The video games industry has changed a lot over the last 10-15 years. Nintendo’s DS and Wii consoles showed the world that gaming was not just for millennial men, but something that could be enjoyed by all genders and generations.
Games like Wii Sports turned video gaming into a social activity for people to enjoy together as opposed to an activity done alone or only with online friends.
Since then, annual spending on video games has continued to grow, reaching record levels in 2019. Some estimates put global revenues at somewhere around $200 billion. Most industry pundits expect this growth to continue at least for the next five years.
Can this growth be sustained though?
150% Growth and Casual Gamers
In 2019, the demand for mobile games increased by 150%. This was helped by the release of popular titles like Call of Duty: Mobile, Stack Ball, Run Race 3D, Garena Free Fire and Subway Surfers.
This drove mobile gaming revenues to around $100 billion for the first time too.
In 2020, growth has continued with downloads of hyper-casual mobile games increasing by 30% in the first quarter. These casual titles are the biggest driver of demand for games as they are a lot more attractive to people who don’t want to commit to buying a console or the typical $50 price tag for new games.
In fact, some research has shown that more than half of mobile gamers are unwilling to pay for games at all.
While we will likely see growth for a few more years, there will become a point when the casual gaming market will be saturated, with few new players to attract.
This will mean further growth will need to come from new regions. Currently, China, Japan, South Korea, the United States, Canada, and the EU’s biggest economies are the countries that spend the most on video gaming.
For gaming revenues to increase further, regions like India, Africa, and South-East Asia will need to step up to the plate. This is already happening, with India boasting 600 million gamers and companies investing heavily in many South-East Asian and African countries.
Hardware manufacturers like NVIDIA and AMD, as well as peripheral manufacturers like, are also investing heavily in these regions to build up their market share.
Local developers, like Kenya’s Weza Interactive and Ludique Works, are also helping to introduce games to new players by creating content that is more suited to the tastes of the countrymen.
The iGaming sector, which offers online versions of classic casino games as well as video slots with daily jackpots, sports betting and bingo, is also experiencing strong growth. Like other forms of gaming, iGaming has grown dramatically since the turn of the new millennium thanks to the prevalence of the internet and mobile devices. Also like other parts of the industry, iGaming will likely see most of its growth come from new markets.
Online casinos and sports betting are commonplace in most of Europe, but the United States, which has the potential to be the biggest market in the world, has only recently begun to allow residents to place wagers online.
Instead of nationwide federal rules, each state is empowered to set decide how casinos and sportsbooks operate within their borders. While 12 currently allow betting in some form, it’s expected more than half of all states could legalise iGaming over the next few years.
India and Africa are also showing a lot of potentials for iGaming to grow as more countries and regions get their citizens connected to high-speed internet.
We will inevitably reach a point where growth in the video games market begins to plateau. It doesn’t seem like that point will be in the immediate future though as there are plenty of opportunities in emerging markets.
The casual gaming revolution, driven initially by Nintendo and now by smartphones, will continue in these emerging markets as more people get access to smartphones and the internet for the first time.
iGaming too will continue to grow as more Americans get access to online betting and markets in Africa also mature.