The global gaming market (hereafter referred to as the market studied) was valued at USD 173.70 billion in 2020, and it is expected to reach a value of USD 314.40 billion by 2026, registering a CAGR of 9.64% over 2021-2026. Due to nationwide lockdown, people stay home, and some turn to game platforms to pass the time. These platforms are attracting more than hundreds and thousands of new visitors in online traffic. Video gaming trends have experienced a massive surge in players and revenue recently. Companies like Microsoft, Nintendo, Twitch, and Activision have all reached new heights in player investment. In April 2020, Microsoft reported that subscribers to Xbox Game Pass, a Netflix-like subscription service, topped 10 million. Among those subscribers, Microsoft also reported a 130-percent increase in multiplayer engagement across March and April.
- Cloud gaming is an emerging technology across the industry that allows users to stream high-end games across hand-held devices, such as laptops, tablets, and mobiles, with fast network connectivity, eliminating the need for a dedicated gaming console/PC.
- Cloud gaming services are focused on leveraging hyper-scale cloud capabilities, global content delivery networks, and streaming media services to build the next generation of social entertainment platforms. Such factors have an anticipated positive impact on market growth.
- 5G is also driving the mobile-based VR gaming market. For instance, in May 2020, Archiact announced its partnership with Migu (a subsidiary of telecom provider China Mobile) for Archiact's games that would be the first VR games to be playable via Migu's 5G cloud gaming platform, named Migu Quick Gaming. Also, by partnering with Migu, Archiact states that it can work together to build the future of 5G VR cloud gaming, making VR even more accessible.
- Moreover, the increasing applications of immersive technologies, such as virtual reality, augmented reality, and mixed reality, are anticipated to be a cornerstone in the gaming industry. Companies such as BigScreenVR and AltspaceVR are some of the prominent players in this segment.
- According to NewGenApps, by 2025, AR and VR games' global user base is estimated to increase to 216 million users. According to a worldwide survey of technology company executives, startup founders, and investors, 59% of the respondents believe that gaming will dominate the investment directed to the development of VR (Virtual Reality) technology.
- Some of the market's prominent vendors are also focusing on expanding their product portfolio, releasing new games and consoles in the market in multiple formats. For instance, Sony Interactive Entertainment (SIE) announced the PC port of its 2017 release, Horizon Zero Dawn, and confirmed the release of Death Stranding on PC post its PS4 premiere. Sony also unveiled the PlayStation 5, which features an enhanced controller and visual capabilities to improve the User experience.
- Microsoft unveiled their competitor lineup consisting of the XBOX Series X and the XBOX Series S for the budget segment. At the same time, Nintendo accentuated the growth of the Nintendo Switch Lite in 2020.
- In August 2020, AGS announced an agreement under which the leading game content supplier Intouch Games Ltd, through its Slot Factory content-development brand, would provide game content for AG S' real-money game aggregation platform serving many of the world's largest online real-money gaming operators.
Key Market Trends
Smartphone is Expected to Witness Significant Growth
- Smartphone gaming has increased in the past couple of years. Worldwide, there has been the development of a global average of 1.5 million mobile game players in 2020. This increasing demand for mobile games directly results from various technological advancements such as AR, VR, cloud gaming, and 5G. This trend is not surprising, considering the mobile game industry primarily relies on new technology. Another trend in the market includes the rise of the hyper-casual game genre.
- AR is becoming perfect for mobile gaming, owing to its immersive and interactive nature of technology. Moreover, mobile games are the most popular AR category in app stores. Apart from previously released AR mobile games that are still popular, such as Pokémon Go and Ingress, multiple new additions to the genre are being made by players in the market, such as Harry Potter: Wizards Unite and Minecraft Earth.
- Moreover, large companies that create games for consoles and PCs are also releasing their games in the Mobile version due to the increasing mobile games market. The most played mobile game of the year 2020 was PUBG Mobile. The franchise’s transition into mobile gaming was seamless, and the results were also quite good. Although the game faced backlash in India because of its Chinese roots, the game rebranded itself to be easily accepted in the Indian market.
- The evolution of cloud gaming is an emerging technology across the gaming industry, which allows the user to stream high-end games across hand-held devices, such as tablets, and mobiles, with fast network connectivity, thereby eliminating the requirement of regular hardware upgrades or a gaming console/PC/laptops.
- The release of 5G and unlimited data plans are also expected to be key factors toward the success of cloud gaming across the world, as most gamers today prefer games on their mobile devices. The increasing services and investment in 5G infrastructure are important toward this success. According to Ericsson, the number of 5G mobile subscriptions in the Asia-pacific region is anticipated to reach around 1,545 million by 2025.
- With 5G services launching across multiple countries in the region, it is expected that cloud gaming services would also increase in the market, leveraging the mobile ubiquity and fast 5G connections in order to provide AAA quality gaming to smartphone users. Cloud gaming services from game publishers and mobile network operators would also drive the adoption of cloud gaming on mobile devices.
- Further, Free-to-play is the pricing model preferred by most mobile game developers due to its unlimited potential and downloading without any charge. This helps players sample the game before deciding whether they want to spend time or money and tend to accrue higher revenues.
- Games, such as Pokémon GO, are following the free-to-play game model, and according to the Bank of America, in the US in 2016, 27 million users were playing Pokémon GO. It is expected to cross over 67 million by 2020. In the Asia Pacific region, the number of players is set to expand from 84 million to around 311 million in the same timeframe. Therefore the increasing number of users is anticipated to have a positive outlook on the market.
Asia Pacific to Hold the Largest Market Share
- The Asia Pacific region is anticipated to hold the largest market share in the gaming industry, where countries such as China, Japan, and South Korea show a high potential in market growth. The Chinese enterprises are ready to embrace the business opportunities brought by global digitalization due to the rise in the digital ecosystem. At the end of the year 2019, the government of Beijing, the country's capital and home to more than 20 million people, announced its plan to become the international capital of online games latest by the year 2025. The primary plan is to create a strategy that is built around a pretty aggressive revenue target, with the local government also involved.
- China is one of the major countries in the Asia Pacific, which has a growing technological adoption. The country is home to one of the fastest internet bands and strong players like Tencent and NetEase, Tencent, and others. The country's growing exports and constant innovation practices in new games and consoles are major drivers of gaming in the country.
- The rapid growth of mini-games played within mobile apps, such as WeChat, without installing another application is aiding the growth of the gaming industry in China. Such mini-games, which tend to have strong social elements, are easy to play and have attracted many followers across the country.
- For instance, In February 2021, WeChat announced that it plans on further integrating mini-games with video streaming and PC in the fiscal year 2021 while further developing in-app purchasing.
- One of the primary drivers resulting in the growth of the Chinese gaming industry is the rapidly rising popularity of E-sports. According to the Game Committee of the Publishers Association of China, the revenue from the eSports market in China increased from CNY 94.3 billion in 2019 to CNY 136.56 billion in 2020.
- Japan is one of the prominent players in the gaming market in the world after China and the United States. With the rapid growth of technological adaption and the presence of many leading gaming companies, such as Sony, Nintendo, Konami, others, for decades in the country, the country's gaming market is evolving and expected to grow significantly during the forecast period.
- The handheld and home video game consoles hold a prominent share of the country's gaming market. According to Famitsu, up till 2020, Nintendo Switch accounts for 11.35 million unit sales of consoles, followed by PS4 with 7.59 million-unit sales, new 3DS LL with 5.89 million-unit sales.
- The country is witnessing many acquisitions and partnership strategies by prominent players to expand their foothold in the region. For instance, in May 2020, Tencent Holdings is buying a 20% stake in Japan's video game, Marvelous, and will become its largest shareholder. It will spend around USD 65 million acquiring shares from Marvelous and its largest shareholders.
- The government in the country is planning to expand Japan's esports industry with the private sector to help revitalize regional economies and increase social participation by people with disabilities, with an eye to generating JPY 285 billion in economic benefits a year by 2025.
The Gaming Market is highly fragmented as the demand for online games and increasing penetration of mobile applications across the various region is catering to an intense rivalry in the market. Key players in the market are Sony Corporation, Microsoft, Nintendo, etc. that try to keep innovating and releasing next-generation gaming consoles provides significant competition among the rivals.
- February 2021- Electronic Arts Inc. acquired Codemasters, a racing game platform, to expand its racing games and expects to launch a new racing game every year. The existing franchises of Codemasters, including Formula 1, DIRT, Project CARS, and GRID, were absorbed into EA’s portfolio, which consists of Need for Speed, Real Racing and Burnout.
- February 2021- EA sports announced the partnership with Criterion, DICE, and DICE LA for the launch of the Battlefield game by 2021. The project is moving toward the franchise’s earliest Alpha and will fully utilize the next-generation consoles.
- March 2021- The company announced the launch of Madden NFL 21, which is packed with new features like Face of the Franchise: Rise to Fame, Superstar X-Factors 2.0, and innovative gameplay enhancements.
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
1.2 Scope of the Study
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitutes
4.2.5 Intensity of Competitive Rivalry
4.3 Technology Snapshot
4.4 Assessment of the Impact of COVID-19 on the Market
5.1.1 Rising Internet Penetration
5.1.2 Emergence of Cloud Gaming
5.1.3 Adoption of Gaming Platforms, such as E-sports Betting and Fantasy Sites
5.2 Market Restraints
5.2.1 Issues, such as Piracy, Laws and Regulations, and Concerns Relating to Fraud During Gaming Transactions
6.1.4 Downloaded/Box PC
6.1.5 Browser PC
6.2.1 North America
220.127.116.11 United States
18.104.22.168 United Kingdom
22.214.171.124 Rest of Europe
6.2.3 Asia Pacific
126.96.36.199 South Korea
188.8.131.52 Rest of Asia Pacific
6.2.4 South America
184.108.40.206 Rest of South America
6.2.5 Middle East and Africa
220.127.116.11 United Arab Emirates
18.104.22.168 Saudi Arabia
22.214.171.124 Rest of Middle East and Africa
7.1.1 Sony Corporation
7.1.2 Microsoft Corporation
7.1.3 Apple Inc.
7.1.4 Google LLC (Alphabet Inc.)
7.1.5 Bandai Namco Entertainment Inc.
7.1.6 Take-Two Interactive Software Inc.
7.1.7 Nexon Company
7.1.8 Nintendo Co. Ltd
7.1.9 Activision Blizzard Inc.
7.1.10 Electronic Arts Inc.
7.1.11 Ubisoft Entertainment SA
7.1.12 Square Enix Holdings Co. Ltd
7.1.13 ZeptoLab OOO
7.1.14 Tencent Holdings Ltd
7.1.15 Sega Games Co. Ltd
7.1.16 Capcom Co. Ltd
7.1.17 NetEase Inc.
7.1.18 Interactive Entertainment
7.1.19 Beijing Kunlun Technology Co. Ltd
A selection of companies mentioned in this report includes:
- Sony Corporation
- Microsoft Corporation
- Apple Inc.
- Google LLC (Alphabet Inc.)
- Bandai Namco Entertainment Inc.
- Take-Two Interactive Software Inc.
- Nexon Company
- Nintendo Co. Ltd
- Activision Blizzard Inc.
- Electronic Arts Inc.
- Ubisoft Entertainment SA
- Square Enix Holdings Co. Ltd
- ZeptoLab OOO
- Tencent Holdings Ltd
- Sega Games Co. Ltd
- Capcom Co. Ltd
- NetEase Inc.
- Interactive Entertainment
- Beijing Kunlun Technology Co. Ltd