The global games market is expected to grow from $137.9 billion in 2018 to more than $180.1 billion in 2021, according to market researcher Newzoo.
Those numbers are more optimistic than in the past, and they reflect the constant growth of platforms, such as smartphones. This year, mobile games are expected to hit $70.3 billion — or 51 percent of the total — and they will grow to $106.4 billion by 2021 — or about 59 percent of the total. Newzoo estimates there are about 2.3 billion gamers across the globe.
The 2018 total for the global games market will rise 13.3 percent — or $16.2 billion — from $121.7 billion in 2017. About 91 percent of the global market is digital, meaning that $125.3 billion worth of games flows through digitally connected channels as opposed to physical retail.
In total, mobile revenues will grow 25.5 percent in 2018 from 2017 to reach $70.3 billion. This means that for the first time, more than half of all game revenues will come from the mobile segment, Newzoo said. Smartphones will account for 80 percent of this segment — or $56.4 billion — with the remaining 20 percent coming from tablets.
Console gaming is the second-largest segment generating $34.6 billion in 2018 while PC games will bring in $32.9 billion.
The forecast for 2021 represents a compound annual growth rate (CAGR) of 10.3 percent between 2017 and 2021.
Considering that global games market revenues were $70.6 billion in 2012, this puts the 10-year CAGR for the market (2012–2021) at 11.0 percent. Maintaining a double-digit growth rate for 10 years is truly remarkable; it would be an accomplishment for a single company, let alone an industry that has been around for multiple decades, Newzoo said.
In the span of a decade, mobile gaming will have grown from the smallest segment in 2012 to a 100-billion-dollar industry in 2021. Remarkably, the rise of mobile gaming has not significantly cannibalized revenues from PC or console gaming markets.
Both PC and console games have shown steady growth over the past few years. This year, console will generate $34.6 billion and capture 25 percent of the market. PC gaming will generate $32.9 billion, making it the smallest gaming segment with a 24-percent market share.
Downloaded/boxed PC games will grow with a CAGR of +4.2 percent from 2017 to 2021, generating $32.3 billion in 2021.
Newzoo expects engagement with PC games to continue to grow, driven by competitive play and esports, but this will only partially translate to higher revenues for several reasons.
Some of the most popular titles are already operating at close to their full monetization potential and, at the same time, are unlikely to be displaced by new games soon.
In addition, average prices for pay-to-play PC games have been declining in recent years, putting downward pressure on the segment’s overall revenue growth. The total PC gaming market will grow at a CAGR of 1.8 percent between 2017 and 2021, as the continued shift from browser PC to mobile games cuts revenues from the browser segment in half between 2017 and 2021.
Newzoo expects the console segment to grow if publishers continue to improve in-game spending options while retaining the upfront price. Furthermore, the console segment will fully embrace live streaming and esports by 2021, further driving player engagement. Newzoo forecasts the console segment to grow to $39 billion in 2021 with a CAGR of 4.1 percent.
The Japanese gaming market will still be the third-largest in the world in 2018 (behind the United States and China), growing 15.1 percent year on year to $19.2 billion. Due to the continued success of mobile gaming companies in Japan, Newzoo increased its estimate for Japan’s mobile games market for the second time in a year.
This means Japan’s mobile games market is now nearly the same size as North America’s with roughly one-third of the number of gamers. In fact, Japanese gamers spend the most out of any country, particularly for mobile games. The average spend per payer in Japan is 1.5 times higher than in North America and more than 2.5 times higher than in Western Europe.
China alone will account for more than one-quarter of all global game revenues, reaching $37.9 billion this year. It will remain the number one gaming market by revenues and by number of players. Mobile is the dominant force and will generate 61 percent of revenues in 2018, growing to 70 percent of the market by 2021.
In total, the Asia-Pacific territories will generate $71.4 billion — or 52 percent of total global game revenues. This represents a 17 percent year-on-year increase, nearly all of which is attributable to mobile; the segment will grow $9.7 billion year on year to $44.7 billion in 2018.
The Asia-Pacific territories are a primary driver of continued growth for the global games industry, as the number of smartphone users in emerging markets, such as India and Southeast Asia, grows exponentially and, at the same time, the willingness to spend on mobile games grows in more established markets like China and Japan.
North America is the second-largest region, with estimated revenues of $32.7 billion in 2018, a year-on-year increase of 10 percent. Most of this growth will come from smartphone gaming and, to a lesser extent, console gaming.
Newzoo sees the same trends in Europe, the Middle East, and Africa — which, as a combined region, is expected to reach $28.7 billion in 2018. In European countries, mobile gamers are less willing to spend than Americans, with the average spend per payer in North America 1.6 times as high as in Europe. This is offset, however, by the steadily growing smartphone population in the Middle East and Africa. Latin American game revenues will grow to $5 billion this year.