Video Game Market Size, Share & Trends Analysis Report 2020-2028
Global video game market was valued at USD 157.33 billion in 2020. They are expected to increase at a CAGR of 14.6% between 2020 and 2027. The key drivers of growth are expected to be technological proliferation and innovation in both software and hardware. Market growth prospects are expected to remain positive due to the increasing penetration of internet services and the ease of accessing games online around the world. The growth is also expected to be driven by game developers who are constantly pushing the technology limits in real-time rendering graphics in video games.
Industry participants have shifted their focus to hardware compatibility and efficiency as a result of the growing desire to play online games instead of physical games. Multiplayer games, such as Massively Multiplayer Online or Free2Play (F2P), have been growing in popularity and will continue to do so for the next eight years. Consumer spending is increasing due to rising disposable income. The changing preferences of consumers have resulted in the widespread adoption of advanced gaming consoles with more sophisticated features, such as record and play and cross-platform gameplay.
Market growth will be influenced by the growing popularity of social media gaming. A large percentage of the world’s population uses social networking sites like Reddit and Facebook for gaming. Customers will be attracted to the availability of various genres of gaming such as strategy, role play and simulation. The popularity of eSports tournaments, and the growing number of professional gamers is expected to drive up sales of video games and accessories as well as gaming hardware and software.
There is a high demand for video games in many areas, including educational institutions and corporate businesses. Gamification as an educational tool offers opportunities for cognitive and deeper learning. Gaming to learn is a concept that has existed for a long time. The actual potential for gamification in academia is only being discovered recently.
Market growth will be slowed by the rising popularity of counterfeit products, particularly in low-priced countries like China and Indonesia. Market growth will be affected by copyright and piracy concerns. The growth is also expected to be hampered by concerns about fraud in gaming transactions. Another factor that could limit growth is the rapid rise in problems and health issues related to video games.
While the COVID-19 pandemic continues its devastating effects on the global economy, the videogame industry is expected to experience remarkable growth in the coming months. Companies are seeing an increase in users and increased hours spent playing online games as governments around the world have mandated home quarantining. Many gaming companies are offering their online games free of charge. Activision Blizzard, Inc., for instance, released Call of Duty: Warzone in March 2020 as a free download. It received around 6 million downloads within a single day.
However, many companies are experiencing delays and interruptions in product launches due to the pandemic. Several press conferences that were originally scheduled to announce the latest trailers and announcements have been postponed. Game Developers Conference was originally scheduled for June 2020 but was delayed due to the increasing spread of COVID-19 pandemic. The pandemic had an impact on supply chains and hardware production. Many of these delays can be attributed to the closure of various Chinese manufacturing facilities, which are where many of these gaming products were made. Nintendo Co., Ltd. announced in February 2020 that it would delay the release of Nintendo Switch, originally scheduled for March 6, 2020, due to COVID-19.
With a market share of more than 35%, the mobile device segment led in 2019. It is expected to continue its dominance for the forecast period. This is due to increasing smartphone penetration around the world. Due to the advantages of larger displays and better viewing experiences, the mobile device segment will continue to grow. The growth prospects for handheld consoles will also be positive.
Over the forecast period, consoles are expected to grow at a significant CAGR. The console market will be driven by advantages such as high-end sound systems and displays that offer a richer experience for customers. The consoles are equipped with features that allow for online sharing and recording of in-game footage. The next-generation consoles offer dynamic simulation, which creates an immersive experience and allows the user to make an impact on the world.
Over the forecast period, online video games will gain popularity. Online games are becoming more popular due to the ease of playing multiplayer games and the ability to communicate with other players. Online video games have become more popular thanks to social networking sites.
Online segment demand will continue to grow due to growing awareness of interactive entertainment systems and a rising number gamers who are using gaming as an entertainment tool. The segment’s growth is also expected to be driven by the increasing penetration of smartphones and cloud gaming, among other things. The market players in the development and marketing of video game consoles place a lot of emphasis on the online gaming opportunities. Xbox Live by Microsoft Corporation, and PlayStation Network from Sony Corporation allow online gaming.
With a market share of more than 50%, the Asia Pacific was the dominant region in 2019, with over 50%. This is due to China’s rise as a gaming hub. This is due to the ever-increasing penetration of smartphones and growing demand for entertainment in China. Tencent Holdings Limited is headquartered in China and has further risen to become the largest player in the global marketplace owing its organic growth strategies such as the acquisition of Riot Games Oy and Supercell Oy. These companies are the developers of popular games like League of Legends or Clash of Clans. China’s overall growth has been aided by the company’s expansion.
Vendors are launching a variety of platforms to allow gamers access to AAA-rated games, due to the rising number of online gamers. Tencent and NVIDIA Corporation teamed up to launch START, a cloud gaming platform, in December 2019. Gamers can access AAA games from any device, anywhere, anytime with the new cloud gaming service. South Korea’s increased focus on esports and multiplayer online games is expected to make a significant contribution to regional growth. South Korea has seen a huge increase in popularity of massively multiplayer online role-playing gaming.
Market players are focused largely on developing engaging content and next-generation consoles. These players have developed popular consoles such as the PlayStation 4 by Sony Corporation, Xbox One and Wii U by Nintendo Co., Ltd. With a view to increasing their market share, market players are focusing on product differentiation and innovation.
Market leaders are placing significant emphasis on customer experience and offering multi-utility features to their products that allow users to simultaneously play games and surf the internet. This multi-utility gaming consoles will drive growth in the future. To remain competitive, the vendors are also looking at mergers and acquisitions of small- and medium-sized businesses. To accelerate game development innovation, Microsoft Corporation bought PlayFab in January 2018. The following are some of the most prominent players in the videogame market:
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