A recent report anticipates that the global gaming market will reach USD 171.96 billion over the next eight years. PR Newswire broke the story earlier today, predicting a compound annual growth rate (CAGR) of 6.5% by 2025 . They explain that gaming has emerged as one of the most lucrative entertainment industries, rivalling music and film. The report details many key findings that further explain this insane growth. From improving technologies and radical new hardware to increased software accessibility, the industry is booming like never before.
The first area that the report attributes this growth to is the emergence of VR technology. Virtual Reality technology, while initially popular in the 1990s, has undergone a renaissance as the hardware has improved. The technology has vastly improved beyond the troublesome state of the 90s to a point where it meets consumers’ expectations. Products like the Oculus Rift, HTC Hive and PlayStation VR solve the problems of products like Nintendo’s Virtual Boy. Modern VR designers have ironed out issues of bulky designs, poor graphics and unintuitive controls. As a result, VR software has developed alongside the renewed interest in the hardware. Beyond traditional gaming experiences, VR also offers educational tools and professional simulations. As both VR hardware and software are evolving, the report states they have been “instrumental in opening up several avenues for market expansion”.
The report also points to mobile gaming as a significant factor in gaming’s growth. With the growing power of tablets, to the increased presence of smartphones across society, mobile gaming is experiencing significant advancements. Greg Joswiak, Apple vice president of iOS, iPad and iPhone marketing, told Glixel that mobile gaming is at an “incredible tipping point”. The report predicts a CAGR of 7.3% over the next eight years just in the area of mobile gaming. Nothing exemplifies mobile gaming’s growing legitimacy more than the Fortnite’s recent overwhelming popularity following its recent mobile launch. While console gaming seems to have plateaued at 4K resolutions, the Nintendo Switch highlights the increased demand for portability in games. As obvious as it seems, mobile gaming is a serious growth area.
Another factor in the increase of the global gaming is the expanding markets outside of the West. The Asia Pacific market, which includes countries like China, India and South Korea is expected to reach USD 86.84 billion by 2025. The report states this lucrative eastern market is emerging because of “growing smartphone and internet penetration”. The rise of online gaming, which itself is expected to grow at a CAGR of 8.6%, is breaking down international barriers and traditional limitations. These specific countries are connecting with Western markets more than ever through competitive eSports. Leagues like the Overwatch Lleague are creating global, nation-representing, competition, giving video games a legitimacy similar to Olympic sports.
It is exciting to think games, as culturally important and commercial relevant as the are now, will continue to grow. As one would expect, the report predicts that the “prominent players dominating the global gaming market” will be Nintendo, Microsoft, Sony and Tencent Holdings Ltd, who have shares in Riot Games, Epic Games, Activision-Blizzard and most recently Ubisoft. The world of gaming will be drastically different in 2025, but gamers can take comfort in knowing that they will be more important than ever. For the latest news, stay tuned to Gamers Classified.