Analysts at NewZoo report that the global games market is expected to generate $175.8 billion in 2021. While this is a slight year-over-year decline (1.1%), the global games market continues to grow — it's expected to reach over $200 billion by 2023. Nearly a third of the people on earth now spend money on the global games market, and this number is constantly growing.
COVID's Impact on the Global Games Market
During COVID, many turned to games as a way to entertain themselves inside, keep their family busy, and reach out to their friends. This is what sustained the global games market despite many development and production delays. COVID's impact on the global games market was primarily one of disruption. Consumers were purchasing games just as fast if not faster, but games and game systems were not able to come out on time.
The PlayStation 5 and Xbox Series X launches are major examples of this. To date, only 7.8 million PS5 consoles have been sold compared to the 115.9 million units of PlayStation 4. But this is because of scarcity. PlayStation 5 and Xbox Series X consoles are both selling out at a rapid pace, but they are unavailable because of distribution issues — notably, an overwhelming supply chain scarcity of superconductors, affecting everything from video cards to vehicles.
It's expected as these supply chain issues ease up, the global games market's rebound will accelerate. There are many games in development that have been delayed until the post-COVID world and there are many individuals who have picked up gaming as a hobby during the COVID pandemic.
One confounding factor will be how local economies rebound post-COVID. Some countries have experienced limited economic impact; their purchasing may go up nearly immediately. Other countries are experiencing record unemployment rates; these countries may have some time to spend in recovery before disposable income becomes available to the populace.
The Countries of the Global Games Market
While the United States remains one of the largest contributors to the global games market, China has finally reached the top. China is presently the biggest buyer of games at $44 billion in annual revenue. The United States comes as a close second at $42 billion. Japan, meanwhile, is a distant third at only $20 billion.
South Korea, Germany, and the United Kingdom are all major players within the games market. But it is the battle between the United States and China that is more likely to become notable, especially for political reasons. China has shown itself to be increasingly moving toward an "internal" state, with its own internet and its own applications. Developers may find it difficult to market products to the Chinese market from outside of China, but because there's such as large market, the opportunities are nevertheless there.
It should be noted that the company with the highest games revenue is also a Chinese company: Tencent. Tencent posts about $6.5 billion in annual revenues and owns Riot Games, in addition to a significant percentage of Epic Games, and a portion of Activision Blizzard, Ubisoft, and Paradox Interactive. As animosity between the Chinese and the US grows -- in addition to tariffs and other political maneuvering -- this keys stake within the global games market could become an issue.
The other top video games companies include Sony, Apple, Microsoft, and Google.
Market Share via Platform
It's easy to see that the global games market is growing. But in what direction?
Toward smartphones.
According to Statista, about 45 percent of the market is now smartphone games. Smartphones are ubiquitous. Not only does nearly everyone have one, but nearly everyone has a smartphone with them. Smartphones now have the processing power and visual capacity of many consoles and home computers; it's easy to see why developers are moving toward such an accessible and powerful platform.
Following smartphones, console games have 28 percent of the market -- and 19 percent of the market games on PC. Only about 7 percent of the market invests in tablet games and 1 percent play browser-based PC games.
The future of the global games market, it appears, is either mobile or console-based. Trends show that consumers enjoy games that are accessible; games that are easy to pick up and immediately start playing. Mobile and console-based games also have an easier path through distribution, as they are mostly distributed through specific storefronts that are already pre-installed on the device.
The Demographics of the Global Game Industry
Game industry spending used to be relegated primarily to younger males. But these demographics have been shifting in recent years. Women now make up nearly half of all gamers in the United States and similar demographic shifts are being seen worldwide. However, women and men still display a difference in the games that they play. Women are more likely to play casual, mobile games, whereas men are more likely to play battle royale and shooter games.
In terms of age group, the 18 to 24 demographic still purchases the majority of games. But they are closely followed by those aged 25 to 27 and those aged 28 to 30. Gaming is no longer relegated to a single age group and there are more and more gamers who are older. In fact, interestingly enough, older adults (such as 30 to 40) show a drop in game purchasing, but those 40+ appear to experience a resurgence. This may be due to the increased amount of time individuals in various age groups may have for gaming.
The global games market continues to grow, despite hiccups brought on by the pandemic. The following year looks very promising, as many supply chain issues and development delays should be ironed out as the COVID-19 pandemic continues to wane. The gaming industry is growing, with more people purchasing games than ever before, and demographics rapidly expanding. Those who are in the games industry should expect a sharp turnaround and acceleration through the later half of 2021 and 2022.
