By Sagar V. Mankar 
Global mobile gaming spending experienced a 6% decline in 2024, largely driven by reduced disposable income and a sharp drop in the popularity of hyper-casual games. However, Israeli gaming companies have remained resilient, continuing to play a significant role in the industry by contributing 5% of global mobile game downloads. Their success can be attributed to innovative monetization strategies and the integration of advanced technologies such as neural networks in game engines.
At the recent Calcalist Gaming Conference, hosted by Google and Playtika, Assaf Vaknin, Head of Apps at Google, highlighted these trends. While acknowledging the overall market decline, Vaknin emphasized that Israel’s consistent contribution to global downloads underscores the country’s strength in the mobile gaming sector.
The downturn primarily impacted hyper-casual, racing, and simulation games, categories often associated with stress relief and quick entertainment. Given the challenging year Israel has faced, this shift in user behavior is understandable. In contrast, puzzle games, word games, casino titles, and card-based games have seen an uptick in downloads, reflecting a change in player preferences.
Significant industry events this year included Playtika’s acquisition of SuperPlay, Plarium’s continued expansion, Crazy Labs surpassing seven billion installs, and VGames raising $142 million in fresh funding. These milestones demonstrate the sector’s resilience despite global economic challenges.
Vaknin identified three key opportunities for Israeli gaming companies to sustain growth:
- Geographic Expansion: Israeli gaming companies are heavily focused on the U.S. and Western European markets, but significant revenue potential remains untapped in Asia. Success stories from companies like Roblox, which expanded into Japan and South Korea, highlight the potential of these markets.
- Hybrid Monetization Models: Combining advertising revenue with in-app purchases has proven to be a lucrative strategy. Vaknin noted that several Israeli firms are adopting tailored game economies, enabling them to significantly boost their revenue streams.
- Leveraging Celebrity Partnerships: Collaborations with well-known personalities and brands can create deeper emotional connections with players. Vaknin suggested that Israeli creativity has ample room to innovate in this area.
In addition to market strategies, the Google Research team demonstrated groundbreaking research on “using neural networks as game engines.” Their study reimagined classic games like DOOM, demonstrating how machine-learning models could generate game visuals and mechanics based on gameplay recordings. Instead of traditional programming, their approach used keyboard inputs to predict and generate corresponding game frames.
Danny Walawski, a researcher at Google Research, explained:
“A game engine refers to the code that runs the game. The engine takes maps of levels and the game’s graphics, manages the game logic and displays everything in 3D. What if we ran the game engine entirely on a neural network, end-to-end? The idea is for the model to be created automatically just by watching recordings of the game.”
This method opens possibilities for creating dynamic gaming experiences without manually writing extensive code. The implications of this technology extend beyond replicating existing games, offering the potential to design entirely new levels, behaviors, and even complete games powered by neural networks.
The research has already gained significant attention, pointing towards a future where AI could play a central role in game development and design.
Source: YnetNews