Australia’s gaming sector evolves with rise of platforms & UGC

Bain & Company has released its 2025 Global Gaming Report, highlighting significant shifts in the global gaming sector with direct relevance to the Australian market.

The report provides analysis from a survey of more than 5,000 gamers worldwide and presents data on changing consumption, distribution and content creation models, and the increasing prominence of user-generated content (UGC) and cross-media intellectual property (IP) in gaming.

Impact on the Australian market

Australia's gaming sector has seen a boost in both public and private investment, with Screen Australia allocating AUD $1.4 million to support local game developers earlier this year, and the announcement of international studios, such as QingCi Games, planning new operations in Melbourne. According to Bain, Australia's developments mirror key global trends that present new opportunities for studios and publishers in the country.

One major finding from the report is the current 'squeeze' on large AAA studios, which face cost increases and margin pressures. By contrast, platform-style games such as Roblox and Fortnite are growing their active user bases by 10% to 20% annually, while independent developers are experiencing a 22% compound annual growth rate (CAGR) in PC revenues since 2018.

"We're witnessing a generational shift in what it means to engage with games," Daniel Hong, Leader of Bain's Global Media & Entertainment practice, said. "Today's top games aren't just entertainment – they're platforms for creativity, socialisation, and storytelling. Studios that embrace this broader role will lead the next era of gaming, and those that don't will be left behind."

Platform games and user-generated content

The report points to the success of games-as-a-platform – titles offering expansive worlds, community-building elements, and tools for user content creation. These titles have become a focal point for both player activity and industry revenue. Notably, UGC is identified as a key driver, with nearly half of surveyed game content creators reporting increased time spent making game content compared to the previous year. This trend is particularly pronounced among younger gamers aged 2–17, who place greater value on customisation and social connections than on high-end graphics.

"Young gamers are driving the success of top games, and their values are reshaping the industry," said Anders Christofferson, Leader of Bain's gaming sector and Partner within Bain's Media & Entertainment practice. "Customisation, social connection, and creativity now rank higher than visual fidelity for many players. The old formula of promising sequels and better graphics is no longer enough to stay competitive."

Changing channels for discovery and distribution

Bain's research shows a decreasing reliance on traditional app stores and digital storefronts for game discovery. In the survey, just 12% of players reported discovering new games this way, with a shift instead towards content creators (24%) and social media (14%). As a result, game makers are increasingly exploring direct-to-consumer (DTC) models to connect with their audiences and bypass significant platform fees. The share of top-grossing mobile games with their own DTC stores has nearly quadrupled in five years, rising from 12% in 2019 to 44% in 2024.

These changes have been accelerated by recent regulatory developments in the US, EU, and Brazil, where courts have relaxed restrictions on developers steering players to external payment channels. Bain observes that these shifts are reflected in Australia's sector, particularly as new classification rules are introduced regarding loot boxes and simulated gambling.

Cross-media engagement

The report also examines how game-related IPs are driving engagement beyond traditional gaming spaces. Around a quarter of gamers' time spent on other media is dedicated to gaming-related IP, including shows, music, and merchandise. Critically acclaimed screen adaptations can have a significant impact, with successful series noted to increase average concurrent user rates by up to 69% for the corresponding games.

Bain identifies several principles that set successful IP owners apart, including maintaining authenticity to the core lore, strategically expanding across compatible media, developing comprehensive long-term engagement roadmaps, and investing in relevant business processes, storytelling, and IP management capabilities.

Shift in industry economics

AAA studios are facing several structural challenges, not just cyclical market effects. According to Bain's analysis, revenues for independent developers have grown faster than those for larger, traditional studios. Key contributing factors include lower barriers to game distribution, better off-the-shelf development tools, and evolving player preferences where engaging gameplay and customisation matter more than high-fidelity graphics.

Indie quality has seen notable improvements, with independent studios accounting for 75% of the top 20 highest-rated games on Metacritic in 2024, nearly double their share from 2016. At the same time, the share of new PC and console game releases has grown about 30% annually over the past decade, increasing competition and making audience focus more critical for studios of all sizes.

Bain recommends that developers respond by understanding and focusing on their core player base, enforcing cost discipline, and building strategies to maximise the value and reach of existing IP.

Direct-to-consumer approaches

In distribution, the growth of direct channels is transforming business models, as companies look to reduce dependence on major platforms and reclaim costs lost to platform fees. Bain's survey highlights that direct-to-consumer channels not only improve margins but also build stronger relationships with players, enabling more tailored marketing and content delivery.

Game companies have responded by launching influencer programmes to drive direct sales, with the number of large publishers offering such programmes increasing from 5% in 2019 to 65% this year. On mobile, companies such as Playtika now report 27% of sales occurring through directly owned platforms, up from 14% in 2020.

In the PC space, while many studios are still reliant on platforms such as Steam, large publishers are increasingly operating their own distribution infrastructures, supported by social media and creator-driven engagement strategies.

Outlook

Bain projects that the global video game market, which reached USD $219 billion last year, will grow at 4% annually to 2028. However, the firm notes that growth is increasingly concentrated among a growing segment of games-as-a-platform, UGC-driven experiences, and franchises with strong IP expansion into other media forms.

The report concludes that the winners in tomorrow's gaming landscape will likely be those companies that adapt their approach - embracing platform business models, prioritising community and creator ecosystems, evolving monetisation, and building direct relationships with players.