Horizon Scan 2025: Key Trends in Games & Esports

1. Player Protection 

The major theme of player protection is set to continue into 2025, with increased global legislation and regulatory oversight. 

Safeguarding consumers by promoting fair competition in gaming

The EU's Digital Markets Act (“DMA”) and the UK's Digital Markets, Competition and Consumers Act (“DMCCA”) aim to upgrade competition and consumer law. The new regimes are primarily aimed at reining in the market power of major tech firms and platforms. In the gaming context, platforms like the Apple’s App Store and Apple’s Operating System will be under scrutiny. 

European Union:

The DMA, which entered into force in November 2022, aims to restrict the influence of companies designated as 'gatekeepers', which are companies with a significant impact on the market and that provide a core platform service, essential for businesses to reach end users. So far, six companies have been designated as gatekeepers, Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft in relation to 22 core platform services. Core platform services include app stores and systems essential for online operations. The new rules outline clear obligations, such as allowing third parties to interoperate with the ‘gatekeeper’s’ services and enabling business users to promote their offerings and contract with customers outside the gatekeeper’s platform. 

The impact of the DMA is as follows:

• More Affordable Games and Innovation: The DMA requires gatekeepers to allow developers to distribute apps via alternative app stores and sideloading. This change aims to reduce the dominance of these platforms' proprietary app stores, encouraging developers to seek cost-effective distribution channels and potentially lower prices for consumers. 
  
• Enhanced Interoperability: Developers must have free access to essential operating systems, hardware, and software features, enabling the creation of fully integrated games and improved user experiences.
  
• Transparent In-Game Purchases: Platforms can no longer force the use of their own payment systems, allowing gamers and developers to use alternative, potentially cheaper payment methods.
  
• Improved Data Insights: Developers have improved access to user data, enabling them to create more engaging, data-driven games.
  
• Data Portability: Gamers can transfer saved data between ecosystems (e.g., iOS to Android), preserving their progress and enabling platform switching without losing data.

United Kingdom:

The DMCCA, which partially came into effect on 1 January 2025, gives the UK’s Competition and Markets Authority (“CMA”)'s Digital Markets Unit the power to investigate and act against platforms that unfairly favour their own products or limit competition. This includes through the designation of certain firms as having strategic market status (“SMS”). On 23 January 2023, the CMA launched two parallel investigations into Apple and Google to determine whether they should be considered as having SMS in the provision of mobile ecosystem services. The DMCCA sets out specific rules for companies and provides measures to address market power issues.

The DMCCA not only introduces competition reform, but dramatically alters the UK consumer law environment. In 2025, the CMA will be empowered to independently decide whether consumer law infringements have taken place, and fine businesses directly for those breaches. Coupled with increased fining thresholds in the EU and scrutiny over the gaming sector in general, we expect to see regulators taking a tougher stance against harmful players practices. Common areas of concern include dark patterns, in-game monetisation, subscription traps, loot boxes and selling to children.

As part of this, we believe 2025 will be a year for gearing up compliance efforts for new subscription rules across the UK, EU and US. Games businesses will need to:

• Adjust player sign-up journeys to include all the information they need regarding their subscription. 
  
• Set up processes to remind players of their subscriptions.
  
• Create easy-to-locate cancellation buttons on consoles and other online interfaces.

Subscriptions form just one element of a much greater consumer regulatory focus on the games industry (see 2b below for more). 

Creating safer online gaming environments 

Regulators in the EU and UK have focused not only on protecting players’ consumer rights, but also on enhancing online safety, with a particular emphasis on safeguarding young gamers:

• The UK’s Online Safety Act (“OSA”) requires gaming companies to take action to protect players from illegal content. For games likely to be accessed by children, there are also safety duties relating to harmful content, such as cyberbullying and abuse based on race or gender. To-date, safety measures recommended by Ofcom include clear reporting flows and swift takedown, and in some circumstances, age assurance and changes to recommender system algorithms. In particular, early 2025 will be a critical time for the games sector to complete their illegal content risk assessments, as Ofcom’s deadline is set for 16 March 2025. 
  
  
• Similarly, the EU’s Digital Services Act (“DSA”) aims to create safer online spaces by requiring games qualifying as online platforms to be more transparent, create content reporting tools and implement measures to ensure a high level of safety and security of minors. Games qualifying as other types of ‘intermediaries’ will have similar (though slightly fewer) DSA obligations. 
  
  
• The DSA and OSA will most significantly impact games with user generated content, such as in-game chat functionality, worldbuilding and those with marketplace functionality. If you think you might be caught, read our OSA/DSA Stocktake for a more detailed download on scope and obligations, or visit our Online Safety hub. 
  

A similar trend is occurring in China. China’s regulations on the Protection of Minors in Cyberspace (which took effect on 1 January 2024), enforces stricter age verification and playtime restrictions to protect minors from excessive gaming. These regulations require game providers to implement anti-addiction systems (with an obligation to publish annual reports on their anti-addiction efforts), monitor playtime, and limit in-game spending for minors. The draft Measures for Online Game Management 2023 further emphasise these protections, along with new rules addressing underage gaming refunds and linking accounts to parental controls, setting a clearer path for stricter enforcement.

However, after industry pushback, China rolled back certain elements of these regulations. Specifically, the regulations were quietly removed by the National Press and Publication Administration (NPPA) from its website in January 2024. Despite this retraction, the core provisions of the Protection of Minors in Cyberspace, including age verification, anti-addiction measures, and playtime monitoring, remain in effect, but the government continues to review and refine these rules.

In May 2024, China introduced draft regulations on the “Requirements for Managing Minor Online Game Service Consumption” for public consultation, addressing underage gaming refunds. Under these draft regulations, game developers could be liable if they fail to verify minors' identities through the national system, allowing unlimited access. While linking minors' accounts to their parents is not yet required, it is a common practice that may be regulated in the future. 

Whilst many games platforms will have dedicated trust and safety teams, 2025 will be a year of continual advancement to adapt products to meet global safety regimes.  

2. Challenges facing monetisation strategies and increased competition 

In a market where millions of games are available at consumers’ fingertips, publishers are navigating a highly competitive market, where the demand for innovative and engaging content is relentless. As such, video game publishers of various types are exploring increasingly diversified monetisation strategies. 

Below outlines some of the key trends that we can see sculpting the monetisation strategies across the globe:

(a.) In-Game Items

One such attempt at diversification is the use of in-game items as an important revenue stream. (Almost) gone are the days where purchasing a video game meant buying a physical cartridge or disk with all the content fully loaded. Whether it’s in-game cosmetics, additional downloadable content (“DLC”) or loot boxes, recent years have seen a huge trend towards publishers releasing games that can be downloaded and played for free, with optional in-game purchases to enhance the experience (a so called ‘freemium’ model). In-game items allow developers to create ’new’ revenue whilst continuing to leverage existing IP, squeezing maximum value out of an existing game as opposed to incurring the significant cost (and risk) of developing something new. Particularly in an uncertain economic climate, we can only see this trend continuing.

(b.) Subscription-Based Gaming Models

Another significant trend impacting monetisation is the shift towards subscription-based gaming models. This comes in two forms:

• Services such as Xbox Game Pass and PlayStation Plus offer players extensive libraries of games for a relatively low monthly fee. While these models promise steady revenue, they also create high expectations for continuous delivery of new, high-quality content. A failure to meet these expectations can be detrimental, as seen with platforms that struggled to maintain long-term user engagement and content offerings, ultimately leading to their shutdown. Moreover, featuring high quality content via subscription models is expensive for publishers, meaning the competition for player attention and engagement is fierce. On the other hand, this creates great opportunities for players seeking good deals for games across service offerings. 
  
  
• Individual publishers, particularly those publishing mobile games, offering premium features within their games by way of subscriptions. This could be regular drops of DLC or virtual currency, or access to online multiplayer functionality, but is seen as a means of retaining (paying) customers in the long term to deliver a steady revenue stream.

(c.) Intellectual Property and Litigation Trends

Publishers are more staunchly protect their rights. We’ve seen companies like Nintendo becoming more proactive in protecting their intellectual property rights, likely driven by concerns that smaller developers/start-ups are capitalising on the popularity of large games by making derivatives or copying game concepts, ultimately diverting potential earnings. This shift towards greater protectionism around IP is perhaps driven to an extent by the advent of AI (and associated copyright concerns), and could make IP litigation a continued featured of the 2025 gaming landscape.

(d.) Regulation

As above, in-game monetisation techniques have often been the cause of debate around the protection of players, especially young people. Towards the end of 2024 the EU’s Digital Fitness Check (which devoted significant attention to the alleged ills of the game industry) and the BEUC’s complaint to the European Commission regarding in-game monetisation techniques, suggest that as we move into 2025 consumer law compliance will continue to be a hot topic and will have a particular focus on in-game monetisation. Consumer regulators are staffing up which, when coupled with greater fining powers and enhanced class action rights, could make 2025 the year where we see games companies hit with significant fines for consumer law breaches and/or the subject of consumer class actions.

In China, legislative developments are resulting in greater regulatory compliance. For instance, Measures for Online Game Management (Draft for Comment), contains the requirement for an "Online Publishing Service Permit," clarifying the approval process for game versions and imposing restrictions such as spending limits, banning daily login rewards, and prohibiting loot box prizes for minors. These measures may therefore impact various in-game monetisation mechanisms featured in live service games, which have historically been prominent in China's gaming sector.

3. Rise of AI and casual gaming

Generative AI (“GenAI”) refers to a class of artificial intelligence models that can create new, unique content based on patterns they’ve learned from data. Although greeted with scepticism by large sections of the games industry (among other things due to IP infringement concerns), this technology could transform various aspects of gaming, including NPC interactions, world-building, and user-generated content (“UGC”).

(a.) Non-playable characters (NPCs)

Traditionally, NPCs interacted with players through pre-scripted dialogue, but GenAI is now allowing for dynamic, voice-driven conversations. Players can converse seamlessly with NPCs, receiving relevant and coherent responses. In the future, NPCs could also physically react to player actions, creating even more immersive experiences. However, there are concerns about the biases in the data that these AI models are trained on, highlighting the need for ethical safeguards.

(b.) World-building

World-building in gaming traditionally relies on procedural generation to create expansive, yet repetitive landscapes. With the advent of GenAI, game developers can produce entirely new, dynamic worlds that evolve based on player interactions. This shift moves away from predictable, pattern-based environments and opens up possibilities for more immersive and diverse gaming landscapes that adapt and respond to each player’s actions in real-time.

(c.) User generated content (UGC)

In recent years, we have seen a surge in UGC with players creating levels, skins, mods and more. Games like Roblox and Garry’s Mod have pioneered the use of UGC, allowing players to create and share their own levels, skins, and mods. GenAI can further accelerate this trend by lowering barriers to content creation. Assisted by AI, even more players will be able to design their own game worlds or create innovative in-game assets, broadening the scope of user involvement and potentially changing how games are played and enjoyed.

For a more detailed insight into these topics and the legal challenges of GenAI in gaming, see our series on this topic.

4. End of the esports winter?

After a period of decline known as the "esports winter" post-Covid, the industry is experiencing renewed growth and investment. This resurgence is highlighted by significant events such as Saudi Arabia's hosting of the inaugural Olympic Esports Games in 2025, marking a 12-year partnership with the International Olympic Committee (IOC) to integrate esports into the traditional sports arena. 

In addition to these sorts of longer-term strategic partnerships/investments, two other points to note are that:

• Non-endemic brands are continuing to enter the esports space, broadening the industry's reach and showcasing its potential as a viable and diverse market. For example, in September 2024, Progressive Insurance was announced as the official sponsor of the Rocket League Championship Series World Championship. Additionally, Saudi Arabia’s Vision 2030 plan is fuelling investments in esports, with the country positioning itself as a global hub for gaming and esports by hosting major events and building state-of-the-art gaming infrastructures.
  
  
• Mobile esports are now among the most-viewed esports tournaments. By way of example, in 2023, two of the top ten esports (by prize money) were mobile games and PUBG Mobile had the second largest prize pool at $21,935,346. Additionally, four of the top ten esports (by peak viewers) were mobile games, and Mobile Legends: Bang Bang had the second highest number of peak viewers at 5,067,107 (source: here), reaching a total of over 530M hours watched over the course of 2023. This is significant for a number of reasons, not least because it opens up new markets to esports where mobile gaming is more pervasive (such as India).

Key Takeaways

• Strengthened Player Protection Through Regulation: Global legislative reforms like the EU's DMA, UK’s DMCCA, and China’s cyberspace regulations, coupled with enhanced powers for regulators, are reshaping the gaming industry, prioritising consumer rights, online safety, and fair competition. Developers and platforms must adapt to stricter compliance requirements to safeguard players, especially younger audiences.
  
  
• Evolving Monetisation Strategies Amid Rising Competition: As publishers continue to pivot to models like in-game purchases, subscription content/services, and mobile-gaming, the demand for innovative, engaging content will only grow. Simultaneously, regulatory scrutiny on practices like loot boxes and subscription traps will drive the need for compliant and creative monetisation techniques.
  
  
• Technology at the Forefront of Change: Generative AI is creating opportunities (and presenting challenges) for both game development and player experiences, whilst the increased availability of more sophisticated mobile games is enabling games to both reach new audiences and engage existing gamers in new ways. 
  
  
• Emerging from the Esports Winter: Esports continues to rebound, with signs of increased appetite for investment on a more sustainable footing.

Many thanks to our contributors: Ariane Le Strat, Heather Catchpole, Esther Ma, Henry Sealy, Mohinder Nagra and Ayo Adebajo.