This year, the global video games market will reach $159.3 billion, a 9.3 percent increase year-over-year, according to Newzoo’s annual global games report.
The pandemic has accelerated the growth of the already steadily rising gaming market.
Since stay-at-home orders were implemented, most game segments have seen an increase in engagement and revenues. Mobile games, the largest segment in 2020, will generate $77.2 billion in revenue—$63.6 billion from mobile games and $13.7 billion from tablet games—growing 13.3 percent YoY. Console games, despite being adversely affected by the pandemic, will generate $45.2 billion, a 6.8 percent growth YoY. Downloaded/boxed PC games will reach $33.9 billion, a 6.7 percent growth YoY.
The only segment that will see a decline is browser PC games, at $3 billion. This 13.4 percent decrease YoY is a result of browser games transitioning to mobile.
By the end of 2020, Newzoo says there will be 2.7 billion gamers worldwide—2.5 billion playing on mobile, 1.3 billion playing on desktop and 800 million on console—an increase of over 135 million from the previous year driven by emerging markets in Asia, the Middle East and Africa.
Dominating the global games market is Asia, which will generate revenues of $78.4 billion, accounting for 49 percent of the market and representing a 9.9 percent growth YoY. The 1.4 billion total players there will account for 54 percent of all players worldwide.
The second largest region by revenues will be North America, which will account for a quarter of this year’s global games market at $40 billion, or an 8.5 percent increase from last year. However, the US will have the fewest players of any region this year (210 million).
Europe, the second most mature gaming market after the US, follows closely with $29.6 billion, a 7.8 percent growth. There are 386 million players there.
Gaming will increase in Latin America by 10.3 percent to $6 billion, making up four percent of the market this year. The region includes 266 million players.
The Middle East and Africa will reach $5.4 billion, a 14.5 percent increase. Combined, the regions have 377 million players.
Many new players in the aforementioned growth markets, however, have entered gaming via mobile, whose free-to-play business model makes it difficult to convert them into payers and eclipses the growth of paid games on mobile. In-game transactions accounted for 98 percent of mobile game revenues. Newzoo sees the figure reaching 100 percent in the coming years.
Newzoo also expects full-game revenues to be marginalized by the increase of in-game revenues, which will be a focus of publishers and developers as subscription revenues replace full game sales.
By 2023, Newzoo predicts the games market will reach $200.8 billion, with the number of players worldwide surpassing the three-billion mark.
Given the inherently social experience they provide, gaming platforms will continue to undergo a cultural shift into fully functional social networks. Whereas before younger generations ditched traditional media for social media, now they’re leaving behind social for the interactive experiences gaming can offer. Amid lockdowns, gaming became even more popular as people searched for alternative ways to socialize.
Another trend expected to shape the games market is next-generation consoles like Xbox Series X and PlayStation 5 leading to new business models. If these brands’ cloud gaming services can replicate the experience of playing on next-generation consoles, a monthly fee will act as an alternative to a console’s upfront cost.
Gaming has also proved to be a viable alternative to in-person events. In April, Fortnite displayed this ability to bring people together in lockdowns when it hosted a virtual Travis Scott concert, which drew in 12.3 million viewers.
The globalization of China’s games market will also influence the industry. In 2018, China’s games market was disrupted by a nine-month-long licensing freeze. To offset the fallout and lost revenue, Chinese game companies shifted their focus to overseas markets after having long operated in a vacuum. As a result, Chinese companies are now creating development studios for all platforms around the world.
Findings are based on a survey Newzoo conducted in February and March 2020 among over 62,500 invite-only respondents, between the ages of 10 and 65, across 30 countries.
