Games Engine Market Size, Share & Trends Analysis Report By Type (3D Game Engines, 2.5D Game Engines, 2D Game Engines), By Application (PC and Console Games, Mobile Games, TV Games) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global games engine market size was valued at USD 2.4illion in 2022. It is projected to reach USD 7.74 billion by 2031, growing with a CAGR of 13.9% during the forecast period (2023–2031).

A game engine is the heart of a computer or a video game. The program is used to make video games for consoles, smartphones, and desktops. Game engines provide a variety of tools and components for the creation of complex gaming applications. The trend of high-quality video games and appealing tools for a variety of applications has been fueled by technological advancements and ongoing innovation in both hardware and software. Game developers utilize 2D or 3D game engine software to plan and build games swiftly. The game engine is primarily intended for use in creating video games. It incorporates features like 3D graphics, scripting, sound, networking, streaming, artificial intelligence, memory management, and others into a single package. Additionally, dedicated servers and online data storage facilities are being used to improve online multiplayer gaming. Cloud games will experience a significant increase in demand during the anticipated period, contributing to the overall growth of the games engine market. Businesses focusing on entering the market will find it quite profitable.

Market Dynamics

What are the factors driving the market growth?

Introduction of advanced technologies

The games engine market is driven by advances in technologies like Augmented Reality (AR) and Virtual Reality (VR). Augmented and virtual reality technologies are changing how people watch movies and play video games. As current devices become more realistic, the necessity for game engines with more powerful capabilities and real-time capabilities grows. Gaming using augmented reality is a newer concept that is gaining popularity. Innovative technology allows game designers to make games that interact with the real world. Such advanced technologies are boosting demand for game engines in the market. Cloud gaming has gained popularity in the gaming business. It is a huge trend among PC and smartphone players. As the demand for online games has grown, several market participants have stepped up their efforts to advance gaming technology. New gaming goods are introduced to cater to the growing need for game engines among game creators.

What are the factors restraining the market growth?

High software cost

The gaming market is exploding. However, the expense of game engine software and hardware is a concern for the business. Most game engines require a high-end computer or console. Individual developers struggle to afford the costs as they demand more funding to bring their ideas and initiatives to life. Sales are often hampered by tough rivalry from competitors and changing client needs and tastes. As a result, software vendors may invest less in research and development, making the industry less profitable for new enterprises.

What are the prospects of game engine?

Improved infrastructure, such as better broadband and wi-fi connection

The games engine market will rise as more individuals access faster internet and IoT technology. People currently prefer smartphones and browsers over television, making them more connected and encouraging them to play more games. In recent years, many technical advances in wireless telecommunications have enhanced network availability and performance. This is especially true with the fast rise of mobile broadband networks and Wi-Fi technologies. Dedicated servers and online data storage facilities enable online multiplayer gaming over network hardware consoles or other local area networks. Cloud games will witness greater demand due to the development of 5G and internet access, contributing to the overall growth of the games engine market.

Regional Analysis

Asia-Pacific holds the largest market share due to the region's high adoption of mobile platforms, which has created promising growth prospects for the market. Asia-Pacific is the fastest-growing gaming region in the world, with countless potential for game developers, marketers, and strategists. The region is home to 1.5 billion players. The expansion is primarily a result of the gaming disruption that has been observed in China, India, Australia, and Japan. It is anticipated that game engine service providers will witness increased consumer demand and lowered entry barriers for low-cost alternatives and innovations. In addition, gaming consoles, personal computers, and cloud-based games will augment the disruption throughout the region, which looks favorable for stakeholders.

North America region is expected to show significant growth over the forecast period. According to the GSMA, the number of smartphone users in North America will reach 328 million by 2025. Furthermore, by 2025, the area may experience an increase in global mobile user penetration (86%) and internet usage (80%). The region has the highest rate of smart device adoption. Since smartphones play such an important part in market development, the region has a lot of room for expansion over the projected period. The presence of important competitors in the region also contributes to market expansion. Surprisingly, major technology corporations are among the largest investors in the gaming sector. The gaming businesses are simultaneously investing in the next wave of game franchises and numerous new technologies. For example, cloud-based gaming systems, improved mobile services, and powerful social media features reinforce the relationships between and among their player communities.

During the forecast period, the number of game engines in Europe will increase steadily. Technological advancements have resulted in better graphics and more compelling game experiences, resulting in growth. Developing games that are compatible with popular game engines has helped a number of gaming businesses reduce production expenses. The region has a high smartphone and mobile subscriber penetration rate, which also influences the demand for gaming engines. Germany is a preferred destination for innovative start-ups due to its reasonable expenses, good infrastructure, and a big pool of talent for international gaming companies. With 48 million active players, Germany is the largest gaming market in Europe and has witnessed the most increase in online games of any European nation. Germany attracts worldwide gaming enterprises with its highly qualified workforce, cutting-edge IT infrastructure, government assistance, and various gaming industry events.

The Middle East and Africa are projected to have the greatest over the forecast period. The game engine industry is flourishing in the Middle East and Africa due to increased demand and investment in locally-made video games. By working with or acquiring internationally renowned video game firms or distributors, nations in the area contribute to the market's expansion. The Saudi Public Investment Fund, for instance, acquired shares of a European video game distribution company for $1 billion. This acquisition is consistent with the Saudi government's goal of establishing a video game and development business in the country. As the region's population gains access to smartphones, PCs, and consoles, the number of gamers continues to rise. Recent research indicates that fifty percent of Saudi Arabia's population identifies as regular gamers. The increasing number of smartphone users and the internet penetration rate influence Latin America’s market growth. Brazil is one of the most important markets in Latin America due to its rapidly urbanizing population and increased demand for mobile games.

Segmental Analysis

The games engine market is categorized by type and application.

By type, the games engine market is divided into three types: 3D, 2.5D, and 2D.

The 3D game engine type held the biggest market share because of its superior visual quality, asset store management, engaging gameplay, and user-friendly design. The creation of 3D games has expanded to gaming consoles, mobile devices, and desktop apps. Interest in 3D game engines has surged among gaming app development companies due to their user-friendly features and rigorous debugging. In addition, 3D rendering has grown popular for providing a realistic gaming experience with features such as animation, scripting, artificial intelligence, memory management, networking, and streaming.

By application, the games engine market is divided into PC games, mobile games, TV games, and others.

The mobile segment holds the greatest market share and is anticipated to grow at the fastest CAGR during the forecast period. Mobile devices are widely available on a global scale and have great penetration in rural areas, which has expanded the platform's user accessibility. Mobile gaming devices are exploding due to their accessibility and low cost. Mobile phones and tablets account for around 40% of the market. Mobile games, especially those featuring multiplayer, generate more money than portable games.

Impact of covid-19

Even though the COVID-19 pandemic had only a little influence on the game engine business, consumers favored online games over offline games, resulting in a decline in demand for offline games, including video games. However, as the demand for online games has grown, several market participants have stepped up their efforts to advance gaming technology. New gaming goods are introduced to cater to the growing need for game engines among game creators. The games engine is primarily intended for use in creating video games.

It incorporates features like 3D graphics, scripting, sound, networking, streaming, artificial intelligence, memory management, and others into a single package. Additionally, dedicated servers and online data storage facilities are being used to improve online multiplayer gaming. Over time, cloud gaming has grown increasingly popular in the gaming business. It has also become huge popular among PC and mobile players alike in recent years.

Cloud games will experience a significant increase in demand during the anticipated period, contributing to the overall growth of the games engine market. Cloud games will see significant demand as 5G and internet access become more widely available. Businesses focusing on entering the market will find it quite profitable.

Recent Developments

• April 2022- Epic Games, the parent company of the wildly popular video game Fortnite, has gotten $2 billion in capital from Sony and KIRKBI, the investment firm that formed the Lego Group. The funding will be utilized to strengthen Epic's expansion plans for the metaverse. Sony and KIRKBI each contributed $1 billion to the round of financing.
• August 2021- Unity Technologies announced the acquisition of Parsec, a remote desktop and streaming technology company that allows gaming and creative professionals to work together from anywhere. This transaction is a significant step toward Parsec's and Unity's expanded cloud vision, which states that creators should be able to work from any location, on any device, with powerful tools and seamless cloud infrastructure to deliver real-time 3D experiences.
• March 2022- Epic Games announced that it is coming up with a PC Building Simulator 2 this year. This is the sequel of the PC building simulator. In addition to enhanced aesthetics, the new game will offer a career mode with more than 30 hours of gameplay. It also embraces realism by using brand names that PC gamers will recognize.