Market Environment

Newzoo1 – a renowned global provider of games and e-sports analytics – estimates the volume of the global videogame market at 134.9 billion USD at the end of 2018, which corresponds to a 10.9% increase over the 2017 year-end value (121.7 billion USD). In 2018 very strong growth was observed in the console segment, which was estimated at 38.3 billion USD on 31 December 2018 (notable y/y increase of 15.2%).

Figure 1 2018 estimated global videogame market volume per device (in %)


Source: Newzoo

Long-term projections remain optimistic. The cumulative annual growth rate (CAGR) for the 2017-2021 period is estimated at 9.3%, with a projected 2019 year-end value of 148.1 billion USD. In a report titled “Global Entertainment & Media Outlook 2018-2022”2 PwC notes that consumers devote ever more time and resources to media and entertainment, with videogames currently ranking as the second most popular leisure activity.

Figure 2 Global videogame market volume, 2017-2021 (USD billions)


Source: Newzoo

In terms of territorial distribution, Asia and Pacific countries account for 66.2 billion USD (8.3% y/y increase), which represents nearly 50% of the 2018 global market volume. It is worth noting that China accounted for 52% of the value of the Asia-Pacific market. North America comes in second place, at 33.9 billion USD (14.1% y/y increase). The United States accounts for as much as 92% of this market value. This dynamic growth of North America is attributable to its strong involvement in the rapidly expanding console segment. Positive growth dynamics were also observed in Europe, the Middle East and Africa (13.2% growth, reaching 29.9 billion USD). China continues to rank as the world’s largest videogame market (34.4 billion USD), followed by the United States (31.5 billion USD)3. Further down the list are Japan (17.7 billion USD), South Korea (5.8 billion USD), Germany (5 bilion USD) and the United Kingdon (4.7 billion USD).

Figure 3 2019 estimated global videogame market volume by territory (in %)


Source: Newzoo

As estimated by Newzoo, mobile devices represent the largest group of gaming hardware (47% market share, 79% of which are smartphones). Consoles come in second place (28%), followed by PCs (25%). According to projections, mobile devices will account for more than 50% of the global market by 2021.

A different breakdown of the market with respect to hardware platforms has been published by ESA (Entertainment Software Association4) This study specifically concerns the US market, which is the most important region from the point of view of the Group’s activities. Here, PCs are the largest group (41%), while smartphones – though most popular globally – come in second, at 36%, which is equivalent to gaming consoles.

 

1 Newzoo Cuts Global Games Forecast for 2018 to $134.9 Billion; Lower Mobile Growth Partially Offset by Very Strong Growth in Console Segment, Newzoo, 2 November2018; accessed on 10 January 2019, https://newzoo.com/insights/articles/newzoo-cuts-global-games-forecast-for-2018-to-134-9-billion/
2 Perspectives from the Global Entertainment & Media Outlook 2018–2022, PWC, accessed on 10 January 2019, www.pwc.com/gx/en/entertainment-media/outlook/perspectives-from-the-global-entertainment-and-media-outlook-2018-2022.pdf
3 Key numbers, Newzoo, accessed on 10 January 2019, https://newzoo.com/key-numbers/
4 Essential facts about the computer and video game industry, Entertainment Software Association, April 2018; accessed on 10 January 2019, www.theesa.com/wp-content/uploads/2018/05/EF2018_FINAL.pdf