The industry will rally soon, says RallyHere head

gamesindustry.biz:

It's been a difficult year across the games industry, but the games-as-a-service sector has had some additional concerns all its own, from the trend of just-launched and seemingly successful titles being unexpectedly shut down to Destiny 2 reportedly missing its revenue projections by almost half, there are some questions about what's happening in live service games.

We put these questions to Stewart Chisam at the Montreal International Games Summit last month. As the president of Smite and Paladins company Hi-Rez Ventures and the CEO of Hi-Rez subsidiary and live service game operational support company RallyHere, Chisam has some expertise on the subject, and he seems fairly optimistic about the underlying health of the segment.

"Realistically, I think there's a big COVID hangover in games-as-a-service," Chisam says. "I have a background in supply chains and in supply chains we would call this a bullwhip effect. We had a surge in demand overnight when the pandemic happened. All of our games and practically every other game saw their engagement go up by 50% in many cases, literally overnight. Many more people poured in, and not just numbers of people, but the hours players were putting into the game.

"With that came a massive surge of investment in the industry. And some of this had started before the pandemic, mostly in 2018 when Fortnite really took off. A lot of people saw that success and wanted a piece of that pie, so a lot of venture money and other money came into the industry at the time."

Naturally, some of that money went to chasing live service games. But with the pandemic effect on engagement metrics fading and interest rates rising, Chisam says there were just more people chasing it than the market