Industry experts Ampere Analysis have reported that, for the first time in 7 years, the global video games industry looks set to fall. They project that the market is expected to decline year on year by around 1.2%, to around $188 billion down from its current peak of $191 billion in 2021. The unprecedented global events of the past couple of years are generally seen to be the key driving force behind both the industry’s recent growth and this latest, minor, decline.
The market is around double the size it was in 2015, and much of this growth came about from the early months of 2020 onwards as the industry found itself uniquely well positioned to capitalize the wave of disruptions and cancellations that impacted other sectors. That the boom is showing signs of slowing is, of course, only natural. Rising prices across all sectors, and the multi-year global computer chip shortage that has limited the production and availability of gaming hardware, are both seen as contributing factors to this downward trend.
A More Nuanced Picture Emerges
What’s more, these changes are primarily reflective of the fortunes of major Triple ‘A’ titles and big name studios, the blockbusters of the games industry that command the widest influence, and thus generate the greatest revenue. But focusing solely on how this sector is trending can give analysts a skewed picture as to the state of the games industry in 2022 at large. This is because in diverse regions around the world, alternative and niche gaming markets look set to post their most successful years ever.
One such sector that is experiencing consistent growth that runs counter to the wider industry is that of online gaming. There are a number of reasons for this – for one, it has begun to benefit from a growing trend in legalization in the United States for online gaming providers to begin trading. Following the likes of New Jersey and Nevada, it is expected that more US markets will open up in the coming years, which will translate to significant growth for the sector. Another key factor impacting its growth is the rising number of smartphone owners from emerging markets.
With a further 1 billion people around the globe expected to “go online” over the course of the 2020s, online gaming providers accessible through mobile browsers are uniquely well situated to benefit from this. For example, users in India now have many options available to them for playing online roulette for real money. This is especially so given that platforms such as Asiabet.org actively collate the various mobile casinos available in their region that furnish this title. What’s more, services such as these also demonstrate a commitment to delivering competitive bonuses and promotions to their patrons, and prioritize casinos with the best customer service through a ranking system. This low friction experience engenders positive consumer regard, which further stimulates the wider market’s growth in these regions. This picture is also similar to mobile-based app games, which, likewise, directly stand to benefit from new smartphone users growing their potential customer base. In fact, while popular mobile titles, especially those belonging to the “freemium” model, have only gone from strength to strength over the past few years, another increasingly popular gaming model, commonly known as free-2-play, looks set to supplant it.
These titles are, as the name suggests, free to play, yet they offer microtransactions to users which consist of aesthetic customisation features. This ensures a steady stream of revenue for a developer, which enables them to be able to afford to maintain a game over a long period of time. It’s also incredibly lucrative. Fortnite made $9 billion in just its first two years, all through optional microtransactions. Predictably, major developers, from EA to Microsoft Game Studios, are increasingly seeking to integrate this format into their big-budget titles.
A Drop in the Ocean
Ultimately, any sign of slowing in the industry’s growth is minor and ultimately insignificant. After all, for many years the games industry lagged behind the music and movie industries. That was, until 2002, when it finally eclipsed those other markets in global revenue. Since then, the games industry has grown year-on-year, and now represents a market that is 1700% larger than the movie and music industries combined. Rest assured, the games industry is here to stay.