With the gaming industry being valued globally at $151.55 billion (USD) in 2019, the opportunity to experience growth within the business of games is at an all-time high. According to a 2020 gaming industry report, the industry is further estimated to hit $256 billion by 2025 – that’s $100 billion added in just 5 years.
This rapid and immense growth is driven by a few key trends that have transformed the gaming industry within recent times. Understanding what these trends are and how they have impacted today’s gaming market is crucial for anyone looking to find success within the industry.
This article will explore how mobile and cloud gaming came to dominate the market, why Asia is such a big growth hub, and how gaming as a social forum will likely be on the rise more in coming years.
The rise of mobile and cloud gaming
Mobile and cloud gaming have been the heavy-hitters of 2020. Mobile game revenue reached around $77.2 billion (USD) globally in 2020 and is expected to reach upwards of $102.8 billion by 2023. The impact of mobile gaming has led to many big gaming companies finding ways to make their games available on mobile devices as well, such as Riot Games’ League of Legends Wild Rift coming out in 2021, for example.
Cloud gaming does not have the same kinds of numbers to boast as mobile gaming – in 2019, the cloud gaming market was valued around less than half a billion USD – but cloud gaming is expected to experience an annual growth rate of 47.9 percent between 2020 and 2027.
One of the biggest examples of cloud gaming in today’s market that shows the immense potential of the service is Sony’s PlayStation Now, which has over 2.2 million paying subscribers as of April 2020. Cloud gaming offers video games on-demand – a similar service to Netflix’s video streaming service – on most consoles and devices, thus allowing game developers and marketers to reach even wider audiences.
Moreover, because cloud gaming can enable users to stream games to several devices, this presents a major opportunity for a crossover between the mobile game market and cloud gaming.
Asia as a growth hub for gaming
Asian countries tend to dominate in terms of overall revenue and growth within the gaming industry. Mobile games and esports are two of the biggest sources of revenue within the gaming culture of Asia.
When it comes to who exactly gamers are, people from Asian countries make up a significant portion of the total global gamers. For instance, the first and third biggest markets for mobile games are China and Japan, with $18 billion and $6.5 billion in revenue in 2019, respectively.
The Asia Pacific region, also known as APAC, reached a whopping $72.2 billion in revenue in 2019, marking it as the top region for the video game industry. APAC is followed by China who had $40.9 billion in revenue and the United States with $36.9 billion.
Furthermore, the esports industry finds some of its greatest success within Asian nations. Asia has over 510 million esports fans – more than half of the global total. The popularity of esports viewership is increasing in both Asia and North America primarily and are expected to breach $1 billion in revenue in 2020.
Asia is likely to continue to be a stand-out in terms of gaming revenue and growth, though the United States typically trails behind in second place in most cases. As such, it is key to stay alert to changing market trends within the eastern parts of the world.
Gaming as a form of social forum
The Covid-19 pandemic has had tremendous impacts on all industries, the gaming industry included. Government-mandated lockdowns and social distancing restrictions have driven more people into the digital space, particularly when it comes to playing video games.
A recent study found that the pandemic coincided with a 39 percent increase in monthly video game spending. The study further states:
“The biggest changes were increased interest in Fighting games, Multiplayer Online Battle Arena games, and Battle Royale games, all of which typically have heavy multi-player components. In the US, this change was especially found in Battle Royale games, a game type made popular by Epic Games’ Fortnite – they saw a 143 percent increase during COVID-19 shelter-in-place, a larger shift than any other country saw.”
As such, gaming has emerged in 2020 as a form of a social forum even more so than it was before. The ability to socialize with friends, family, or other gamers already played an influential role in the gaming industry, but pandemic-related circumstances have made games where players can interact with and speak with one another that much trendier.
For example, consider the highly popular online multiplayer game Among Us. The game places a special emphasis on interactions with other players, which players took keenly too during 2020. The game ended up surpassing over 200 million downloads with an estimated revenue of $39 million.
Moreover, video games have increasingly used to host social events, such as live concerts, that viewers can access entirely from their homes. A major example of this is Travis Scott’s partnership with Fortnite that resulted in an in-game live concert that reached 12.3 million concurrent views.
Growth driven by payments optimization
Beside the trends highlighted above, the way consumers prefer to pay for access to games and gaming-related entertainment is also changing. With the majority of gamers now residing outside of the US and Western Europe, game developers looking to sustain revenue growth is by looking at better, local payment methods.
One of these payment methods is carrier billing. Carrier billing allows for purchases to be charged to a user’s monthly phone bill, rather than to a debit or credit card. In 2018, content purchased by means of carrier billing accounted for 12 percent of all digital content spending – by 2024, it is estimated to increase to 22 percent.
There are a number of benefits that come with carrier billing when considering using it for video games. Carrier billing allows for easily processed microtransactions within a game as well as convenience for recurring payments.
Additionally, carrier billing allows for game companies to reach more global audiences that may rely less on credit cards in general. This is because as long as a person has a mobile device of some sort – be it a smartphone, tablet, smart TV, etc. – they have access to carrier billing.
Global reach is important for a video game, especially for companies that may be based outside of the Asian regions where the gaming industry flourishes. This is one of the greatest opportunities presented by carrier billing – the ability to build a customer and fanbase within an international audience.
If you’re a game developer looking to improving your payment setup by adding new local payment methods, take a look at how Fortumo helps you reach new global audiences.