Published on: November 20, 2019
Video games are interactive software-based games, which are played using specialized electronic gaming devices such as computers, mobile devices, and consoles. Such devices have allied components such as gaming controllers and body movement trackers to control the graphic images and characters in games. The global video game market is a part of the global interactive home entertainment market within the global media and entertainment market. The global interactive home entertainment market covers companies engaged in producing interactive gaming products, including mobile gaming applications. It also includes educational software used primarily in the home.
Our report encompasses a holistic analysis, market size and forecast, trends, growth drivers, challenges, as well as vendor analysis. The video game market is estimated to grow at a CAGR of 9.1% to reach USD 193.5 billion by 2023. Based on platform, the mobile devices segment dominates the market with approximately 45% market share and is expected to have the highest growth rate during the forecast period.
The global video game market can be segmented into the following:
Many factors are expected to drive growth in the video game market during the forecast period. Our analysis identifies the following factors to be driving the growth in the video game market:
Mobile gaming is a key segment of the entire video gaming industry. The growth of the mobile gaming segment is driven by the increasing penetration of smartphones and improving access to the internet. The availability of low-cost smartphones is increasing the demand for such devices in emerging countries such as China, India, and Mexico, which is driving the growth of the mobile gaming segment. The internet provides users affordable access to multiplayer games, especially casual online games. Hence, improvements in access to high-speed internet also drive the growth of the global video game market.
Personal and community gaming has evolved from board games into a technology-driven industry. The introduction and popularity of gaming consoles such as Xbox and Playstation have led to the development of the modern video game industry. Hence, several companies that offer PCs have improved their device configurations to support gaming. Most vendors in the PC gaming industry are delivering games as downloadable content. Hence, customers do not have to purchase physical media such as CDs or DVDs. End-users such as individual gamers are using gaming consoles to improve their gaming experience. Hence, companies that offer gaming console are launching updated versions of their gaming consoles, with upgrades and advanced features. The launch of such products will drive the growth of the global video game market during the forecast period.
The growing popularity of eSports tournaments will drive the growth of the global video game market during the forecast period. eSports tournaments are multiplayer video game competitions, which are commonly played between professional gamers. eSports tournaments allow gamers to compete through online platforms. Hence, they remove constraints related to time and location. Such tournaments have a wide following across the world. Hence, technology innovators such as Intel, Micro-Star INT’L (MSI), and Logitech are sponsoring such tournaments. Therefore, the growing popularity of eSports and the rising number of professional gamers are estimated to increase sales of gaming merchandise and accessories as well as video game software and hardware.
Meanwhile, the vendors operating in the market face numerous challenges in increasing their sales and improving profitability. Some of those challenges are:
Due to quality enhancements and increased innovation in the global video game industry, the cost of game development is also increasing, with game budgets reaching up to USD 500 million. The handcrafting of all the art in the game is one of the main reasons for the soaring costs. As characters, items, levels, and visual effects have become more intricate and detailed; developers need to hire specialized artists for the creation of art. The higher development costs hinder the video game market to a great extent as the publishers prefer serving more of their customers liking rather than risking money on something new.
As video games are increasingly available online via Sony's PlayStation Network, Microsoft's Xbox Live or some other platform, cybercriminals are finding ways to exploit users in the gaming community. Cybercriminals consider online gaming a potential source of earning money either by stealing and selling the hacked data or by convincing the user to share their bank details. Instances of this kind have a significant negative impact on the growth of the global video game market.
Most online games require access to social media profile to play the game. This data can be misused by vendors to flood users with unwanted promotions and ads. According to the United Nations Office on Drugs and Crime (UNODC), online gaming is becoming a breeding ground for money laundering.
At present, addiction to gaming has become prevalent. This generally results in physical inactivity, which eventually exposes individuals to various health conditions such as carpal tunnel syndrome, headaches and migraines, and sleep disturbances. Furthermore, chronic back pain has become prevalent among students and young adults because they sit for long periods while gaming. Extensive gaming for long hours also results in unhealthy eating patterns, which is primarily contributing to increased childhood obesity. Awareness about these health conditions is increasing among end-users. As a result, many gamers are restraining themselves from spending significant time on gaming. This is limiting participation in video games, adversely affecting the growth of the market.
Some of the trends that are expected to influence the market during the forecast period are listed below:
Socially, the perception of gaming is changing. There is a demographic shift happening in the gaming audience. The number of female gamers has increased over the years with the advent of mobile gaming. The stereotyping of gamers as being dominated by the male audience no longer holds true. The eagerness among gamers is increasing, especially among the female audience as many organizations use the gamification technique to enhance learning and leadership skills.
Games-as-a-Service (GaaS) characterizes the development, deployment, and operations of games based on customer behavior. The architecture of modern games is shifting rapidly to a web-based infrastructure, wherein vendors can analyze patterns and preferences of gamers. Vendors and game developers use the analyzed data for effective game development. The GaaS approach also allows gamers to optimize their gaming experience and share the same in the entire gaming community. GaaS is expected to act as a common platform for gamers and publishers and is expected to be a key trend in the global video game market during the forecast period.
One of the key trends in the global video game market is the advent of cross-platform gaming. Cross-platform games allow players from different platforms or devices to play together at the same time. A cross-platform game allows PC gamers to play on the same server as that of Xbox One gamers or Playstation 4 users. Many vendors in the global cloud-based video game market are increasingly maintaining the compatibility of their games across smartphones, laptops, tablets, and PCs. This is a key factor propelling the cross-platform gaming experience.
Our report on global video game market covers several large and small vendors active in the market including Activision Blizzard Inc., Alphabet Inc., Apple Inc., Nintendo, Tencent, Electronic Arts Inc., Gameloft, Konami, Microsoft, and NCSOFT Corp.
The following are some of the key developments mentioned in our global video game market report:
Backed with competitive intelligence and benchmarking, our video game market research report is designed to provide entry support, customer and M&A assessment, as well as go-to-market strategy support.
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