The benefits of the video game industry exceed $150 billion
The video game industry continues its unstoppable growth and is expected to maintain this trend throughout the next decade. At least, that’s what recent studies predict, estimating that the market will surpass $200 billion in the next two years.
This isn’t the first time the video game industry has been in the spotlight, but perhaps it is one of its most massive entries into the mainstream. The emergence of new platforms and business areas—such as mobile gaming, esports, and the evolution of the PC market—are propelling the industry into an unprecedented phase.
Currently, the video game market is valued at $159 billion (as of the end of 2020), a figure that could reach nearly $218 billion by 2023, according to estimates from Newzoo.
Today’s industry has little to envy from the original arcade boom, the golden age of the ’80s, or the rise of consoles in the ’90s. The market has evolved to reach virtually every home, thanks in large part to advertising, and has weathered economic crises fairly well.
According to other projections, such as those by GlobalData, the market could grow another $100 billion in just two years, reaching a valuation of $300 billion by 2023. Some long-term forecasts even suggest it could reach between $500 and $800 billion by the end of the decade. Still, these are estimates that are nearly impossible to predict with precision, as the industry has proven to be highly unpredictable, with unexpected global events always a possibility.
The Effects of the Pandemic
The crisis brought on by COVID-19 hasn’t had an entirely negative impact on the industry. Despite the cancellation of major expos and the delay of some releases, video games managed to find their place during lockdown. While some studios were affected by the economic impact of the health crisis, other companies—especially those producing accessories and peripherals—saw growth, and online consumption figures broke records.
The gaming sector in general has sparked renewed public interest during this abnormal time, coinciding with the arrival of a new generation of consoles. The segments that benefited the most were online multiplayer games and mobile gaming—two platforms that, indirectly, also boosted another sector: professional video game competitions, or esports.
By the end of 2020, the industry saw global growth, dominated by the Chinese and North American markets, which continue to explore new monetization methods. It’s still too early to know what will happen next year or how a prolonged pandemic might affect the industry, but we’ve already seen some of the major future challenges it faces.
How Will We Play in the Future?
It wasn’t easy for experts at the turn of the millennium to predict the current state of gaming. No one could have foreseen the global impact of games like League of Legends or Fortnite, let alone the sudden boom of Fall Guys or Among Us during a global pandemic. Predicting the future is not a science, but we can identify key trends that will shape the way we play in the coming years.
First, the rise of mobile gaming will remain one of the fastest-growing trends. Mobile devices have the lowest barrier to entry, the highest growth rate, and have been among the least affected by the pandemic. According to Newzoo, the mobile sector will generate $77 billion in 2020, marking a 13.3% increase from the previous year. Its global success is evident in mega-hits like Call of Duty: Mobile, Fortnite, and PUBG Mobile, which have achieved massive worldwide popularity. GlobalData predicts that mobile gaming could eventually double the size of the PC and console markets.
We must also mention the continuous rise of online multiplayer gaming. Once just an optional mode, it’s now essential in many top games. This gameplay style is fueling the growth of another still-emerging segment: esports. Competitive gaming is poised to become one of the most popular forms of social entertainment in the coming years. Moreover, the rapid development of internet speeds and new network technologies ensures a bright future for this format.
The Future: Cloud Gaming, VR, and More
Cloud gaming is another trend expected to evolve significantly over the next decade, with the potential to redirect the industry in new ways. This will be complemented by ongoing hardware advancements, enabling increasingly realistic graphics and higher resolutions.
Virtual reality (VR) is also on the radar of industry experts for future development, alongside augmented reality (AR) and mixed reality (MR). Though VR was initially considered a hallmark of the previous console generation and somewhat sidelined in the current one, most experts agree it will eventually take a leading role in the industry—although it still needs time to fully consolidate. And we’re not just talking about headsets and goggles—haptic systems and other immersive technologies are also expected to emerge in the coming years.
Despite all these developments, imagining the gaming industry 10 years from now remains extremely challenging. The sector is currently engulfed in a console war that many believe will ultimately lead to a mature and established entertainment medium—one capable of moving enormous amounts of money.
