The combined game industry grew 3% to $120.1 billion in 2019, according to market researcher SuperData in its year-end report. And Epic’s Fortnite battle royale shooter accounted for $1.8 billion of that amount.
The Nielsen-owned SuperData said the industry is moving into a phase of slower growth, with 4% growth expected to take games to $124.8 billion in 2020. The data includes mobile, PC, and console games, as well as augmented reality, esports, and virtual reality revenues.
Overall, the revenue of $120.1 billion in 2019 was up 4% from $115.5 billion in 2018. The 2019 revenue included $64.4 billion for mobile games, $29.6 billion for PC, and $15.4 billion for consoles. The remainder included $6.5 billion for game-related videos and $6.3 billion for XR, or extended reality games based on technologies such as virtual reality or augmented reality. (Total interactive media revenue is less than the sum of all segments due to overlapping earnings in games and XR segments. Pokémon Go revenue, for instance, is included in both the mobile games and XR segments).
SuperData said that gaming did not need games on the level of Fortnite or Red Dead Redemption 2 to continue expanding in 2019.
Free-to-play accounted for 80% of dollars spent on digital games in 2019, thanks to strong performances from mobile. Perennial chart-toppers like Candy Crush Saga and Honor of Kings pushed mobile’s share of free-to-play revenue to 74%, a trend that SuperData expects to persist in 2020.
Fortnite clinched the top spot for the second year in a row, generating $1.8 billion in 2019, compared to $2.4 billion the year before. The enduring popularity of Fortnite is partially attributable to crossover promotions with pop culture blockbusters like Avengers, Stranger Things and Star Wars, SuperData said.
SuperData said the premium games market dipped 5% in 2019 due to a gap year in triple-A game launches. There were fewer mega-hits than in 2018, which saw multiple big releases like Red Dead Redemption 2, Marvel’s Spider-Man, and Monster Hunter: World. The chance for mega-hits is higher in the last year of a console generation, as there are more machines in the market. But if those hits don’t happen, then sales generally decline in a console’s final year, bringing greater urgency to the launch of a new console.
Platform-exclusivity deals distributed top game video content (GVC) creators across livestreaming platforms. Mixer, YouTube and Facebook have all signed contracts with former Twitch streamers to attract a larger share of the GVC audience, which totals 944 million viewers worldwide.
XR revenue climbed 26% to $6.3 billion in 2019 thanks to new headsets like the Oculus Quest. Standalone headsets accounted for 49% of VR shipments and brought VR gaming to a more mainstream audience than existing PC and console devices.
SuperData predicts that digital games and interactive media revenue is on track to grow 4% to $124.8 billion in 2020.
Premium games will have their biggest year ever with $19.8 billion in 2020 revenue thanks to major releases in the first half of the year. Highly anticipated games like Cyberpunk 2077, The Last of Us Part II, and Animal Crossing: New Horizons will launch before focus shifts to next-generation consoles from Microsoft and Sony.
As the GVC audience surpasses one billion unique viewers, the war for streamers’ exclusivity will intensify in 2020. In the past year, the top Fortnite streamer, Ninja, made history as he left Twitch to sign an exclusive deal with Mixer. When watching GVC, viewers often pay just as much attention to the streamer as the game itself.
For example, 72% feel the entertainment value of the content creator is important when watching GVC, while 62% of viewers find it important to watch games they personally play. As the competition among GVC platforms increases, smaller ones will continue to seek out top streamers to increase their own popularity. Meanwhile, Twitch will look to lock in its talent by signing its own exclusivity deals.
Upcoming consoles from Microsoft and Sony will open up new avenues for digital gaming growth in 2020. The console market has experienced stagnation with flat revenue of $15.4 billion in 2019. However, a shift to next-generation systems represents a large expansion opportunity for digital games as powerful hardware enables new, more immersive experiences.
Steady improvements in internet speeds (85% of U.S. gamers now have speeds of at least 25 megabits per second) mean players will continue moving away from purchasing games on disc in favor of downloads on these new systems.