2.7 billion gamers will spend $159 billion on games in 2020

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Provided by Newzoo

According to market researcher Newzoo, 2.7 billion gamers across the world will spend a combined $159.3 billion in video games throughout 2020. Research indicates that by 2023, the gaming market will exceed $200 billion.

A look at the research

The spending level for 2020 represents a 9.3% growth compared to 2019. This figure represents revenue generated across mobile, PC, and console gaming. Newzoo’s research expects revenue for video gaming to grow at a compound annual growth rate of 8.3% per year, which equates to $200.8 billion by 2023.

Due to the Coronavirus pandemic, Newzoo believes that gaming has become a main method of escapism and a time filler for many individuals. One of the main growth drivers this year is due to the Coronavirus lockdown measures. This figure also anticipates the launch of next-generation consoles releasing toward the end of the year.

The overall 2020 forecast is based on higher engagement, which drives revenue higher. Some caveats exist, mostly relating to delayed releases, though anticipation for next-generation consoles will help to drive revenue up significantly.

Mobile gaming revenue growth

All gaming segments have seen an increase in engagement and revenue as a result of Coronavirus lockdown measures. But of all the sectors, mobile saw the largest increase. Mobile games is expected to generate revenue of $77.2 billion in 2020, a growth of 13.3% over 2019.

Mobile witnesses more growth than PC and console gaming for a number of reasons. Mobile gaming has the lowest barrier to entry due to more than two-fifths of the global population owning a smartphone. Factoring in also that many mobile titles are free to play, it is quite easy to see why so many play mobile games. In addition, mobile gaming is an ever-growing alternative to PC cafes. Numerous cafes have been closed throughout China, which has led many to turn to mobile gaming.

Newzoo anticipates a further increase to engagement. It’s incredibly difficult to convert players into players on mobile. Globally, of the orld’s 2.6 billion mobile gamers in 2020, only 38% will actually pay for the games they play. As the pandemic restrictions are lifted, Newzoo anticipates a correction to happen to mobile gaming.

Console gaming revenue growth

In comparison to mobile gaming, console gaming is expected to grow by 6.8% year-on-year. This amounts to a total of $45.2 billion in 2020 with more than 729 million players. Engagement and revenue are anticipated to grow significantly due to lockdown measures, at least over the short term.

Still, the Coronavirus pandemic is having a negative effect on console gaming. Physical distribution, cross-company collaboration, and certification are a major part of console game development. As a result, this may delay games in the future or force games to scale down features to hit release dates.

Growth in the console gaming market has slowed somewhat in comparison to 2018. This is due somewhat toward the anticipation for next-generation consoles. The impact of this means lower-than-expected spending on consoles last year. So Newzoo has adjusted the 2019 global games market estimate to $145.7 billion.

PC gaming revenue growth

PC gaming is driven by 1.3 billion players and expects a 4.8% year-on-year growth to $36.9 billion in 2020. Much of this growth is attributed toward the Coronavirus lockdown. In comparison to console gaming, new releases for PC don’t often reach revenues that significantly change the market outlook. Many popular games for the PC market remain at their respective positions for at least three years, whereas some retain popularity for upward of a decade.

The PC ecosystem moved toward a digital (over physical) method of distribution significantly faster than console did. As a result, physical distribution for PC is almost entirely a non-issue. However, the PC segment isn’t completely unaffected by the pandemic: many PC titles are being delayed, including the PC port of Death Stranding.

Looking across all three segments of video gaming, half of consumer spending on games is expected to come from both China and the U.S. in 2020.

Ryan Goodrich

Ryan has been writing since long before he could even write. He's written resumes, software user guides, consumer electronic reviews, and myriad web content spanning a variety of industries. But now he's writing about video games, which is much more interesting.

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