Video Games Market Value to Grow to Over $200 billion by 2023, Despite Declining Purchase Revenue

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A new report from Juniper Research found that the video games industry will exceed $200 billion in value in 2023; growing from an expected $155 billion in 2020. Mobile and cloud gaming will lead this growth, as the market shifts further towards recurring revenue, and purchase revenue declines by 5% over that period.

Games Subscriptions a Long-term Promise

The new research, Video Games: Industry Trends, Monetisation Strategies & Market Size 2020-2025, notes that the popularity of F2P (free-to-play) games like Fortnite and Call of Duty Mobile is intensifying the move to in-game monetisation.

The report shows that cloud gaming and other video games subscriptions will grow at an average rate of 9% per year; bringing in over $8 billion of revenue in 2023. However, this will not immediately compensate for declining purchase revenue.

Video Games Market Value to Grow to Over $200 billion by 2023, Despite Declining Purchase Revenue
Photo by Alexey Savchenko

‘At current gaming subscription prices, it will take an average of ten months of a subscription payment to cover the retail cost of a single AAA game,’ remarked research co-author James Moar. ‘The value of these platforms lies in keeping players within an ecosystem; ensuring that revenue across multiple games is captured by a single platform.’

F2P Games Changing the Landscape

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Thanks to gamers signing up to subscription services like EA Access, Google Stadia and Xbox Gamepass and buying fewer standalone games, only mobile games will see a net increase in games installs between 2020 and 2023.

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However, 99% of mobile game downloads in the next three years will be F2P. We anticipate less than 50% of PC game installs over that period to be paid for, due to a combination of game giveaways and F2P business models.

PC games will be the most lucrative segment for in-game purchases; approaching $32 billion in 2023. While mobile games will have more purchases, higher-value game expansion purchases will keep PC in-game revenue growth strong.

Smartphone in-app revenue will grow at an average of 8% over the forecast period, as smartphone gaming in emerging markets grows.

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Juniper Research provides research and analytical services to the global hi-tech communications sector; providing consultancy, analyst reports and industry commentary.

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Video Games Market Value to Grow to Over $200 billion by 2023, Despite Declining Purchase Revenue - Brand SpurVideo Games Market Value to Grow to Over $200 billion by 2023, Despite Declining Purchase Revenue - Brand Spur
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Video Games Market Value to Grow to Over $200 billion by 2023, Despite Declining Purchase Revenue - Brand SpurVideo Games Market Value to Grow to Over $200 billion by 2023, Despite Declining Purchase Revenue - Brand Spur

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- Advertisement -Video Games Market Value to Grow to Over $200 billion by 2023, Despite Declining Purchase Revenue - Brand SpurVideo Games Market Value to Grow to Over $200 billion by 2023, Despite Declining Purchase Revenue - Brand Spur