An exciting time of change

The last 20 years have brought a remarkable transformation and evolution for the gaming industry as a whole. The 90’s kids still remember the early days of gaming, where video gaming consoles like Sega Mega Drive and Nintendo were the thing that every little kid dreamed about. In case you don’t really know what a Sega Mega Drive looks like and what kind of games were able to be played on it, then I can assure you that if you see one of them today you wouldn’t be too impressed. However, at the turn of the new millennium these were the only devices and games that people had available to entertain themselves at home.

Let’s fast forward to nowadays and see how things have changed for this rather short period of time, as the gaming industry has continued to grow at a tremendous rate year after year. One of the interesting phenomenons in recent years that has somewhat contributed to the industry’s strong growth apart from the technological improvements has been the change in gaming age demographics. While couple decades ago, video gaming was mostly meant for and used by kids, nowadays statistics show that the age groups under 18 and 50+ share the same overall passion and usage of the gaming industry. The age demographic group with the heaviest gaming usage is indeed the one between 18-35 years of age, as these are the very same millennials that we talked about earlier, who still remember what the early days of gaming looked like and are now completely fascinated with all of the online gaming options that they have today.

Why is the change in age demographics an important determinant for the overall growth of the gaming industry? Well, firstly when older people join the gaming industry their longevity as users tends to be much longer as their interests are already defined and if they find a certain segment that interests them deeply, they will usually dive in that segment at a much deeper level than what a younger person would do. Secondly, older people generally have a better financial position and a higher purchasing power than youngsters, which once again leads to higher revenues for the industry.

General Market Overview

The global gaming market was valued at USD 151.55 billion in 2019 and is expected to see a consistent CAGR of 9.17% in the next 5 years. This will help the industry to reach a value of USD 256.97 billion by 2025 Game developers across emerging economies are continually striving to enhance gamer’s experience, launching, and rewriting codes for diverse console/platforms, such as PlayStation, Xbox, and Windows PC, which are incorporated into one product provided to the gamers through the cloud platform.

Source: Statista.com

The emergence of cloud gaming is driving the market. Recent advances in advanced cloud technology have turned the idea of cloud gaming into reality. In cloud gaming, the server, where all the games are stored, does all the computation work, which includes game scene rendering, game logic processing video encoding, and video streaming. Several companies such as Onlive, G-Cluster, StreamMyGame, Gaikai, and T5-Labs are already offering commercial cloud gaming services.

Though people have been talking about it for years now, it is now inevitable that virtual reality will become a major cornerstone piece of the gaming industry. By 2020, players will spend USD 4.5 billion on immersive gaming. It is 20 times more enjoyable and convenient than traditional alternatives. Companies like BigScreenVR and AltSpaceVR are two of the leaders in this industry today, accelerating a virtual future perhaps faster than many expect. Market.

Industry innovations and trends

The collision of blockchain technology and gaming holds great promise for the growth of both industries. Blockchain as a technology provides a useful tool for gamers for various reasons including decentralized asset exchanges, verifiable scarcity of virtual objects and collectibles, fast and secure payment networks, and an ability for developers to properly monetize their creations.

The rising internet penetration on a global scale is driving the demand of the market. The number of people with access to the internet in emerging markets has grown dramatically in the past years, due to the global expansion of Chinese smartphone manufacturers offering affordable smartphones and local government investment in mobile internet infrastructure. GlobalWebIndex’s data also indicates that more than 1 billion people around the world now stream games over the internet each month. The latest numbers indicate that almost a quarter of all internet users, more than 1 billion people watch livestreams of other people playing games each month. Additionally, the introduction of the new 5G wireless networks will also play a huge positive role for the future growth of the gaming industry, as the newly improved networks will deliver up to 20 times faster speeds and much lower latency timeframes. This will inevitably improve the overall gaming experience for everyone, which in turn will most likely attract new users and players further grow the market in the years to come.

Platforms such as e-sports betting and fantasy sites have attracted more investments, which is driving the market in the right direction. Approximately one-third of the e-sports fans in the United States (SPY) participate in online amateur tournaments. Because there is immense potential in this segment, Activision (ATVI) and Electronic Arts (EA) are looking to increase market penetration. Asia and Europe remains a huge market for these companies.

Strong growth ahead?

Analysts expect that the Console Segment will see a significant growth in the coming years.

The most recent trend is the growing availability and popularity of multi-functional gaming consoles, which is emerging in the market and helping in growing the market of video games globally.

The Asia-Pacific region holds the largest market share in terms of online gaming usage, where Southeast Asia generates the highest gaming revenues. The online population in Southeast Asia (SEA) is rapidly rising, primary result from the increase in mobile-device usage. Almost two thirds of the gaming population in Greater Southeast Asia are also engaged in esports. Owing to this, the region is also the fastest-growing games market in the world.

The competitive landscape of the gaming market is also considered to be an important driver for innovation, improvements, system upgrades and new features. The demand for online games and increasing penetration of mobile applications across the US, the UK, Italy, and China & SAR region will help attract new players in this market over the next few years. Key players are Sony Corporation, Microsoft, Nintendo, etc.

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