Long on Video Gaming: Total players worldwide projected to surpass 3 billion by 2023, mobile gaming/in-app $ drive growth
By Daniel Carnahan, Business Insider
Report Summary:
8% of US broadband households report they have subscribed to at least one new OTT service since the COVID-19 crisis began, 49% of these subscribed to Disney+ and 27% subscribed to Apple TV+
54% of US broadband households now own a smart TV
76% of US broadband households had an OTT subscription in Q1 2020
8% of US Broadband Households Trialed Four or More OTT Services During COVID-19 Crisis
Feature:
In just three years, the total number of global video game players will hit a milestone — surpassing 3 billion — according to new estimates from gaming research company Newzoo. This figure reflects a compound annual growth rate (CAGR) of 5.6% for the period between 2015 and 2023, with over 1 billion new players added within the eight-year period. The gaming industry has seen a surge in growth recently, as stay-at-home orders drive new demand for home entertainment options: This year, the number of total global players will grow 5.3% to reach 2.7 billion, according to Newzoo.
This upward trajectory is primarily driven by the adoption of mobile games, especially as smartphones become more accessible in emerging markets. Broken down by platform, of the 2.7 billion gamers playing this year, 2.5 billion will play on mobile, 1.3 billion on PC, and 0.8 billion on console. There is a higher penetration of gameplay on mobile devices than on PC or console for two reasons:
The free-to-play monetization model that most mobile games operate on — when games are powered by ads or funded through in-game purchases — significantly reduces the barriers to entry for potential players especially those with less disposable income.
Widespread improvements in internet infrastructure and more affordable prices for smartphones are making mobile games significantly more accessible for many consumers in emerging markets like those in the Middle East and Africa, and Latin America.
But despite the free-to-play model, a growing number of mobile games receive substantial revenue from in-game spending. For example, there is a growing number of mobile gaming apps that exceed $5 million in consumer spending worldwide — last year there were 1,121, a 17% increase from 2017. For context, this in-game spending is concentrated in core gaming genres like role-playing games (RPG) and strategy games, at 38% and 17% of consumer spending, respectively, according to App Annie data. And this rise in in-game spending is further spreading to the whole industry: The share of global gaming revenue that comes from in-game transactions is projected to rise to 77% by 2023 from 70% in 2018, according to Newzoo, although this includes in-game spending across all types of devices but is still likely dominated by mobile.
Looking ahead, there are two important trends worth monitoring in the mobile gaming space:
The growth of livestreamed mobile games. Popular mobile games like Teamfight Tactics and Raid Shadow Legends are beginning to amass sizable followings on streaming platforms like Twitch. And more recently, Facebook Gaming announced a feature that allows users to stream games directly from their smartphones. As more viewers and streamers in the US develop an interest in livestreamed mobile games, there are opportunities for marketers to build out strategies for mobile games.
The growth of cloud mobile gaming. Advancements in connectivity standards and hardware functionality will soon enable users to stream premium games, traditionally reserved for desktops and PC, directly to their mobile devices. This will enable players to stream high-quality games while on the go in way consoles and desktops cannot. To capitalize on this advancement, new players like Google, Microsoft, and Tencent are either launching or have already launched their own cloud gaming services. While consumer uptake in this space has proven to be slow — Google Stadia's uptake among gamers has been infamously disappointing, for example — it does still carry the potential to disrupt how consumers think about the quality of mobile game they can expect.
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