One of the few industries protected from coronavirus havoc has been the gaming industry. It is supposedly thriving despite worldwide lockdown. According to a report published by World Economic Forum, the global Video Gaming Industry is worth a whopping $159 Billion in 2020, around 4 times the size of box office revenues ($43 billion in 2019) and almost three times the music industry revenue (at $57 billion in 2019).
Gaming giants like Nintendo and Tencent saw massive surge in sales. Tencent registered a 41% increase in profit and 31% increase in year on year revenue. According to Gamesindustry.biz, increase in sales are expected to grow by more than 50% across all major markets. In a conversation with Microsoft CEO Satya Nadella, Mukesh Ambani, the richest Asian in the world, stated “For many of us who don’t know what gaming is, it is very hard to imagine but gaming industry will be bigger than music, movies and tv shows put together”. Facebook has reported huge increase in game usage hours by users and Microsoft reported increase in game time by 40% by consumers.
The revenue of gaming industry is completely dependant on consumer purchases. There has been a change in consumption patterns as nowadays consumers tend spend more time on a set of particular games rather than purchase and explore newer games. As a result, the gaming industry is focused on increasing the user engagement. The basic goal is to give the consumer a unique, thrilling & engaging experience while also attempt at in-app purchases. This additional downloadable content, commonly referred to as DLC in the gaming industry, majorly include expansion packs, new features, game currency, bundles.
The gaming industry has witnessed massive advancement in technology of gaming hardware, bandwidth and mobile internet. Such advancements have made the game playing experience more engaging across devices and platforms. It enables the gamers to enjoy a more seamless experience of the game across all touchpoints.
More than 40% revenue of the gaming industry now comes from mobile gaming. Activision Blizzard’s, Call of Duty, has been popular on consoles and desktop for years. Now the shooter franchise is a hit on Android and iOS mobile devices, thanks to Call of Duty Mobile. The game already has more than 150 million downloads with earnings 50% more than expected.
The emergence of cross-platform gaming has allowed players from different platforms and devices to play together at the same time. The growing popularity of cross-platform gaming is encouraging creators in the gaming industry to enter Cloud-Based video game market. Through this, the creators maintain compatibility of their games across various devices such as smartphones, laptops, tablets, and PCs.
Further advances in technology and the increasing adoption of smart devices are expected to boost growth of the gaming industry during the forecast period. Demand for high-end gaming is likely to remain popular, but services such as Arcade (Apple) and Game Pass (Microsoft) provide gamers with a large library of video games – often without the need for advanced hardware. Meanwhile, free-to-play games allow developers to monetise without needing to convince consumers to make up-front purchases. Instead, they offer in-game opportunities such as upgrades and expansion packs.
History tells us that cheap entertainment prospers during downturns. These low-cost, high-value offerings are a strong opportunities for the gaming industry to expand. Innovations in embedding technology in games seems endless and can offer unreal experiences to the gamers. While many industries face disrupted business operations, gaming industry is set to boom and prosper.
The gaming industry has come a long way in recent years. With newer advancements taking place, what the industry will shape into is worth watching out for.