The Gaming Market Will Surpass $200 Billion by 2023
Newzoo’s Analytics Platform forecasts that the games market will grow 19.6% to $174.9 billion this year. This number is $15.6 billion higher than the previous forecast, which was made early on in the pandemic. Armed with companies’ financial results for H1 2020, we can now see the impact of increased engagement on game spending more clearly.
But is it sustainable? Exactly how sustainable this growth is remains to be still discovered and is dependent on many factors. We anticipate that the market will continue to grow, generating $217.9 billion in 2023. Seems like great news?
The Big Bulls
Console and mobile gaming revenues are most boosted by the coronavirus pandemic, but when it comes to regions, the impact is spread relatively evenly.
In line with previous forecasts, China and the U.S. still represent 49% of the world’s games market in terms of consumer-generated revenues.
The Growth Drivers
While COVID-19 has impacted some aspects of development, the pandemic has not fundamentally changed the way games market operate — nor has it transformed player behavior. Rather, it has accelerated trends we have previously reported.
This acceleration results from the ongoing measures around the pandemic. With the population being encouraged to stay at home and limit social interaction, people have turned to gaming en masse.
Gaming has been a means for entertainment, escapism, and socializing and interacting with friends/family for many consumers, leading to unprecedented growth for the games market.
Previous Newzoo research shows that socializing was the #2 reason people have spent more time playing games during the pandemic. Therefore, it is unsurprising that games offering a social, fun, and competitive experiences have enjoyed huge engagement this year.
Mobile gaming is both the largest segment by revenue and growth. Mobile’s low barrier to entry — as well as the widespread availability of smartphones — make it an ideal place to start gaming for newer players across all regions.
Console, with our new forecast of $51.2 billion, is perhaps most affected. Console’s growth of +21.0% year on year is more than double the growth we previously forecast.
All Revenue Streams Were Impacted
Revenue adjustment affects forecast for every segment covered — PC, mobile, and console:
We now forecast that PC games will generate $37.4 billion in 2020, up from our previous forecast of $36.9 billion.
Games on mobile will generate $86.3 billion in 2020, up from our previous forecast of $77.2 billion.
Games on console will generate $51.2 billion in 2020, up from our previous forecast of $45.2 billion.
Future remains bright
The increased engagement and revenues resulting from the pandemic will ripple into 2021 and beyond.
The forecast is that the games market will to grow to $217.9 billion by 2023, representing a strong +9.4% CAGR between 2018 and 2023. This is up from our previous forecast of $200.8 billion.
Based on engagement metrics of the past months, we see that consumers are continuing to engage with gaming more than they did before the pandemic — even in markets where lockdown measures have long been lifted.
The first half-year of 2020 saw a peak in growth for the market. While some consumers may play less after the pandemic ends, all signs point to a significant chunk of revenue growth and engagement being permanent.
In a recent update, the World Bank issued its new estimates for 2020, correcting the market for the COVID-19 pandemic and an impending recession. Nevertheless, we will not judge the impact of a possible recession until we know more about the pandemic’s outcome.
Similarly, we are careful to predict how and when the world will exit the pandemic and — likewise — how that might affect spending on games.
We will continue to monitor the games market in the context of this worldwide event, updating revenue numbers as needed in our upcoming blogs. So stay tuned and keep gaming!
