In our new Global Games Market Report quarterly update, we forecast that the games market will grow 19.6% to $174.9 billion this year.
This number is $15.6 billion higher than our previous forecast, which we 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.
Exactly how sustainable this growth remains to be seen and is dependent on many factors. We anticipate that the market will continue to grow, generating $217.9 billion in 2023.
Meanwhile, our Global Games Market Report subscription is now fully integrated into the Newzoo Platform. We expanded the service with an array of interactive tools that let users analyze trends and forecasts. We also added revenue data on the 100 public companies (by game revenues).
China and the U.S. Remain the Two Biggest Games Markets
Console and mobile gaming revenues are most boosted by the pandemic, but when it comes to regions, the impact is spread relatively equally.
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:
Escapism, Socializing, and Time Filling Drive Revenue Growth for the Games Market During the Pandemic
While COVID-19 has impacted some aspects of development, the pandemic has not fundamentally changed the games market—nor has it transformed player behaviour. 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 game 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 experience have enjoyed huge engagement this year.
Among Us and Fall Guys (read our deep dive here) are just two examples of new games that tick these boxes. Both titles became some of 2020’s biggest hits.
All Revenue Streams Were Impacted
Our revenue adjustment affects our forecast for every segment we cover—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 the console will generate $51.2 billion in 2020, up from our previous forecast of $45.2 billion.
Mobile gaming is 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.
Following the usual trend prior to new generation releases, we’d expect console revenues to be lower in anticipation of the launch of the incoming next-generation consoles. But the pandemic has resulted in the opposite.
We attribute console’s unprecedented growth to the accessibility of consoles, whose plug-and-play nature, marketing budgets, and retail presence give it an edge compared to PC gaming—for new and returning players alike.
Console game revenues for publicly listed companies grew nearly +30% in H1 2020, reporting more than +20% year-on-year growth in every major region. The console market is largely in the hands of publicly listed companies.
Therefore, their results are an excellent proxy for growth in the console segment. Luckily, Global Games Market Report subscribers can go to the Newzoo Platform for a top 100 ranking of public game companies (by revenues).
The Future Remains Bright: The Games Market Will Soon Have Its First $200 Billion Year
The increased engagement and revenues resulting from the pandemic will ripple into next year and beyond.
We now forecast 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 quarterly updates—as we always do.