How Did The Rising Popularity of Online Gaming Bring Back a Love for Other Games?
Preview of the Online Gaming Industry: Online games in the United States are expected to bring in $3.588 billion in revenues in 2020, up +1.1% year-on-year, according to research analysts from Statista. The Compound Annual Growth Rate (CAGR) is forecast at 0.6% between 2020 – 2024. All things being equal, this will result in a market volume $3.668 billion by 2024. Currently, stats indicate that US online gaming penetration among users is 19.3%, and this will likely rise to 19.6% by 2024. Current trends indicate that the Average Revenue Per User (ARPU) is hovering in the region of $56.30.
While the US market is certainly substantial, it pales in comparison to the Chinese market where 2020 figures anticipate a market volume of $4.249 billion. With some 63.7 million online gaming users in the US in 2020, the market has grown at a steady clip of 1.3% year-on-year. The figures for online games worldwide indicate 2020 revenues of $17.141 billion, at a growth rate of 1.2% year-on-year, and some 877.3 million users, up 6.1% year-on-year. Worldwide, the user penetration rate for online games is 11.8%, but that is expected to grow to 13.0% by 2024. Video games represent one of the fastest-growing segments of the online gaming industry, with 2020 revenue figures indicating total revenues of $87.441 billion worldwide.
The worldwide figure is substantial and represents a 5.2% year-on-year growth rate. The total number of video game users in 2020 is expected to top out at 2.1595 billion people, with a rampant growth rate of 7.2% year-on-year. A 2.2% compound annual growth rate is anticipated between 2020 – 2024, with market volumes in 2024 of $95.388 billion. Of all the online games available to players, mobile games dominate with a 2020 market volume of $52.085 billion. Current user penetration rates are 29.1% and that is expected to rise markedly to 32.7% at the end of the 4-year period.
The Online Gaming Industry is Giving Impetus to the Online Gambling Industry
Source: Pixabay No Attribution Required
The increasing move towards the liberalization of the global online gambling industry has also helped to spur an accelerated increase in user numbers. The UK, the most developed online gambling market in the world, is also the most structured gaming market of all. With billions of pounds in revenues annually, the UK boasts a fairly even split between male/female players who are 18+ years of age. The UK is home to a smattering of world-class online casinos which has established a solid reputation among players, by dint of its responsible gaming conduct, massive online game variety, immersive user experience, and customer service.
In the US, online gaming is also taking off thanks to the recent overturning of the PASPA (Professional and Amateur Sports Protection Act) of 1992. Now, individual US states can determine for themselves whether they wish to regulate online sports betting within their geographic boundaries for legal-age players. Increasing access to online sports betting has facilitated increased interest in online casino gaming at the state level across the country. New Jersey, Delaware, Nevada, Pennsylvania, West Virginia, and scores of other states have either legalized or are in the process of legalizing online casino games for players in their states.
Global Gaming Industry Trends
Source: Broadbandsearchnet ESA 2018 Sales, Demographic, and Usage Data Release
Given the massive scope of the global gaming industry, various studies have been commissioned to identify the growth rates of this industry. One such study was compiled by NewZoo, titled the Global Games Market Report. The annual figures for the global gaming industry have shown a steady increase since 2013 when the data was first to collect. Based on the available information from NewZoo, the following can be gleaned from the gaming revenue figures:
- 2013 – $76.5 billion
- 2014 – $84.8 billion (10.84% increase)
- 2015 – $93.1 billion (9.79% increase)
- 2016 – $106.5 billion (14.39% increase)
- 2017 – $121.7 billion (14.27% increase)
- 2018 – $137.9 billion (13.31% increase)
- 2019 – $151.9 billion (10.15% increase)
Every study analyzes different components of the global gaming industry, and given its size and scope, no two studies will provide the same results. The NewZoo study found that there were approximately 2.341 billion gamers globally in 2018, rising to 2.725 billion gamers globally in 2021. It is notable that the gaming revenues generated from video games have been substantially larger than revenues generated through the movie industry and the music industry combined.
In the USA alone, some 2700+ companies produce video games, and there are tens of thousands of people working behind the scenes to bring these games to the public. Video games constitute a large component of the overall online gaming market. While trends are changing, most games are on PC, followed by tablet and smartphone devices, PlayStation four consoles, Xbox One consoles, and Mac computers. Other options include browser-based games, virtual reality headsets, and Nintendo Switch.
Older Adults Are Taking to Video Games in Their Droves
A report in AARP from December 2019 confirms what so many seniors already know: video games are increasingly popular in the older generation. A large and growing number of people aged 50+ are now taking to video games, as evidenced by the numbers – 40.2 million players in 2016 and 50.6 million players in 2019. The study from AARP is encouraging to the industry, and to players of all ages. An online survey found that 3,737 people 50+ years of age enjoy interactive online games played on computer, tablet, smartphone, Xbox, PlayStation. The largest growth rate in this sector was in the 50-59 age group.
Substantial sums of money are being spent on gaming for this age group, with figures in the region of $3.5 billion from January through June 2019, substantially more than the $523 million that was spent in 2016. Women also constitute a large component of the gaming audience, as many as 49% of women overall from the sample group. Extrapolating to the broader society, Variety found that 67% + of Americans now play video games, based on the Electronic Entertainment Design and Research Study. All of this bodes well for all forms of online gaming, including a resurgence in virtual sports, online casino, online bingo, online poker, scratchcard games, keno, and others.
The top 10 gaming countries (2018 figures) include the following listing:
- China – $35.526 billion
- USA – $25.46 billion
- Japan – $14.048 billion
- Germany – $4.430 billion
- UK – $4.238 billion
- South Korea – $4.203 billion
- France – $2.977 billion
- Spain – $1.918 billion
- Canada – $1.968 billion
- Italy – $1.881 billion
*Numbers subject to fluctuation since 2018, but top 10 listing remains largely intact.
Interesting Facts about Online Gamers from the NewZoo Analysis
The average age of the typical female gamer is 36 and the average age of the typical male gamer is 32. While most gamers are male, an increasing number of females are flocking to online gaming as a fun-filled pastime. Some 45% of all players are female, and their preferences are action and adventure, followed by strategy-based games, and a large minority of simulation-style games. All the statistics from all the studies show a shift towards mobile gaming. Back in 2018, 51% of all revenues generated by games were mobile-based revenues.
That figure amounted to $70.3 billion for the global gaming industry. By 2021, NewZoo analysts anticipate a figure of $100 billion +. Popular games like Fortnite spend significant sums of money on the gaming experience, and this is encouraging to the industry. This game, like many other free-to-play games, is also a freemium game where players can pay for additional benefits, power-ups, and resources.
Whether it’s social games, video games, or online casino games, there is an unambiguous move towards online gaming and it’s spurring a massive resurgence in players’ love for other games too.