Key macroeconomic headwinds such as rising interest rates and geopolitical tension are negatively impacting every asset class. For venture capital in particular, this is driving a more cautious approach to investing that includes more meticulous diligence, heightened expectations on metrics, and more risk adjusted valuations. As a result, the industry as a whole saw a significant slowdown in allocations during Q1 2022. While this paints a generally negative outlook, we remain confident that early-stage venture investments in high growth sectors like gaming will continue to remain resilient.

LATAM's location-based gig economy has seen rapid growth since the early 2010s, fueled by the spread of ride-hailing services and delivery apps across major markets. The pandemic drove further expansion in delivery services while ride-hailing briefly faltered. In recent years, intra-regional migration has provided a steady influx of gig workers, increasing service affordability and overall adoption. Looking ahead, we expect the gig economy in LatAm to see continued growth, not just in transportation and delivery but also in new service sectors and supporting businesses geared toward the unique needs of LatAm gig platforms and their workers.

Game engines like Unreal and Unity, originally designed to power immersive gaming experiences, have expanded their utility into filmmaking, digital twins, and synthetic data creation. Synthetic data, generated by computers rather than real-world events, addresses the growing scarcity and limitations of real-world data for AI model training. It offers cost-effective, customizable, and readily labeled datasets while helping to avoid privacy and ethical concerns. Game engines excel in creating realistic, high-fidelity simulations, which are helpful for training computer vision models and making dynamic simulations. This evolution not only improves AI models but also fuels a flywheel for the engines themselves, creating new tools and capabilities that enhance their use across both the real world and gaming.

AI-powered content feeds like Meta’s Vibes and OpenAI’s Sora are changing the way people discover and share creativity online, opening up new creative tools and opportunities for personal expression. At the same time, it is no longer enough to watch these changes happen. We need to confront, question, and challenge how they are reshaping engagement itself and dictating which interactions survive. Those who fail to study how these technologies evolve will be blind to both their disruption and the consequences that come as they dominate everyday life across almost every facet of society.

The cloud gaming landscape is rapidly evolving, shaped by the lessons learned from Google Stadia's demise and other historical failures (see our history of cloud gaming newsletter), as well as the innovative strides taken by industry leaders like NVIDIA and Microsoft. Assuming costs can be controlled and profitable business models for cloud gaming are deployed, the technology advances and content offering expansions set up the industry for significant growth.

NVIDIA's GeForce Now has effectively minimized latency issues, enhancing player experience, particularly for the hardcore gamer demographic. Simultaneously, Xbox Cloud Gaming has leveraged its extensive game library to successfully address content availability concerns. These improvements reflect a robust response to past challenges and signal a promising future for cloud gaming—a future where it could become a mainstream gaming platform, offering convenience and accessibility.