The business of making and selling video games has changed significantly over the past two decades. Games have moved from products sold through physical retail and app stores to long-running services built around ongoing relationships with players.
Chris Hewish, President of Xsolla, has worked across many of the industry's major shifts. His career has included positions at Activision, DreamWorks Animation, Survios and Skydance, where he was involved in designing and producing more than 50 games that generated over $1 billion in sales.
Today, Hewish leads Xsolla, a video game commerce company that provides payments, distribution and monetization services for developers and publishers ranging from independent studios to major companies. He is also the author of Durable Advantage: Five Pillars of the Modern Game Business, which examines how game companies can build long-term commerce and payments infrastructure rather than depending entirely on platforms they do not control.
After more than 20 years across development, publishing and commerce, Hewish sees the industry's next phase being shaped by direct-to-consumer commerce, account-based ecosystems, changing monetization models, AI, regional payments and practical applications for emerging technologies.
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The Games Industry Has Become More Than the Game
Hewish said one of the biggest changes he has witnessed is the transformation of what a game represents as a business.
"I've been lucky to work through several of gaming's big technology shifts: console publishing at Activision, mobile and transmedia at DreamWorks Animation, VR at Survios and Skydance, and now direct-to-consumer commerce infrastructure at Xsolla," he said.
For much of gaming's history, selling a game involved a relatively straightforward transaction through a retailer or platform. Once the purchase had been completed, the relationship between the player and the company could effectively end.
That model has changed as live-service games, free-to-play titles and connected ecosystems have become more established.
"The biggest change is what a game actually is as a business," Hewish explained. "For most of gaming's history, selling a game meant going through a gatekeeper, a retail shelf or an app store, and the transaction was essentially the end of the relationship with the player."
"Today, the biggest games run as living businesses for years. The game isn't the whole business anymore; it's the foundation."
Hewish said this approach was already visible during his time at Activision, where he worked to bring marketing and development teams closer together.
"I saw an early version of this at Activision, where I started embedding marketing teams directly with development teams so the player's voice was at the table from the start," he said.
Distribution has changed alongside the business model. Rather than being tied primarily to individual devices, modern game ecosystems increasingly revolve around player accounts.
"Distribution has changed too. It's becoming account-centric rather than device-centric, and cross-play, cross-save, and shared progression are expected on day one," Hewish said.
Looking forward, he identified three developments that he expects to become increasingly important: account-centric economies, real-time hybrid monetization and community-driven commerce.
"Looking ahead, I expect three things. Account-centric economies, where players carry one identity across every device. Hybrid monetization running in real time. And community-driven commerce, where creators and players are recognized for what they contribute."
Why Direct-to-Consumer Commerce Matters
Direct-to-consumer strategies have become an increasingly important part of the conversation around game distribution, particularly for companies that want greater control over their player relationships and commerce operations.
In Durable Advantage, Hewish divides game companies into two broad categories.
"There are two kinds of game companies, renters and owners," he said.
"Renters build good games, distribute through platforms they don't control, and measure success by downloads and launch rankings. Owners govern their own player relationships, commerce, and data, and turn those advantages into value that compounds over time."
The financial impact can become substantial at scale. Hewish used a hypothetical game generating $200 million in annual revenue to illustrate the long-term implications of platform fees.
"A game making $200 million a year hands roughly $60 million to platforms under a 30 percent platform fee. Over a decade, that's $600 million."
He also drew on his own experience with a mobile title that attracted a large player base but struggled to maintain momentum.
"I learned this the hard way. I shipped a mobile game that passed 100 million downloads in months and still watched it collapse once promotion stopped, because the business never owned its relationship with those players," Hewish said.
His framework for building a durable direct-to-consumer strategy rests on five pillars: relationships, commerce, intelligence, trust and time.
Of those, Hewish believes intelligence is often overlooked.
"Studios underestimate intelligence most," he said.
He explained that changes in revenue do not always mean a game needs more content or expanded localization. Infrastructure and payment accessibility can also play a role.
"If a new digital wallet captures 20 percent of a region's players and your platform doesn't support it, revenue drops, and without your own transaction data you might wrongly conclude you need more content or more localization."
For Hewish, Warframe provides an example of a game company maintaining a long-term relationship with its audience.
"Warframe is my favorite industry example. Digital Extremes launched in 2013 with no major publisher and almost no marketing budget, but owned its player relationships from day one, and more than a decade later it's still going strong."
Hewish argues that the infrastructure required to pursue this approach is now available to smaller developers as well as major publishers.
"The good news is that owned identity, direct commerce, and behavioral data are now accessible to studios of every size. There's no longer really a technology cost, just a knowledge cost."
Blockchain Needs to Move Into the Background
Blockchain and digital ownership have been part of the games industry conversation for years, although adoption among mainstream players has remained limited.
Hewish said the first wave of blockchain gaming projects made a fundamental mistake by putting financial mechanics ahead of the games themselves.
"First, we have to be honest about why the first wave failed. Early blockchain games led with financial mechanics and treated gameplay as secondary. That's backward, and players saw through it immediately."
For digital ownership to become useful to everyday players, he believes the underlying technology needs to become less visible.
"What needs to change is where the technology sits. It should be invisible to the player."
"You play because the game is great, and the technology belongs underneath the experience, not in front of it."
He also said the benefits need to be practical rather than driven primarily by speculation.
"The benefit has to be practical. Players should be recognized for what they contribute, whether that's playing, creating, or building a community, without speculation or financial engineering."
Gaming already contains many of the behaviors that could support such systems, according to Hewish.
"Players already collect items and complete quests to unlock rewards. That's the behavior worth building on."
Regulation will also remain part of the process as digital ownership technologies develop.
"Regulation is still evolving, and responsible companies build compliance in from the start rather than adding it later."
"Smarter, Not Bigger" Monetization
The games industry has increasingly questioned whether simply maximizing player numbers and spending is a sustainable strategy, particularly after significant investment in live-service projects.
Hewish described 2025 as a period of correction following that expansion.
"I'd describe 2025 as a correction year. Companies became more cautious after overextending on live services," he said.
"Now we're seeing fewer massive bets, more portfolio logic, and direct-to-consumer becoming structural rather than a side experiment."
The commercial pressure remains significant, particularly as user acquisition becomes more expensive.
"And the pressure is real. User acquisition costs are rising, and the margin for error in player experience is shrinking."
For Hewish, smarter monetization consists of three main principles: segmentation, reach and trust.
"The first is segmentation. Developers won't choose a single business model. They'll layer premium, subscription, bundles, and seasonal value simultaneously, matched to different player segments."
Rather than relying on one monetization approach, developers can therefore build several options around different audiences and behaviors.
The second consideration is accessibility.
"The second is reach before extraction. In some regions, 10 to 40 percent of players can't transact if you don't support the local payment methods they use."
Hewish sees this as a commerce problem as much as a monetization problem. A player cannot become a paying customer if the payment system does not accommodate their preferred method.
The third principle is trust.
"The third, and most important, is trust. Trust isn't a feeling players have about you. It's a track record you build one decision at a time, and players update it constantly."
Privacy is part of that relationship, particularly as regulations such as GDPR influence product development.
"Privacy is part of that. Regulations like GDPR are changing product design, and privacy and player safety are becoming a selling point."
His broader position is that developers should view players as long-term participants in the business rather than simply sources of revenue.
"Treat players as long-term partners, not just customers."
AI Could Broaden Competition
Of the technologies expected to influence the next five to ten years, Hewish sees AI as particularly important because of the way it could affect the ability of smaller teams to compete.
"On AI, the biggest impact is on who can compete," he said.
"AI levels the playing field, scaling what smaller teams can achieve, and it supports the shift toward 'forever games' by making ongoing content production more cost-effective."
At the same time, Hewish said the industry's enthusiasm around AI needs to be balanced against its effects on creative teams.
"I've also been clear-eyed about the risks, including the impact on creative teams."
AI can also introduce technical problems, particularly when tools generate code that appears functional but does not perform reliably in production environments.
"On the commerce side, we're already seeing AI coding tools generate code that looks right but fails in production, which is why we built our AI Toolkit," he said.
XR and the Blockchain Conversation Are Changing
While AI is moving rapidly into practical applications, Hewish takes a more cautious view of extended reality.
"On XR, I'll be candid. The hype cycle has plateaued, and the category is resetting expectations."
Blockchain is also undergoing a change in focus.
"On blockchain, the conversation is moving away from speculation and toward a simple question: does it make the game better for players?"
"Where it does, it will stick."
That distinction places greater emphasis on whether new technology solves a genuine problem for players rather than simply introducing a new technical feature.
Payments Are Becoming More Important
Payment infrastructure is another area where Hewish expects significant changes over the coming decade.
"On payments, regional preferences and regulations continue to fragment the global landscape, and developers who can meet players where they pay will win."
The growth of mobile is also influencing the wider entertainment ecosystem.
"Mobile is becoming the central hub, driving transmedia franchises that blend games, film, music and social."
This reflects the broader shift away from games existing as isolated products. Players can increasingly move between different elements of a franchise while maintaining an ongoing relationship with the same intellectual property.
Architecture Could Define the Next Generation of Game Businesses
Across the different technologies and business models discussed, Hewish identified a broader trend that he believes will shape the industry.
"The common thread is that competitive advantage is moving from whoever has the most technology to whoever has the strongest architecture."
That architecture encompasses the systems surrounding the game as much as the game itself. Player identity, commerce, payments, data, privacy, content production and community can all contribute to the long-term operation of a modern game.
As the industry continues moving toward account-based ecosystems, persistent games, direct-to-consumer commerce and more varied monetization strategies, the commercial infrastructure surrounding a game is becoming increasingly connected to its long-term prospects.
For Hewish, the next stage of the games business is therefore not simply about adopting the newest technology. It is about building systems that allow developers and publishers to maintain relationships with players while adapting to changing platforms, payment methods and player expectations.
