In the 21st century, gaming has changed a lot.
It was previously seen as a predominantly male activity, enjoyed mostly by those in the 18-30 category. More recently, things have changed with Nintendo opening the sector up to different demographics with the Wii and DS.
Smartphones have also played a significant role in this, allowing for the creation of the casual gaming niche.
Since the 2008-09 financial crisis, the global video game industry has enjoyed continued revenue growths, rising from $60 billion in 2009 to $108.9 billion in 2017. In 2019, this was forecast to be somewhere around $200 billion.
The growth of gaming in the last couple of years can be mostly attributed to mobile titles. Demand for these increased by 150% in 2019, with revenue from these games alone reaching $100 billion.
With such strong growth, can 2020 continue the trend to make it the most profitable year for gaming yet?
Console Gaming
Until 2017, console and PC gaming made up the largest proportion of the gaming industry. Since 2018, it’s been overtaken by mobile.
This doesn’t mean that consoles aren’t still a significant factor on the performance of the industry. They still account for around one-quarter of all gaming revenues, and 2020 could see it grow.
In the coming months, Microsoft and Sony will launch their next generation of consoles: the Xbox Series X and PlayStation 5. This will see the traditional Christmas rush and fans scramble to get their hands on the latest device.
By the end of the first quarter of 2021, Sony expects to have sold 6 million PlayStation 5 consoles, while Microsoft is predicted to sell around 3 million units of its new gaming machine. This will generate around $5 billion of revenue for the two companies, and that’s before all the peripherals, subscriptions, and games are sold.
Mobile Gaming
Mobile gaming is the juggernaut behind the growing gaming industry. The free-to-play format has been behind much of this growth, with nearly 85% of all gamers saying that they download new free games each year.
Meanwhile, only half of mobile gamers are willing to pay to download a new title, showing that free-to-play is key to acquiring new customers. This can be seen in the fact that downloads of hyper-casual free-to-play games increased by 150% in 2019. Other free games, like Call of Duty and Fortnite, also performed exceptionally well.
After launching in October 2019, Call of Duty: Mobile broke records when it received more than 100 million downloads in its first week.
This huge demand has only continued into 2020 though. In the second quarter of 2020, Call of Duty: Mobile saw record in-game sales and downloads. Mobile gaming as a whole has also increased in 2020, rising by 17% in the first few months of the year. Casual games enjoyed even more growth, with downloads increasing by 30% in 2020.
Online Casino Gaming
As with other types of gaming, online casinos continue to grow in popularity throughout the world. In New Jersey, iGaming brands matched their all-time record monthly revenue in June, generating $85 million from customers playing the wide selection of online casino games available in the state. The North American market is the fastest growing in the world, though much of the United States still does not permit online wagering.
In Europe, most markets have remained steady throughout 2020, on top of record figures in 2019. With more people opting to play games like slots, roulette, and blackjack online over physical casinos and betting shops. This is most visible in the UK where online casinos are growing while betting shops, which often house video slot machines, are closing.
Esports
Esports has two effects on the growth of the gaming industry. The first is that it is an excellent marketing tool for video games, helping to attract new players after they’ve seen it in action. This is why companies like Activision Blizzard and Tencent are investing heavily in competitive gaming.
Secondly, it provides revenue on its own. In 2019, esports generated more than $1 billion of revenue for the first time. As more sponsors look to associate their brands with these popular events, the revenue is expected to increase.
While 2019 provided a tough act to follow, 2020 could be even more profitable as more and more people play games and spend more money to do it. The industry doesn’t look like it’s going to slow down any time soon.
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