To understand the importance of the gaming market in the digital entertainment economy, it would be sufficient to keep an eye on the numbers that, more and more often, are presented to us by companies specialized in market analysis. These data are often available for free, and constantly updated on the basis of sales reports whose trend is now constantly growing. The Newzoo company, in particular, has released its own quarterly update on the revenues of the gaming market on a global scale, from whose study follows an upward retouching around estimates of the increase in industry earnings, quantified in the incredible magnitude of 19,6% more than the previous year, for a total projected proceeds in 2020 of 175 billion dollars!
To realize the value of this figure, just think that in 2018 the global turnover of the film and music industries amounted to 78 billion (42 cinemas + 36 music). In short, it is now an established fact that gaming is the most profitable sector of the digital entertainment market, and the gap with the other sectors is widening more and more from year to year. The Newzoo report exceeded the growth estimates of the same analysts, with a surplus of 15 billion over the forecasts made at the beginning of the pandemic. In short, it is evident that the spread of COVID around the world has greatly favored the growth of the video game market, which was already good for him. It is therefore worthwhile to enter into the merits of these numbers to analyze the trends of this crazy 2020.
Without borders
Just take a quick look at the graph above to realize the prosperity of the market in question: Year-on-Year growth rates (therefore compared to 2019) are positive all over the world, and double-digit! In particular, there are two most impressive numbers: + 30,2% growth in the Middle Eastern and African market (a truly abnormal increase, although in absolute terms the geographical area in question represents a minority slice of total revenues; but with such growth, in the coming years we can expect that it will cover increasingly significant shares) and that 48% indicating that nearly half of all industry revenues come from the Asian market: this is due in large part to the ever increasing role of China, which alone generates 44 billion dollars in turnover, thanks to the ever more explosive opening of its internal market, made up of billions of potential gamers, as well as conglomerates of developer and continuously expanding publishers. A few examples? Tencent's purchase of Riot Games, which then becomes the owner of the IP league of legends; the ownership, again by Tencent, of 40% of Epic Games and of minority stakes in other Western giants such as Activision-Blizzard, Paradox and Ubisoft; the recent worldwide success of Genshin impact, which demonstrated the value of the MiHoYo software house, capable of developing a title that has appeal for a global audience.
It was said above that the pandemic has had positive effects on the gaming market: it is certainly true that, in times of lockdown and social distancing, playing online with friends has been a significant psychological relief for many people, and has contributed to the growth of the public from all over the world. Newzoo's previous statistical research has shown how socialization is in second place of the main reasons that led users to spend their time playing video games: in this case, the lion's share was obviously played by online video games, thus explaining the success of titles such as Fall Guys o Among Us, which went beyond the rosiest expectations of the developers. It is not the case to enter into the examination of individual titles, but to give an idea of the size of the phenomenon, suffice it to say that in August this year Twitch broadcasts dedicated to Fall Guys reached peaks of 40 million hours of viewing by the public: more than Fortnite, CoD and Minecraft!
Anywhere and anyway
Not only are we playing more and more all over the world; also the "where and how" is played records incremental values on any platform considered: mobile, PC and console, as the graph below shows. From this we understand the increasing importance of mobile gaming, which generates almost half of the total revenues of the industry, with all due respect to the haters of casual gaming.
Mobile gaming is not only the most profitable sector, but also the fastest growing one, and the reason is soon said: almost everyone now has a smartphone, and consequently has the hardware resources to run a game on the go. This is undoubtedly the main reason that has encouraged the entry into the gaming market of a range of users who would hardly have been willing to invest money in the purchase of ad hoc devices for video games, due to personal taste, prejudice, poor interest or lack of time. Conversely, why deny yourself a level of Candy Crush between a trip on the metro and another? And the (video) game is done.
Excellent result also for consoles: a + 21% was not at all obvious, given that in the years of generational change it is usual to observe a decline in hardware sales. Also in this case the virus has got a hand, helping to keep sales high. As regards the PC market, the decline in revenues generated by browser games was almost totally balanced by an increase in retail and e-store sales; although the YoY growth is therefore more modest than the other platforms (+ 6,2%), it is still a highly positive balance.
Ultimately, some exciting conclusions can be drawn: if growth rates were to remain constant, in 2023 the gaming industry would generate revenues for the astronomical figure of 217,9 billion dollars! This would mean, in the five-year period 2018-2023, an increase in the value of the global gaming market of 9,4%.
Obviously, no one can predict the near future, in particular with regard to the evolution of the Coronavirus pandemic: if the restrictive measures (necessary, mind you!) Continue for a long time, the resulting contraction could result in a depressive phase of the economy, with consequent reductions in expenses for non-essential items, including video games. Only time will be able to give us precise answers in this sense, in the meantime we can rejoice at these numbers, a symptom of an industry that is flourishing and destined to increasingly enter the entertainment choices of the population around the world.
It's Italy?
In conclusion, it is useful to look at our country: in September the IIDEA 2020 report, according to which Italy boasts a base of 17 million gamers, which in 2019 generated revenues of 1,78 billion euros (+ 1,7% on an annual basis).
Numbers that mark a growing trend, therefore in accordance with global trends. Certainly it is a modest economic sector when compared to other European countries (up to 4 billion in countries such as France, Germany and the United Kingdom), but in constant development. The credit is also due to the growing success of eSports, whose increase in audience and revenues has always been monitored by IIDEA: you can know the details of the eSports 2020 Report through our summary. What is still missing is a greater propensity to invest, as well as greater forms of state support, which are very timid, although useful, for now. Ultimately, the problem is strictly cultural; this is in fact the idea of the president of IIDEA Marco Saletta on the question:
In a historical moment in which the transition of the manufacturing industry from human to automated work is undermining the foundations of half the world's welfare, a state that does not focus on the future by investing in a sector like ours commits a macroscopic mistake of perspective. .
Effectively summarizes Valerio Di Donato, CEO of 34BigThings:
Culturally we are very attached to the physical and heavy conception of industry: producing bolts is a serious job, making toys or video games clearly not.
All is not lost - the economic conditions of the reference market are rosy and the potential audience is constantly increasing all over the world - but it takes courage on the part of companies and institutions not to waste the favorable moment for the birth of a finally mature and complete española videogame industry, which can play a leading role on the international scene.
After all, the world is starting to look to Italy and its most promising software houses: did you know that 34BigThing has just been acquired by THQ Nordic?
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