While video games may seem like fun and games, they are a serious business. Between consoles, PCs, and mobile devices, the total global video game market drove $134.9 billion in revenue in 2018. UBS projects growth to $174.0 billion for 2021, creating a potential opportunity for investors interested in this space, according to a new US equities report from the UBS Chief Investment Office.
- North America makes up just 25% of global video game revenue. Asia-Pacific is the largest region with 49% of revenue.
- The projected video game market is worth $148.1 in revenue in 2019 and is forecasted to grow 8.4% through 2021.
- PC and console games remain a large revenue generator, but new platforms and mobile gaming are growing at a much faster rate.
Mobile devices and online publishers are poised to dominate
If you reminisce about the old days of playing Atari or Super Mario, you may be missing out on current trends. Although revenue growth is slowing, the overall video game market continues to expand with new innovations and revenue opportunities.
- The overall video game market grew 11% in 2018 and is forecasted to grow by 8.4% annually from 2019 to 2021.
- Next generation consoles are expected in the next year or two, though new devices like Oculus from Facebook and Gear VR from Samsung bring new capabilities.
- The Asia-Pacific markets make up 49% of revenue.
In-game purchases and eSports are changing the landscape
Many people think of video games only as systems connected to TVs. Now the most popular gaming device is already in the pockets of smartphone users around the world.
- Games like “Fortnite” have become a cultural phenomenon. Players can start for free, but paying to unlock additional features is a major revenue driver. Fortnite alone is estimated to have earned $2.5 billion in sales last year.
- eSports is quickly becoming a respected and well-viewed industry. Top players can earn six-figures monthly while sponsors flock to grab the attention of millennials and generation Z demographics who want to watch the best players compete.
- Subscription services are emerging that allow users to play games on a variety of devices without purchasing a console or downloading the full game to their device.
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