Worldwide gaming market to be valued at more than $314 billion by 2027
A forecast by Mordor Intelligence has predicted that the worldwide gaming market will be worth $314.4 billion by 2027, up from 173.7 billion in 2021, and registering a compound annual growth rate of 9.64% between 2022 and 2027. Mordor Intelligence identified mobile gaming as the fastest-growing segment of the games market, attributing this to its accessibility – “Nearly everyone has a smartphone with games”. Additionally, technological advances like VR, AR, cloud gaming and 5G have all contributed to a rise in popularity for mobile gaming.
55% of US gamers said they played more games during the pandemic, with 90% expecting this to continue
In the 2021 edition of the ‘Essential Facts About the Video Game Industry‘ report, released by the Entertainment Software Association, the ESA found that 55% of video game players in the US played more games during the Covid-19 pandemic, with 90% expecting this to continue even once social distancing was no longer required. While not wholly surprising during a time when the general public has been forced to spend long periods confined indoors, the statistic is still evidence of the increase in interaction with gaming brought about by the pandemic, an increase which many expect to last even as other entertainment options become available again.
Gamers will make up more than half the population of Europe by 2023
As a result of all of this growth, revenues from gaming in Europe are also expected to surge over the next two years, growing by $5 billion between 2021 and 2023, with an additional $4 billion worth of growth in the two years after that. Altogether, they will rise by close to $10 billion in the coming four years, from $23.5 billion in 2021 to $32.6 billion in 2025, illustrating the economic clout that gaming can wield even in “smaller” regional markets.
US consumer spend on video games increased 27% in 2020
In a series of tweets, Executive Director at the NPD Group, Mat Piscatella, shared some fascinating insight into US consumer spending on the video games industry throughout 2020, based on full-year data collected by the company. Total spend on video game content across PC, console, mobile, portable, cloud and VR platforms in the United States reached $56.9 billion in 2020, growing by 27% year-on-year. In December alone, $7.7 billion was spent on such games, up 25% compared to the same month in 2019, while spend on hardware grew to $1.35 billion , no doubt boosted by the release of the new Xbox and Playstation consoles in November.
Mobile gaming revenue spiked at the beginning of the Covid-19 pandemic, followed by continued strong growth into 2021
According to an annual report by Sensor Tower, The State of Mobile Gaming 2021, global revenue from mobile gaming spiked at the beginning of the Covid-19 pandemic, with year-on-year growth in Q1 2020 jumping by 18.6% – more than the growth recorded during the entirety of 2019 . For the first time that quarter, mobile gaming earned more than $20 billion globally. Altogether, global gaming revenue exceeded $22 billion in Q1 2021, up from just $15 billion in Q1 2019. In 2020, the US had a market share of 28% of mobile games spending, followed by Japan at 22%, China at 18%, South Korea at 7% and Taiwan at 3%.
Sensor Tower also noted that countries outside of the top five have been slowly gaining market share, “suggesting that mobile game publishers have turned to less-tapped markets with higher growth potential.
Advertisers underestimate the scale of gaming audiences – and overestimate the opportunity in console gaming
A survey of more than 400 UK and US media buyers, conducted by Atomik Research, found that a third of respondents believe there are between 100 and 500 million active daily gamers, while 27% believed there are between 500 million and one billion. In reality, there are three billion, of whom 2.8 billion game on a mobile device. But as we have seen, the power of the mobile gaming market is very real – and yet 60% of advertisers surveyed felt that console games offered more “premium” video game inventory when compared with mobile. This may be an image issue that vendors of mobile gaming inventory need to tackle, but the perception gap will also detrimentally affect advertisers themselves if they are missing out on the opportunity to target mobile gamers as a result.
81% of US and UK-based media buyers want to increase in-game advertising spend into 2022
Game On For Advertisers – an October 2021 report from in-play advertising platform Admix and Atomik Research – has found 81% of media buyers want to increase their in-game advertising spend over the next 12 months. This is, in part, thanks to a renewed interest from advertisers in the power of gaming as part of the marketing mix. Added to that is the huge uptake in the hobby from consumers throughout the pandemic. By the end of the year, three billon active gamers, globally, could spend up to $176 billion on games.
As interest in video game advertising continues, it opens up even more possibilities for marketers looking to promote their brands within the vertical. The availability of programmatic options, third-party verification for in-game advertising performance and an increase in in-game inventory have all been cited as the biggest causes of growth in the category.
Growth of TV advertising over coming 4 years will be driven by OTT platforms
Over the Top streaming platforms – platforms that serve their content directly to viewers over the internet, like Disney+ and Netflix – experienced an immense surge in popularity during the first year of the pandemic. According to figures from The Business Research Company , the rising use of OTT platforms will drive the growth of the TV advertising market over the coming four years. TBRC predicts that the size of the global TV ad market will grow from $95.98 billion in 2022 to $105.96 billion in 2026, at a CAGR of 2.5%. OTT ad spending, meanwhile, totalled $990 million in 2020, and is predicted to grow to $2.373 billion by 2025, an increase of 139% – “suggesting that advertising on streaming services is expanding at rapid speed”, in the words of the TBRC report.
62% of Britons watch more SVOD since the pandemic began, even after lockdown
When it comes to what consumers prefer about these services, more than half of them say that platforms like Netflix, YouTube and Prime Video had higher entertainment value than linear TV channels, often for a much lower price. Currently, one-third of TV viewers in the UK are spending over £50 on a cable or satellite subscription, while just 1 in 8 spend the same amount on the popular video streaming services they use, combined. Increased time at home, versus pre-pandemic, was rated the top reason for subscribing to SVOD brands , however, the ability to watch shows and films anytime, anywhere was also appealing , as many people return to their busy daily lives.
Nearly 1 in 5 UK consumers are pure streamers
In 2020, the number of consumers that watched traditional TV on a weekly basis was lower than it had been in at least the last 4 years, at 79%, according to a December 2020 study conducted by AudienceProject. As a result, nearly one in five UK consumers are now ‘pure streamers’ – that is, individuals who have ditched traditional TV altogether in favour of streaming services. The figure will no doubt increase over time, especially on account of new habits formed during the pandemic. The UK still has some way to go before it catches up with the viewing habits of consumers in the US, who lead the way globally, with one-third now classified as pure streamers.
Social commerce is becoming more popular with both brands and consumers, driven by the implementation of new features on social platforms.
According to a 2018 survey by Forrester, 68% of US consumers say that their social values shape their shopping choices. Talk of a “Great Resignation” has dominated conversations about recruitment, retention, and workplace culture since midway through 2021, as the ongoing Covid-19 pandemic prompts a widespread reassessment of priorities and working conditions.
In the UK, BRC figures show sales growth is slowing, with March 2022 seeing a rise of 3.1%, down on a 6.7% rise the month previously.
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