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Correction from last week: we said Kojima hadn't shipped a game in a decade. He has. Death Stranding 2 came out in 2025 and sold 2.5M copies, vs. 1.9M for the original. Thank you for raising this.

Happy Friday, friend! Here's what you ought to know about this week in games:
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• The games market hit a record. In real terms, it's barely growing. Strip out inflation, and the industry grows about 2% a year. And if you think that screams of a mature industry, consider that all of 2025's net growth effectively went to just five companies.
• Chinese publishers want to draft off GTA VI. Perfect World, Tencent and NetEase are putting free-to-play open-world city games on mobile. Will the hype carry them for long?
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For maximum insight and entertainment, watch the full TWIG podcast (Apple / Spotify).

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This week we dig into Newzoo's latest numbers and where growth comes. Then we look at how indie titles like Big Walk and How to Fish cracked the top 10 Steam revenue chart, what Naughty Dog's new Last of Us tease means, and why Chinese developers are rushing GTA-style mobile games out ahead of GTA VI.

Newzoo Says Gaming Hit a Record $214 Billion.
So Why Does It Feel Like a Recession?

​Newzoo pegs 2026 at $213.9B, the biggest number the industry has ever posted. Adjusted for inflation, the number is considerably less than during the lockdowns and not likely to hit those unrealistic peaks anytime soon because the market is growing just 2% a year.

Newzoo puts the 2026 games market at $214B, and Ronan Patrick's (give the young lad a follow) Substack, where the growth is actually going, breaks the report into seven points. The headline says record year. The real number is less flattering. Cumulative inflation over five years is about 19%, which means roughly half of the nominal growth in the chart is just the dollar losing value.

My read is that the market compounds at around 2% to 3% a year in real terms, not the 5% on the slide. And please, stop benchmarking against 2021. It was a COVID anomaly, and the chart itself shows it.

Where the real growth sits matters much more. The West and China produced 71% of the 2025 dollar-nominated growth. The average North American spender pays $335 a year. In the Middle East and Africa, it is $36. Emerging markets post big percentage gains on tiny bases and drive almost no revenue.

On mobile, five companies (Tencent, Century Games, The Pokémon Company, Roblox and Garena) are responsible for nearly all growth. They added about $10B in 2025, with Tencent alone at $6.2B. Century grew mobile revenue 99% on two 4X games and a bit of Merge-2 magic (read: Just Dessert vs. Gossip Harbor: Who Merged It Better?).

The mechanism is acquisition economics. H1 downloads fell 25%, CPI (cost per install) is up 30%, and paid now makes up 61% of installs. Mobile revenue still grows, but it grows from games that already exist.

Console tells the same story, with 93% of spend going to titles that were already out. On Steam, about 300 of 20,000 releases cleared $1M. Eric's argument is that this is demand, not supply: players want the same games, and nobody is giving them something else. I blamed the flood of vibe-coded apps for rising CPIs. Eric blames Century, Scopely, and the gambling apps pouring hundreds of millions into AppLovin. Vibe-coded apps with no organic traffic also have no budget, so I suspect he is right.

What operators should do is not complicated. Treat your existing base as the growth plan: reactivation, lapsed spenders, live ops depth. Model user acquisition payback assuming CPI keeps climbing. Stop designing primary strategies around so-called geographical growth pockets until their wallets move along with players. I

If you are choosing a career or a bet, big publishers are where scale pays. Yet scale is not safety. When a large game fails, layoffs follow. If safety is what you seek, get into live-operated titles that are 5 years or older and become the chief love bomber for an existing audience. Roblox or Steam are a fit only if you're native to those platforms. And it's going to be a bet you make with your bootstraps.
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>> The full conversation on the state of the games market.​

>> The full Newzoo report​

GTA VI Races to Console. Chinese Publishers Want to Own It on Mobile First.

PC and console publishers are clearing out of GTA VI's November 19 launch window. Perfect World, Tencent and NetEase are doing the opposite. Each is betting that a free-to-play open-world city game can draft off the biggest launch in years.

GTA VI lands on November 19. Chinese publishers are not waiting. Perfect World shipped Neverness to Everness in April across PC, PS5, and mobile. Level Infinite put Gangstar Mirage City into soft launch on August 20 under a Gameloft license, with 30M pre-registrations. NetEase brings Ananta in January, free-to-play and cross-platform. The production quality on all of them is impressive. The setting could be the challenge.

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Ananta NetEase is free-to-play, launches on consoles and mobile in early 2027 and looks absolutely stunning. ​
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Neverness and Ananta are anime open-world games, and neither sells the GTA fantasy. Ethan made the sharper point: GTA competes on two vectors, open world sandbox and modern crime, and GTA Online adds a decade of multiplayer live ops on top. Everyone who tried the direct crime clone (True Crime, Saints Row, Mafia, Scarface) has faded. The titles that actually look like GTA in an app store search are One State RP and Gangstar. Early numbers are modest. Neverness made about $9M on mobile in August per Sensor Tower; One State RP roughly $7M; Mirage City about $400K in soft launch.

Ananta is the boldest bet. It is a single-player, AAA-quality, free-to-play game that monetizes only through cosmetics. Think GTA given away with a battle pass. It will rack up downloads and creator coverage. Whether it recoups its budget is a different question, and Ethan expects a pivot toward co-op or multiplayer quickly. Eric called it a premium game with the price removed. I agree with both. Every console executive watching a free game of this quality should be uncomfortable.

Will the audience expand? Jen's case is real: many players do not own a console, the crime fantasy barely exists on mobile, and GTA marketing will lift awareness everywhere. Eric's case is also real: GTA players in the West are on console because controls and monetization on mobile are bad, so he expects no meaningful Western halo. My take is that the halo exists but is small, concentrated in crime-themed titles and in markets without consoles. Those are the same low-ARPU markets the first half of this newsletter says do not move the industry. Chinese publishers are drafting off the biggest launch in entertainment to reach the players who spend $36 a year. Is that a strategy or a consolation prize?

​The full conversation on the GTA VI drafters.​