canada Media Fund

In the past decade, gamers have shifted from physical to digital ownership of their libraries, especially in markets where physical games are too expensive to justify the cost 1.

Like streaming services, cloud gaming platforms allow players to access a library of content hosted on a remote server. Many major tech companies have launched their own—Microsoft with Game Pass, Sony with PlayStation Plus, and Amazon with Luna, to name but three.

While cloud gaming hasn’t fully penetrated the Canadian market, it is gaining traction. According to data from Global Web Index (GWI), for example, consumer use among Canadian gamers of Sony’s PlayStation Plus grew from 7 per cent to 11 per cent between 2020 and 2023 (see chart 3.4).

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The cloud gaming model has caught the interest of streaming platforms. Exploring ways of increasing revenue without sacrificing their existing subscriber base, streamers aim to keep audiences in one place for all their entertainment needs, and to decrease churn. With the gaming market expected to reach up to 5.8 million Canadians by 2027 2, video games are an obvious opportunity for these platforms.

Netflix has committed to its gaming expansion since 2021, offering a catalogue of free-to-play mobile games for subscribers with no ads or in-game purchases and even testing the use of smartphones as video game controllers 3. The Netflix Games catalogue is a mix of original and licensed materials, with roughly 25 per cent of games based on existing Netflix TV and films intellectual property (IP) 4.

At launch, Netflix Games did not resonate with subscribers. Despite its game library tripling in size since 2022, daily average users peaked globally at 2.7 million in January 2023. In other words: less than 1 per cent of Netflix’s global subscriber base plays games daily 5.

But the streaming giant seems determined to improve those numbers: This past December, Netflix Games added Grand Theft Auto: The Trilogy – The Definitive Edition to its library, and monthly downloads nearly tripled compared to November 2023 6. These numbers demonstrate that, with the right offerings, the service can attract more players.

Other streamers and user generated content (UCG) platforms are following suit. YouTube launched Playables for premium members in November 2023, with a library of 37 games 7. After hinting at adding games to Disney+, Disney acquired a US$1.5B billion equity stake in Epic Games—the creator of Fortnite8 a collaboration deal on games and Disney IP integration. It has not been confirmed if the resulting games from this partnership will be available on Disney+; nevertheless, this collaboration will be one to monitor going forward.

Ultimately, streamers are fighting for full control over the TV screen, and cloud gaming may be their next strategy. But what’s the interest in keeping subscribers this hooked? Based on Netflix’s proposed monetization strategies for Netflix Games, this may be a question of boosting ad revenues 9. If industry players are focused on profitability going forward (see Section 1), a new expansion like this offers a new way to advertise to audiences. Only time will tell how this will impact their overall ad revenue.


  1. “Subscription services are changing our relationship to gaming” (The Verge, February 29, 2024).
  2. “Video Games – Canada” (Statista).
  3. ”Netflix Gaming Beta Expands to Mac, TV and PCs in Canada” (iPhone in Canada, August 14, 2023).
  4. “The Amp Podcast: Netflix’s gaming strategy, and analysing investment trends in the sports and gaming industry” (Ampere Analysis, December 7, 2023).
  5. “Netflix aims to ‘crawl, walk, run’ when it comes to video games. It’s still crawling” (CNBC, October 23, 2023).
  1. “Netflix’s mobile game download numbers have risen sharply thanks to GTA: The Trilogy” (Video Games Chronicle, January 24, 2024).
  2. “YouTube is getting into games, too” (The Verge, November 27, 2023).
  3. “Disney Buys Stake In Epic Games, Sets Entertainment Partnership Around Fortnite” (Deadline, February 7, 2024).
  4. ”Netflix Considers Ways to Make Money From Videogames in Possible Pivot” (The Wall Street Journal, January 5th, 2024).

Where has the metaverse gone?

Why should we keep an eye on immersive worlds?

By: Corinne Darche
Coordinator, Foresight & Innovation, Canada Media Fund

Artificial intelligence (AI) dominated the tech industry in 2023 and continues to be a hot topic in 2024 as firms scramble to produce their own competitors to OpenAI’s ChatGPT. Even companies like Disney and Microsoft scrapped their metaverse and virtual reality (VR) teams to get all hands on deck for AI 1, 2.

So what happened to the metaverse, the former darling of the tech world?

First, let’s clarify what the metaverse actually is. Coined by Neal Stephenson in his 1992 book Snow Crash, the term designates persistent, immersive, social 3D virtual worlds. Immersion can be achieved through extended reality (otherwise known as XR, which encompasses VR and augmented reality (AR) technologies such as headsets.).

However, the metaverse goes beyond XR and includes rich digital worlds found in multiplayer video games like Roblox and Fortnite.

Said games are massively popular, particularly among young audiences, and for good reason 3, 4. Gen Z and Alpha have a strong relationship with gaming: nearly nine in 10 Canadian children aged 7 to 11 reportedly play games, as well as 85 per cent of teens 5. Growing up with technology and digital worlds, Gen Z and Alpha gamers have been experiencing metaverses without the need of a headset for years. As of December 2023, nearly 80 per cent of players engage with the game on mobile devices, as seen in chart 3.5 6.

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Brands have taken note of Gen Z and Alpha’s interest in these immersive gaming worlds. Fortnite launched partnerships with kid-friendly brands, including LEGO 7 and Disney 8, to cater to young audiences. Future Chicken Today Show 9, a Canadian series that teaches kids about environmental sustainability, expanded beyond television to reach children through multiple mediums, including Roblox. These brands meet young audiences where they are, hoping to hold their attention for as long as possible. Immersive and social worlds do just the trick.

Meanwhile, the XR market grows. Statista’s projections in chart 3.6 suggest 31.1 million Canadians will be using some form of XR by 2028 10. Immersive exhibits have also seen massive success, such as Space Explorers from Felix & Paul Studios and PHI Studio, which sold 450,000 tickets since its launch in 2021.

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While some tech companies pivoted away from XR, others continue to develop their own headsets. Apple released their long-awaited Vision Pro in the United States earlier this year to compete with Meta’s popular Quest 3. Samsung and Sony announced their own headsets shortly after.

Even though XR has been around for a while, it still has not reached the mass adoption necessary for it to be a sustainable ecosystem. There are many contributing factors: cost of headsets (particularly the Vision Pro, which is highly criticized for its US$3,500 price tag 11), lack of mainstream titles, and cybersickness, etc.

But there are bleeding-edge studios finding niches and pushing the boundaries in immersive storytelling, user experience, applications, and distribution—all of that despite XR’s ups and downs. XR headsets being used in virtual production in the audiovisual industry is but one example of that 12.

Immersion is often viewed as the future of entertainment, despite the spotlight moving away from it over the past 18 months. Keep in mind, however, that an industry’s future isn’t built in a day, nor uniquely based on trends. It involves investing in talent over time to build a robust ecosystem and to grow trust and interest with audiences. The same can be said for immersion.

Audiences and tech companies clearly haven’t given up on immersion – not even close. As the talent pool in the gaming and XR industries grows and develops, the rich immersive worlds that they offer are still finding new ways to reach audiences, old and new, across generations.

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  1. “Bob Chapek’s Metaverse Division Cut in Disney Layoffs” (The Hollywood Reporter, March 28, 2023).
  2. “Microsoft nixed Mixed Reality: This Windows VR didn’t even make it to the ER” (The Register, December 27th, 2023).
  3. “Fortnite Usage and Revenue Statistics (2024)” (Business of Apps, January 8, 2024).
  4. “Roblox Statistics For 2024 (Users, Revenue & Trends)” (Demand Sage, November 18, 2023)
  5. “MTM Jr. Level Up!” (MTM, January 26, 2023).
  6. “Distribution of Roblox audiences worldwide as of December 2023, by platform.” (Statista).
  1. “Lego Fortnite is first step towards Epic and Lego’s kid-friendly metaverse” (, December 8th, 2023).
  2. “Disney Buys Stake In Epic Games, Sets Entertainment Partnership Around Fortnite” (Deadline, February 7th, 2024).
  3. “Future Chicken.” (Wind Sun Sky Entertainment).
  4. “AR & VR – Canada” (Statista) Note that this number includes social media filters and lenses (ex.: Snapchat, Instagram, TikTok).
  5. ”Apple Vision Pro: Why does it cost $3,499 and will people pay it?” (ABC News, January 26, 2024).
  6. ”What is Virtual Production? An Explainer & Research Agenda” (University of York, Winter 2023).