Although the gaming industry has been heavily impacted by job cuts and position attrition over the past few years, it is still on track to experience strong growth over the next five years. A new report from PricewaterhouseCoopers (PwC) predicts that annual revenues will exceed $300 billion by 2028, more than double 2019 revenues.
According to the Global Telecom and Entertainment & Media Outlook 2024-2028 released this week, gaming is one of the fastest growing large sectors in the entertainment and media industry. The report states that gaming will account for 9% of the total market by 2028, although “the pace of growth will slow as the segment matures.”
The report, which covers 53 regions across North America, Europe, the Middle East, Africa, Latin America and Asia Pacific (approximately 80% of the world’s population), cites social and casual gaming platforms as the drivers of accelerating wealth growth over the next four years. These will account for 68.7% of total revenue in 2023, and are expected to reach 76.4% by 2028.
According to PwC, this trend will cause traditional gaming to decline from 28.6% to 21.4% of the industry over the next five years. Esports (competitive video games) and in-game advertising have also been seen as major revenue sources in recent years, but they are expected to remain a “very small component” of less than 3% of total revenue by 2028. Of course, the first Esports World Cup currently being held in Saudi Arabia will aim to change this situation.
Asia Pacific will play a role in driving the transformation as it is the largest revenue generating region for video games and esports. In 2023, the region generated revenue of $109.6 billion (48.1%), but PwC expects it to reach $181.8 billion (54.4%) by 2028. The market continues to expand, and while Japan and China remain gamer hubs, the company cites Indonesia and Pakistan as key countries for growth.
While industry revenues have traditionally been characterised by game purchases and subscriptions, PwC says in-game advertising will become more prominent. In-app revenues from social and casual games are forecast to surge from $82.9 billion to $147.9 billion by 2028, while in-game advertising revenues are expected to grow more slowly from $72.4 billion to $106.6 billion.
PwC cites the rumoured 2025 launch of the Nintendo Switch successor as a key driver, along with “investment in new products, new technologies and new business models.” Younger generations are expected to continue to drive the market, and PwC also noted that Disney and Epic Games are currently working to combine Fortnite with popular content series from Star Wars, Marvel, and Pixar.
> Industry revenues have traditionally been characterized by game purchases and subscriptions, but PwC says in-game advertising will become more prominent.
I have the impression that the Japanese game industry has been almost completely taken over by smartphone games, but I wonder if that’s really true. There aren’t any interesting new releases or big titles. Nintendo has a lot of games that seem to be aimed at kids. In recent years, I have a strong impression that From has been doing well with Elden Ring and AC.
>>29 For many years, Japanese companies have been exploiting smartphones with garbage, so the market is gradually shrinking and people are starting to wake up. Also, they can’t keep up with the high quality of Chinese games. CS is being done by Nintendo and Capcom From, but the head of Capcom’s Monster Hunter division said that development costs are rising so the price of software should go up, but if that happens, I think people will stop buying and wait for sales.
Nintendo, Capcom, FromSoftware, and Nihon Falcom will probably survive, but the rest… I think it would be better for the world if Square Enix went bust soon.
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