Gaming Around the Globe
Gaming is an entertainment beast unlike any other.
With a current global player base of 3.198 billion, the gaming industry has captured the hearts and minds of nearly half the world population. From millionaire Twitch streamers to professional esports players, one-person indie development studios to multi-national gaming conglomerates, gaming has developed into a diverse and ever-expanding global industry.
Already larger than the international box office and music sector combined, the gaming industry is predicted to generate $196.8 billion in 2022, a growth of 2.1% when compared to last year. The final competitor for gaming to overtake in yearly total revenue within the entertainment sector is that of Pay TV and Advertising. After COVID-19 caused immense damage, the TV industry is expected to continue stagnating, after a decline in 2020. Meanwhile, the gaming industry is continuing to grow and is predicted to earn over $225 billion by 2025.
When analysing the industry by segment, Mobile gaming continues to dominate the global games market as it earns 53% of total global gaming revenue. This majority of the proverbial gaming pie accounts for an incredible $103.5 billion alone and is expected to extend its lead as the Asia-Pacific and the Middle East and Africa regions begin to access increasingly reliable mobile infrastructure. On the other hand, console gaming is starting to lose its share of the market, down 2.2% from 2021. From disrupted supply lines and supply shortages to studios having to adapt to new working from home environments, consumers can feel the pinch as Xbox Series X and PlayStation 5 consoles are struggling to meet production quotas. PC’s have also been affected by the shortage in semiconductor chips and have stagnated in the market as a result. With a 1.6% growth in downloaded/boxed PC game sales, home computers are only just managing to stay afloat in the competitive gaming market.
Upon further investigation, industry statistics reveal that 82% of revenue from the digital game market is generated by the free to play (F2P) model. In 2020, 99 of the top 100 grossing mobile games in the USA were F2P. Although containing the word ‘free’, these games generate income through in-game transactions such as loot boxes, downloadable content, and premium subscriptions. In-game advertising is also a prevalent revenue stream and is widely used in mobile gaming. As for the ‘traditional’ paid games market, Steam continues to maintain its position as the most popular game store in the world. However, this status is being challenged as alternatives like COG.COM, Humble Bundle, the Xbox app, and the Epic Games Store increase their market share by offering exclusive games, extra rewards and other benefits.
As for dominant gaming organisations, the gaming industry has produced many global conglomerates with billions of dollars to their name. Taking home 1st place in total yearly revenue is the Chinese giant Tencent, which reportedly earned $32.2 billion in 2021. Essentially accruing a monopoly on the Chinese market Tencent also owns significant shares in Riot Games (100%), Supercell (84%), Epic Games (40%), Krafton Inc (11.5%) Activision Blizzard (5%), Ubisoft (5%) and many more. This implies that Tencent owns or has created, League of Legends, Valorant, PUBG Mobile, Ring of Elysium, Honor of Kings, and ArcheAge to name a few. Sony takes the silver medal with a total yearly revenue of $18.2 billion. A significant majority of its revenue is produced through Playstation 5 console sales, however it also accumulates income by creating and publishing various video games such as Gran Turismo, The Horizon Series, The Last of Us, Marvel’s Spider Man, and Ghost of Tsushima. Apple is placed 3rd with $15.3 billion primarily resulting from their mobile gaming strategy and a new focus to increase the capacity of their Macs to compete with PC’s. Microsoft and Google follow thereafter with $12.9 and $11 billion respectively. Although Nintendo came 8th when referring to total yearly revenue in 2021 with $8.1 billion, the Japanese studio can claim to create the bestselling game franchise of all time with Mario having sold over 740 million individual copies since its first release in 1985.
Rising within the gaming space is the international esports scene. With a current viewer base of 532 million, these numbers are expected to balloon to 640 million by 2025. Since the competitive environment developed in the early 2000s, North American esports teams such as Faze Clan, Team Liquid, Cloud9, and TSM have been dominating the world stage. This has created a narrative of European teams like G2 Esports, Team Vitality, and Fnatic as well as Asia-Pacific teams such as PSG.LGD, Gen.G and T1 who are seeking to challenge the traditional American supremacy. These teams compete across various titles which include Counter-Strike: Global Offensive (CS:GO), League of Legends (LoL), Dota 2, Fortnite, PlayerUnknown’s Battlegrounds (PUBG), Super Smash Bros, and FIFA to name a select few. By attracting millions of viewers, accruing $1.38 billion of revenue in 2022, and establishing a whole new era of virtual sporting events, esports is making its mark on the world stage.
With countless reports of growth, ever-expanding industry sectors, new innovations, and an increasing audience base, the gaming industry is set for success to become the number 1 in world entertainment.