New Gaming Boom: Newzoo Ups its 2017 Global Market Estimates to $116.0Bn Growing to $143.5Bn in 2020
The latest quarterly update of our Global Games Market Report featured the biggest adjustment in market size estimates since its first publication five years ago. Based on an even stronger performance than anticipated in the first three quarters of the year, we revised our revenue estimates upward for the years 2016 to 2020. This year, the global games market will generate $116.0 billion in game software revenues, growing 10.7% compared to 2016. This is $7.1 billion higher than our previous estimate, published at the start of the year ($108.9 billion).
Mobile gaming revenues for 2017 were revised upward most out of all segments, from $46.1 to $50.4 billion. The market for PC gaming shows a similar change, from $29.4 to $32.3 billion. Console gaming will end the year slightly lower than anticipated at $33.3 billion, but still showing a healthy year-on-year growth of 3.7%. From a regional perspective, the adjustment was mainly driven by new 2017 revenue figures for China and Japan. The Chinese games market is expected to end the year at $32.5 billion and Japan will reach $14.0 billion.
The upward revision is, for the most part, a result of our continuous tracking and analysis of the game revenues generated and reported by more than 100 public companies. The analysis also shows further consolidation in the market, with the highest-grossing companies accounting for an ever-greater share of the global games market. Public companies will represent more than 80% of global game revenues this year, up from around 75% in 2016.
Ten years ago, the launch of the iPhone ignited a revolution in the industry. Today, we are witnessing a new phase of accelerated growth driven by the empowering nature of games and the impact gaming is having on the media and entertainment landscape as a whole. This was touched on in a recent article on the global gaming boom.
We expect the current growth of the global games market to continue with a 2016–2020 CAGR of +8.2% to reach revenues of $143.5 billion in 2020. By then, more than half of total revenues will be generated on mobile devices. A full set of graphs featuring our new figures can be found at Newzoo Resources.
COMPETITIVE GAMING PUSHES ALL SEGMENTS TO NEW HEIGHTS
Looking at individual game titles on console, PC, and mobile, it is clear that competitive gaming involving team play, rankings, and live streaming is claiming a growing share of overall game time. On mobile, this is particularly true in China and the rest of Asia but also in the West, where competitive mobile titles are increasingly in the top grossing charts. This has renewed confidence among the biggest Chinese publishers to bring their games to the West. Tencent’s Arena of Valor is the obvious example. The abundance of new mobile battle royale titles sparked by the success of PLAYERUNKNOWN’S BATTLEGROUNDS on PC could add to the rise of competitive gaming on mobile in the West. At the same time, esports is entering a new phase toward maturity. The coming two years will be crucial to how fast it grows into a multi-billion-dollar business. The key determining factors are the success of local leagues and the franchising approach, the implementation of regulations, the arrival of new game formats and competition, the uptake of content rights sales, team profitability, and the impact of industry convergence involving traditional media, entertainment, telecom, and sports companies. Depending on how these factors play out in the coming year or two, esports’ growth could accelerate and reach $2.4 billion in 2020 in an optimistic scenario, almost $1 billion higher than the base scenario of $1.5 billion.
GAMING IS AS BIG A BUSINESS AS PROFESSIONAL SPORTS
In the past, global games market (software) revenues were often compared to that of ticket sales at movie theaters across the globe. This year, gaming will generate more than three times the $38.6 billion in movie ticket sales reported for 2016 by the Motion Picture Association of America. As gaming continues its convergence with traditional media and entertainment, new comparisons can be made. An increasingly striking comparison is one to the global sports business, estimated to total between $130 and $150 billion depending on the definition and reporting source. This includes media rights sales, sponsorships, merchandise, and ticketing. At the current growth rates of both markets, game revenues will surpass sports revenues in three or four years from now. If we add revenues from console gaming hardware (around $10 billion this year) and PC gaming systems and peripherals (around $23 billion in total), gaming is already a bigger global business than sports. Looking ahead, gaming as a sport itself, or esports, will also continue to add new revenue streams to the ever-expanding gaming economy.
Find the original post here.
