According to a recent report from Midia Research, the global video games industry is projected to exceed $300 billion in annual revenue by 2030, with an estimated worldwide audience of 3.8 billion active players. This anticipated growth is significant, given that the pace of expansion in the gaming sector has arguably peaked, as artificially fueled by the COVID-19 bounce in 2020 (26.3% growth) and 2021 (9.8%), which was followed by a 5% decline in 2022.
While global revenues are expected to return to growth in 2023, the rate of expansion will remain below the inflation rate. Inflation will set the backdrop for the industry’s future, and growth is not projected to exceed low to mid-single-digit percentages throughout the remainder of the decade.
In the face of these challenges, the report identifies a potential saving grace for the gaming industry – in-game spending, particularly in cosmetic items. As consumers spend more of their lives in digital environments, the need to define their image and identity in these spaces grows. Unlike paying for a game, the potential for paying for image and identity definition through in-game items is virtually unlimited, offering substantial potential upside for developers and publishers.
The report forecasts that after a minor dip in 2022, the industry will experience modest growth of 4.4% in 2023, resulting in global revenues of approximately $223.1 billion. This growth will occur against a backdrop of 6.5% global inflation projected by the International Monetary Fund. The number of active players in 2023 is expected to increase to 2.88 billion, up from 2.73 billion in 2022.
The report also highlights the rising trend of gaming subscriptions. It anticipates that there will be 180.6 million active game subscriptions by the end of 2023, generating $11.7 billion in revenue. However, these subscriptions will only account for 5.2% of global gaming revenue, with in-game purchases making up the majority at 67.2%.
In-game spending is set to reach $125.7 billion in 2023, with cosmetic purchases surpassing progress-based in-game spending, bringing cosmetic items to the forefront of the market. This shift is attributed to the growing popularity of mobile gaming, with mobile leading in revenue at $105.2 billion. Console gaming follows with $45.3 billion in revenue, while PC gaming contributes $36.4 billion.
Although the growth pace of the gaming industry may have slowed, the authors of the report suggest that gaming’s resilience during economic hardships, coupled with the attractiveness of subscription models for cost-conscious consumers, can contribute to the industry’s continued growth. The industry’s trajectory for the next decade is expected to be significantly influenced by the increasing player population. Several factors are driving this expansion, including a growing global population, greater access to the Internet and smartphones in emerging markets, and increased participation of older consumer segments.
These are certainly positive developments, particularly considering the recent 9% decline in venture funding within the gaming industry in Q3 2023.