Pixel P&L: Olympic Esports Games Postponed as IOC Ends Saudi Arabia Deal

Welcome to another Pixel P&L edition. This issue takes 5 minutes to read. If you only have one, here are the 5 most important things:

• IOC cancels Saudi Arabia partnership, scrapping the 2027 Olympic Esports Games.

• India's gaming market is set to triple to $7.8 billion by 2030, driven by mobile gaming and esports growth.

• Microsoft's gaming hardware sales plummet 29% as the company doubles down on services.

• Pokémon TCG Pocket hits $1.3 billion in its first year, outperforming Pokémon Go's launch.

• Nintendo's creature-capture patent rejected in Japan, potentially impacting its Palworld lawsuit.

Let's get into it.

IOC Scraps Saudi Partnership for Olympic Esports Games

The International Olympic Committee has terminated its 12-year partnership with Saudi Arabia's Olympic committee, canceling plans for the inaugural Olympic Esports Games scheduled for 2027.

The decision ends the IOC's collaboration with Saudi Arabia's Esports World Cup Foundation after months of negotiations. The IOC cited a need to better align the esports initiative with "the long-term ambitions of the Olympic Movement."

The governing body now plans to develop "a new approach" and pursue alternative partnerships for the Olympic Esports Games, though no timeline has been established beyond delivering the event "as soon as possible."

The split allows both organizations to pursue separate esports strategies. Saudi Arabia will proceed with its Esports Nations Cup, launching in Riyadh next year as a biennial competition.

The IOC first announced the Olympic Esports Games in October 2023 and held a publisher forum in June to shape the event's framework.

India's Gaming Market Set to Triple to $7.8 Billion by 2030

India's gaming industry is projected to more than triple to $7.8 billion by fiscal 2030 from $2.4 billion currently, making it the fastest-growing segment in the country's digital entertainment market, according to a report from BITKRAFT Ventures and Redseer Strategy Consultants.

The expansion follows the government's August ban on real-money gaming, forcing a pivot toward digital games and esports. With 520 million gamers among 825 million internet users, mobile platforms dominate 78% of the market.

The business model is shifting dramatically. In-app purchases are expected to overtake advertising revenue by 2030, accounting for 66% of total revenue as average spending per paying user has surged ninefold since 2020 to $27.

More than 500 Indian gaming companies have launched in five years. The esports sector is growing even faster, projected to expand sixfold to $132 million with new government recognition.

🎮 On Our Radar: Microsoft's Gaming Hardware Dilemma

Is the traditional console business model showing its age, or is Microsoft simply caught in a transitional moment? The company's latest Q1 FY26 results paint a striking picture: overall revenue climbed 18% to $77.7 billion, but gaming revenue dropped 2% with hardware sales plummeting 29%.

The numbers reveal Microsoft's shifting priorities. Xbox Game Pass and third-party content showed modest 1% gains, but couldn't offset the significant hardware decline across their entire console range. This comes alongside aggressive pricing moves: consoles increased $20-$70, Game Pass jumped 50%, and development kits reportedly rose 33% to $2,000.

What makes this fascinating is how it compares to competitors like Sony, who continue seeing strong PlayStation 5 hardware sales. Microsoft appears to be betting on a different future: building a gaming ecosystem that lives beyond the console, similar to how streaming platforms matter more than the devices accessing them.

Xbox president Sarah Bond has confirmed next-gen hardware is in development through an AMD partnership, signaling Microsoft isn't abandoning consoles entirely. They're positioning themselves to offer multiple pathways to their ecosystem.

We're watching closely as Microsoft navigates this transition. Will their services-first approach prove prescient as the industry evolves, or are they risking their core console audience?

⚡️Quick Bytes

Pokémon Card Game App Hits $1.3 Billion in First Year

Pokémon Trading Card Game Pocket has generated $1.3 billion in its first year, surpassing Pokémon Go's inaugural performance of just over $1 billion, according to AppMagic data reported by PocketGamer. The mobile game peaked at $229.3 million in November 2024, its launch month. February's Space-Time Smackdown expansion drove the highest single-day revenue of $11.2 million. The game earned over $12 million within four days of its October 30 debut.

Nintendo's Pokémon Capture Mechanic Patent Denied in Japan

Nintendo's patent application covering creature-capture mechanics has been rejected by Japan's Patent Office following third-party submissions citing prior art, Games Fray reports. The office action, issued after Nintendo's March 2024 filing, determined the technique lacked inventiveness, referencing games including ARK, Monster Hunter 4, and Pokémon Go. While not final, the decision may force Nintendo to amend its application and could impact its September lawsuit against Palworld developer Pocketpair over alleged patent infringements.

⚔️Side Quest

🤣Laugh:

📺 Watch: Cyberpunk creator Mike Pondsmith discusses the tabletop origins of his dystopian universe, the philosophy behind saving yourself over saving the world, and his collaboration with CD Projekt Red. He shares behind-the-scenes stories about Keanu Reeves and Idris Elba's casting, plus the extensive research that made Cyberpunk's technologies believable. Essential viewing for franchise fans.

🎮 Play: CARIMARA delivers a charming folklore adventure with strikingly unusual visuals and hauntingly effective animations that convey deep emotion through simplicity. The dark, spooky aesthetic captures classic fairy tale atmosphere perfectly. While mechanics can be obtuse, the short runtime and rewarding environmental exploration make this passion project worth experiencing. A unique, beautifully crafted indie gem at a fair price.

📚 Read: GameBiz Consulting reveals how minor tweaks like reordering ad placements, adding "free" labels, and unblocking competitor ads produced unexpected revenue swings up to 30%. These five experiments prove that assumptions about player behavior often fail, making rigorous testing essential.

💡Did You Know

Castle Wolfenstein, the groundbreaking 1981 stealth game, had surprisingly humble origins. Creator Silas Warner initially developed just a basic program featuring "a guy running around in rooms" with no clear game concept. The breakthrough came when Warner watched a World War II film depicting Allied commandos infiltrating a German fortress. This cinematic moment provided the perfect context for his wandering character, transforming a simple tech demo into gaming history. The result pioneered the stealth genre, requiring players to sneak through a Nazi stronghold, and later inspired the legendary Wolfenstein 3D, which revolutionized first-person shooters.

📜 Quote of the Day

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