Gaming Market

Market Overview

The global gaming market size was estimated at USD 195.65 billion in 2022. It is estimated to reach USD 401.23 billion by 2031, growing at a CAGR of 8.3% over the forecast period (2023–2031). The increasing popularity of virtual reality has led to a substantial increase in the demand for VR gaming headsets, which is expected to have a significant impact on the growth of the gaming business.

Gaming is a common kind of entertainment for large people everywhere. Playing video games helps to reduce stress. Participants also feel a sense of success and gain collaborative skills from it. Therefore, this sense of joy and fulfillment is anticipated to become increasingly widespread. It is also useful for calming agitated kids and amusing older adults with more free time. Globally, those with a larger physique are inclined to engage in gaming activities as a prominent kind of entertainment.

Playing video games has provided individuals with stress reduction, opportunities for collaborative teamwork, and a sense of accomplishment. The experience of self-satisfaction and joy contributes to the generation of increased traction. Moreover, it serves as an efficacious instrument for pacifying exuberant children and providing amusement for elderly individuals contemplating an increase in leisure hours.

Market Dynamics

Global Gaming Market Drivers

Emergence of Next-Generation Gaming Consoles

The next-generation gaming consoles, commonly known as the eight-generation gaming consoles, are gaining popularity. These include consoles released since 2012 by Nintendo, Microsoft Corporation, and Sony Corporation, such as Wii 2, Xbox 720, and PlayStation 4. The handheld consoles from this generation include PlayStation Vita and Nintendo 3DS, which have taken Augmented Reality (AR) to a new level. In addition, graphical improvements and performance have been highly stressed by manufacturers while developing these consoles. The consoles have features that enable recording and online sharing of in-game footage.

With the addition of faster hardware, game developers accentuate and create graphically impressive games to create more appealing, immersive, and compelling visuals. Microsoft Corporation and Sony Corporation have developed 4K compatible gaming consoles such as Xbox One X (formerly known as Project Scorpio) and PlayStation 4 Pro (originally announced as Neo), respectively. These consoles provide smoother images, better resolution, and greater detail, subsequently improving the gaming experience, which drives the segment's growth.

Increasing Disposable Income and Improved Standard of Living

The escalating disposable income levels in many nations result in a corresponding surge in consumer expenditure on gaming products. Moreover, the shifting consumer preferences have resulted in the widespread adoption of increasingly modern gaming consoles equipped with sophisticated functionalities, including recording and sharing gameplay and engaging in cross-platform gaming experiences.

Globalization has led to quick technology transfer worldwide and rapid urbanization, resulting in an improved standard of living and increased disposable income. The growing young population across the globe has resulted in higher expenditure on products related to the latest technology. In addition, spending on gaming equipment with cutting-edge features like virtual surround sound and in-game chat is rising as more and more customers look to enhance and support their gaming experiences. With virtual reality gaining momentum, the demand for VR gaming headsets has spurred significantly and is anticipated to contribute momentously to the market expansion.

Global Gaming Market Restraint

Rising Piracy Issues and Increasing Availability of Counterfeit Products

The gaming business is confronted with a significant peril in the form of piracy and counterfeiting. The increasing availability of counterfeit consoles may be a major hurdle to the growth of the global gaming market over the forecast period. Similarly, the production of low-cost counterfeit goods has increased due to the growing desire for inexpensive consoles; this is predicted to significantly damage the market and reduce revenue prospects for game creators.

Furthermore, customers unaware of the brand and quality frequently choose products with comparable characteristics at a far lower cost. It is predicted that in the upcoming years, the expansion of the market will be hampered by the rising adoption of these counterfeit items due to their low prices, particularly in developing nations like China, Indonesia, and Taiwan.

Global Gaming Market Opportunities

Technological Advancements in Animation and Video Games

Gaming and animation technology has witnessed significant changes over the last few years. Game developers are constantly improvising and pushing the technological limits regarding real-time graphics rendering in the gaming industry. There has also been a significant advancement in animation due to the improvements in video game graphics. The introduction of computer animation was a major improvement in the technology used by animation studios for creating animations and graphics for movies and games. Modern computer animation includes 2D and 3D animated graphics, which are motioned using either rigging technique or frame-by-frame technology.

The development of advanced high-definition (HD) to Ultra-HD (4K) resolution displays is also expected to impact the gaming market positively. The amount of data generated during the distribution, creation, and reception of animated games and movies is expected to increase, resulting in higher storage capacity and computer processing power required for rendering. The market is expected to grow significantly due to the development and integration of the technologies mentioned above for creating and delivering immersive real-life gaming experiences.

Regional Analysis

Region-wise, the global gaming market is segmented into North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global market shareholder and is estimated to grow at a CAGR of 9.61% during the forecast period. The region has the most substantial concentration of individuals engaged in gaming activities, with a notable prevalence of local players who significantly influence the market. However, more games are expected to be adopted by foreign publishers over the coming years. Counterfeiting and game piracy are rampant in the region, with China and Thailand being the key countries contributing to the issue. However, the trend of cloud gaming is gaining popularity in the region, which is anticipated to minimize piracy's impact substantially. Moreover, China overtook the U.S. in 2015 to emerge as the global gaming capital, generating almost a quarter of the global gaming revenues. This can be largely attributed to China's move to lift a long-standing 14-year ban on the manufacturing and sale of gaming consoles. The growth possibilities of the mobile gaming segment have been greatly enhanced by the increasing adoption of smartphones in China, which has consequently led to an overall increase in market growth.

Furthermore, the presence of gaming giants such as Sony Corporation, SEGA Holdings Co., Ltd., and Nintendo, Co. Ltd. Japan is a key factor driving industry growth in the country. The advent of the eighth-generation gaming consoles has emerged as a turning point in the Japanese market as the demand for both TV/consoles and handheld consoles is experiencing huge traction. Similarly, the trend of portable gaming has always been popular in South Korea. With the high level of smartphone penetration and accelerated use of tablets, the trend is expected to continue over the forecast period.

North America is expected to exhibit a CAGR of 7.01% during the forecast period. This is owing to the increased availability of funding to use gaming as an educational or professional tool. With a surge in leisure spending in the region, games have emerged as the most preferred choice across the entertainment vertical, forging ahead of other means of entertainment, such as film and music. Accelerated demand for gaming peripherals and gear such as gaming headsets, gaming PCs, gamepads, and other controllers is a key trend observed in the US market. Moreover, free-to-play and social gaming and cutting-edge features like gesture control that enhance interactivity and engagement are becoming increasingly popular among US gamers. Similarly, the female population in the Canadian market accounts for close to 51%, making it the only country where the number of female players is higher than the male counterparts. The availability of games across different genres, such as action, role play, simulation, and strategy, are further influential in attracting customers in the Canadian market.

In Europe, many enterprises are concentrating on capitalizing on the opportunities offered by the trend of gamification of things. Organizations increasingly opt for initiatives and programs such as gamification in the workplace or enterprise gamification by using game elements to drive employee performance. The high internet penetration rate in the UK is instrumental in making online gaming extremely popular, with over 25% of the population playing video games over the internet. In December 2017, nearly 2,250 active game companies in the UK were operating across a wide spectrum of gaming technologies such as VR, AR, and artificial intelligence. In addition, Germany is positioned as the leading contender in the comprehensive European gaming market, securing fifth place globally, following China, the United States, Japan, and South Korea. The predominant proportion of video game expenditures in Germany has been allocated towards games obtained through digital sales platforms. All such factors contribute to the regional market growth.

In Latin America, a significant proportion of the populace uses social networking platforms, including but not limited to Facebook and Reddit, to participate in online gaming activities. The availability of games across different genres, such as action, role play, simulation, and strategy, are further influential in attracting customers. In addition, social media gaming is expected to positively impact the growth of Brazil's market. The emerging trend of game-based learning in Brazil is anticipated to boost the adoption of video games in the academia vertical, as it helps improve digital literacy and facilitates skill development and cognition.

Segmental Analysis

The global gaming market is segmented by device and type.

Based on devices, the global gaming market has been further segmented into console, mobile, and computer. 

The computer segment dominates the global market and is estimated to grow at a CAGR of 4.2% during the forecast period. Unlike their previous versions, the next-generation gaming consoles are equipped with advanced capabilities that enable their use beyond gaming. The next consoles include the capability to facilitate the streaming of web videos, movies, and television programs. They can further play on-demand media or live video from the internet.

The mobile device segment is predicted to witness lucrative growth over the forecast period and gain momentum owing to the increasing smartphone penetration globally. Tablets are further estimated to drive the growth of the mobile device segment owing to larger displays and enhanced viewing and gaming experience.

Based on type, the global gaming market has been further segmented into online and offline. 

The offline segment owns the highest market share and is estimated to grow at a CAGR of 7.1% during the forecast period. Offline games can be played through physical copies of games such as CDs, DVDs, and Blu-ray, among others, and do not require an internet connection for gameplay.

The online segment is the second largest. The growing demand for multiplayer games is propelling the demand for online games as online games facilitate in-game communication and increase the overall gaming experience. Social networking sites are significant in providing a virtual platform for online games.

Recent Developments

• May 2023- Sony Interactive Entertainment (SIE) delighted fans with a PlayStation Showcase packed with exciting content and impressive new game reveals. Representing a wide range of gameplay genres and artistic visions, the show's array of new and upcoming PlayStation 5, PlayStation VR2, and PC titles reaffirmed SIE's commitment to the quality and breadth of its catalog.
• April 2023- Sony Interactive Entertainment LLC ("SIE") announced it agreed with ProbablyMonsters Inc. to acquire Firewalk Studios™, a studio of industry-leading creatives developing an original AAA multiplayer game for PlayStation®5 (PS5™) and PC. Firewalk will collaborate alongside world-class development teams, including Bungie and Haven Interactive Studios, to define a new generation of live service experiences for PlayStation gamers.
• February 2023- Sony Interactive Entertainment (SIE) announced today the global launch of its next-generation virtual reality headset, PlayStation®VR2. Featuring high-fidelity visuals, new sensory features, and enhanced tracking, PlayStation VR2 takes virtual reality gaming to a new level, enabling players to feel a high range of sensations. 
• June 2023- Angry Birds' parent company, Rovio Entertainment, partnered with award-winning educational gaming platform Legends of Learning to bring the globally-loved media franchise into the world of education. The partnership, facilitated by Angry Birds' global licensing agency IMG, will result in a series of educational games that leverage the iconic characters and settings of the Angry Birds franchise. Using player-focused gaming experiences, interactive gameplay, and hands-on problem-solving, the games are designed to help students learn important STEM concepts, ranging from collisions and forces to angle measurement.