Thriving in lockdown: Video game market to hit US$160 billion this year
FYI, this story is more than a year old
Video games have served not only as a way to pass the time for those isolating in the face of COVID-19, but also as a means of escapism in light of the pandemic.
For those reasons, and some other, more technical ones (more on that below), the global gaming market will generate revenues of US$159.3 billion this year – a 9.3% increase year-on-year, according to Newzoo, the games market analytics company.
In other words, the gaming industry in general is doing just fine in the wake of the global outbreak.
All gaming segments (mobile, console and PC) saw an increase in engagement and sales as COVID-19 kicked in, but nowhere is the growing success of gaming this year more evident than in one particular sub-genre: mobile gaming.
According to the data from Newzoo, mobile games alone will generate a whopping $77.2 billion in revenue this year - almost half of the total revenue for the entire gaming industry. This represents a 13.3% increase year-on-year.
So what makes mobile gaming so popular?
For starters, it has the lowest barrier to entry – anyone who has a smartphone (almost 40% of the entire population of Earth meets this requirement) has access to gaming.
Mobile game development is also much speedier and more cost-effective than console game development, providing an edge especially as teams work from home.
But this is not to say console and PC gaming won’t also do well this year.
Newzoo data indicates console gaming will grow 6.8% year-on-year to $45.2 billion in 2020, with 729 million players across the globe.
But, while engagement in console gaming has seen a spike during lockdowns, disruptions to production have thrown a spanner in the works.
Physical distribution, massive cross-company collaboration, and certification are a major part of console game development, which may result in game delays in the future or games scaling down scope or features to hit release windows, says Newzoo.
These kinds of delays will also affect the launch dates of previously announced new, next-generation consoles like the PlayStation 5.
This is to say nothing of the decrease in sales of consoles seen between 2018 and now, as anticipation of next-generation consoles ushered in a greater reluctance to spend money on consoles which are soon to be outdated.
In light of this, Newzoo says the next-gen consoles and associated content are essential to kickstart a new phase growth in that segment.
PC gaming will see the smallest growth year-on-year of the big three segments, growing 4.8% year-on-year to 36.9 billion in 2020 – with this growth being ‘almost fully attributed to lockdown measures’, according to Newzoo.
Unlike console gaming, new releases for PC rarely reach revenues that significantly change the market’s outlook, says the company.
However, the PC ecosystem moved to digital from physical much quicker than console did, meaning physical distribution is not as much a problem as it is for consoles.
Newzoo’s data indicates that almost half of revenue across all three gaming segments (mobile, console and PC) this year will come from two nations: China and the United States.
Despite this, growth will be driven from emerging markets – particularly in Latin America and the APAC region.