Games Market Revenues Will Pass $200 Billion for the First Time in 2022 as the U.S. Overtakes China
Last week, our clients received access to our latest games market estimates and forecasts, including our new 2022 numbers. In this article, we’ll present some high-level data and findings from that Global Games Market Report update.
As the world begins to reopen again, the games market has proven resilient. Revenues are still growing in 2022 and will reach $203.1 billion via consumer spending (+5.4% year on year) — a new record.
The global player numbers will also have a breakthrough this year, passing the three-billion mark to reach 3.09 billion players by the end of the year.
Please note: Based on our extensive analysis of the financial results of more than 140 publicly listed game companies (for the calendar year 2021), we now estimate that the games market generated $192.7 billion in 2021, up +7.6% year on year.
Game Revenues by Region: The U.S. Is #1 Again
Before zooming in on our 2022 games market forecasts for mobile, PC, and console, we wanted to point out some noteworthy regional developments.
In terms of game revenues via consumer spending, the U.S. ($50.5 billion) will generate more than China ($50.2 billion) in 2022.
The overtake makes sense, as the Chinese government has been cracking down on gaming in China, limiting new game releases and young people’s gaming time in the country. The market is beginning to show the impact of these regulatory pressures.
Nevertheless, Asia-Pacific remains the biggest region by revenues by a massive margin:
As you can see, emerging regions are the only places to show double-digit growth. However, the more mature regions of Europe and North America are also showing strong growth, thanks to the performance of PC in the former market and console in the latter.
Mobile will still accumulate more revenues than those two segments combined in 2022.
Mobile Game Revenues Will Also Pass an Important Milestone
Yearly mobile game revenues will pass the 100-billion-dollar mark for the first time in 2022, growing +5.1% year-on-year to $103.5 billion.
While mobile will still show growth, its yearly rise is notably lower than its 2020 and 2021 growth numbers, as 2022 cannot sustain the pandemic-driven growth of prior years. This means mobile’s market share will drop one percentage point this year (from 52% in 2021 to 51%).
To that end, the most mature mobile markets will only show minimal year-on-year growth in 2022 — +2.8% in China and +1.1% in Japan, for example. These mature markets rely on new game releases and improved monetization strategies to grow revenues as player growth is minimal.
Releases in China are limited due to government regulations. And while new releases like Apex Legends Mobile (especially in Japan) and Diablo Immortal will contribute to revenue growth globally, user acquisition will remain a key challenge.
Privacy changes like IDFA’s removal make it more challenging for mobile games to effectively acquire and target players. While Apple’s opt-in changes are more extreme than Google’s, most publishers allocate a combined UA budget (not a separate one for iOS and Android), so user acquisition is impacted across the board.
Asia-Pacific remains the largest games region by absolute revenues (by a large margin), but China, Japan, and Korea all show low-single-digit year-on-year growth. So where is mobile’s growth coming from?
Emerging markets across Latin America and Southeast Asia will be the biggest contributors to mobile’s 2022 growth, thanks to:
- Increasing access to games and (smartphone) devices
- Improvements to infrastructure and mobile internet
- More frictionless and accessible payment options.
Console Will Be the Games Market’s Main Growth Driver in 2022
From the emergence of mobile to the dawn of cloud gaming, pundits and analysts have long been predicting ‘’the death of console’’. As things stand, console is still very much alive and kicking — as we have always said.
Despite ongoing supply chain constraints, console games will generate $56.9 billion in 2022, growing +8.4% year on year. This growth will be driven by:
- Huge first-party releases like Horizon Forbidden West, Pokémon Legends Arceus, Gran Turismo, God of War Ragnarok, and Xbox’s Starfield and the rest of its to-be-announced H2 line-up.
- Highly anticipated third-party premium releases like Call of Duty Modern Warfare 2 (perhaps the most-anticipated Call of Duty title in years), Elden Ring, and yearly sports releases.
- The ongoing console performance and fervor around live-service games like Fortnite, GTA Online, and Call of Duty Warzone.
- Growing new-gen install bases will lead to increased consumer spending on software (consumers want games to complement their new hardware).
- Sony’s revamped subscription PlayStation Plus strategy, which features new tiers with game content subscriptions and cloud gaming, replacing the struggling PlayStation Now service.
PC Will Also Show Growth but Less Than Console and Mobile
PC game revenues will grow slightly slower than console but will still show a +1.9% increase to $41.0 billion in 2022.
Like console, ongoing revenues from established live-service titles — as well as new games like Elden Ring and Modern Warfare 2 — will contribute most to growth.
However, PC’s growth is still lower than console’s, because PC has:
- Fewer high-profile first-party releases (titles like Horizon Forbidden West and Pokémon Arceus Legends lead to hundreds of millions of dollars in revenues, which PC cannot capture.
- No ecosystem-dominating subscriptions like PlayStation Plus, Xbox Game Pass (PC has Game Pass, but it is not tied as heavily to the ecosystem), and Nintendo Switch Online.
- Less software related to new hardware, but some consumers will buy new software to put their new GPUs and other components to the test — yet not to the same extent as a new console purchase.
Like previous years, browser games will decline as more players shift their playtime and spending to mobile and as developers also prioritize developing for mobile screens.
While some mobile developers offer browser-based versions to make their games more accessible for their most loyal fans, this is not enough to offset the outflow of players from browser to mobile.
Meanwhile, downloaded and boxed PC game revenues will grow +3.2% year on year to $38.7 billion, mainly driven by the West’s biggest markets and emerging markets in other territories.
We attribute much of Europe’s games market growth (+6.3%) to its stronger-than-average PC market; however, the region’s growth potential has been somewhat limited by the ongoing conflict in Eastern Europe.
Notably, China’s PC market will decline slightly year on year, a decline that will accelerate toward 2024 and is a direct result of the government’s gaming crackdown. This brings us to the games market’s future outlook.
What Does the Future Hold for Global Games Market Revenues?
The games market will continue to grow in the following years, reaching $222.6 billion in 2024, a +5.6% CAGR (2020 to 2024):
The future is bright, across mobile, PC, and console alike.
On the mobile front, talented studios will continue to adapt to the new privacy normal — all while bolstering the market via:
- Ongoing live services and hybrid monetization innovation (across core and casual genres)
- Console- and PC-first companies bringing their franchises to mobile to bolster their growth and revenue streams, including Apex Legends Mobile and Diablo Immortal this year
- Mobile games getting increasingly complex and immersive, attracting core gamers to the platform and boosting revenues
On the console PC and console front, the expansion of subscription services alongside full-priced releases will give players more ways to play and pay. Of course, ongoing and imminent massive live-service titles like 2023’s reported Call of Duty Warzone 2 will also keep players engaged and spending.
Simply put, the market is massive and innovative, and it’s only due to grow and innovate even further.
We’re very excited to see, analyze, and forecast these developments together with our Global Games Market Report subscribers.
Want our numbers, developments, and insights before anybody else? Ask us! We’re happy to help.