It's just a game
After a magical evening exploring Hogwarts Legacy, delving into the gaming market seemed only right this morning.
Did You Know: The video game sector is larger than the movie and music industry combined.
The market grew by 26% from 2019 to 2021 as millions of new players got involved during COVID-19 lockdowns.
The industry is set to maintain its rapid growth and could be worth $321 billion by 2026, according to a PwC report.
Men aged 15-24 in the US spend 1.82 hours per day gaming in 2022, compared to 1.08 hours in 2019 (See Graph). That's a 70% increase in three years.
3.36 million consoles were sold in the UK in 2021. Sales slumped in 2022, reaching just over 2 million. This would have been primarily due to stock shortages from supply chain issues. The shortages are long gone: PS5 sales were up 81% in the first 5 months of 2023 compared to 2022.
The Nintendo Switch - like the one we are testing here - is the best-selling console in the UK and worldwide - over 20 million units are shipped per year!
China and the US dominate the gaming market - currently accounting for about half of gaming and eSports revenues. However, developing countries such as Turkey, Pakistan and India are rapidly expanding their network of gamers, so expect to see a more even distribution by the end of the decade.
Why is gaming thriving?
Talent: The games are better; more fun; more addictive. Developers clearly understand human psychology better than just about anyone else.
Technological advancements: Graphics and performance just keep getting better. VR and AR create more immersive experiences.
Incentive: A $300 billion + growing market is a pretty attractive proposition.
Accessibility: Anyone with a smartphone can play a decent game. Consoles and devices are becoming universal, especially in poorer countries, where most people can now afford them.
Social and streaming: Gaming has transformed into quite a social activity. Gamers and influencers alike can connect and build communities within games and on platforms such as Twitch, YouTube, Reddit, Discord etc.
Variety: There's something for everyone: casuals, young and old, boys and girls, and all personality types.
Time to level up
There are currently 3 big players in the market that you know about: Sony, Microsoft, and Nintendo. Then there are a few giant game developers (See Table).
The other big tech companies are really eyeing up their slice of the pie at the moment. Apple, Meta and Google are investing millions of dollars and man-hours into gaming products. Games have officially been promoted from side quest to main quest. It will be really interesting to see what they come up with. These three, along with Microsoft, are front-runners in AI - a technology which could accelerate progress in numerous directions.
Will this disruption result in massive innovation & growth? Very likely. There's never been a better time to be a gamer, or better yet, a game developer.
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