The global gaming software market continues to penetrate the global entertainment sector, with revenue growing 7% in 2021 to reach $170 billion. While this does mark a slight dip in growth compared to 2020, it still represents a largely positive year for the gaming industry overall. That’s according to a new market report from Futuresource Consulting.
“Growth in 2020 was heavily influenced by the boom in entertainment spend during lockdown,” says Maxym Dmytriyev, gaming research analyst, at Futuresource Consulting. “When seen in this context, 7% growth represents another strong year for the gaming industry.”
Even post-lockdown, consumer interest has not waned, with next-gen consoles from both Sony and Microsoft remaining extremely strong among gamers. In fact, the combined console segment grew 50% last year, despite ongoing supply-side issues limiting the amount of stock in stores.
For the handheld segment, sales were less than positive, declining 13% from 2020’s pandemic-induced high. Yet, despite this decline, last year saw just shy of 24 million units shipped globally, which was higher than the pre-pandemic in 2019.
While the term downloadable content (DLC) invites strong opinions among the gaming community, DLC continues to be the driving force behind digital software success. In fact, DLC accounted for a sizeable chunk of all software spend, ending 2021 at 60%, largely facilitated by in-game purchases.
“DLC is likely to remain the driving force of the gaming industry,” says Maxym. “With the advent of subscription gaming, we expect gamers to play games they otherwise wouldn’t have bought. As such, these consumers are likely to diversify their spending across a wider variety of games.
“Physical games have observed a decline across all platforms, reaching 31% market share. However, handheld devices drove most of those sales, and now, the fact of physical games hangs in anticipation of the next Nintendo Switch console,” he continues. “Switch consoles tend to drive sales post-launch. Therefore, the segment is expected to pick up momentum towards the tail end of the forecast period.”
Mobile gaming, once again, performed strongly in 2021, growing 6.5% to reach $87 billion. This accounts for more than half of total gaming software revenues.
In Latin America, gaming spend is booming, with an 18% year-on-year growth, despite being one of the smaller markets, at 4% market share. This is down to a growing mobile gaming audience, which accounts for 70% of the population, coupled with parents embracing youth gaming as a path towards economic mobility.
Equally, PC gaming spend also continues to grow, benefitting from renewed Sony investment in PC sports, as well as a rise in laptop gaming – evidenced by product range expansions seen at CES 2022.
Additionally, the grassroots proliferation of subscription and cloud services since 2018, and growing investment from key players in the space, are democratising gaming. This opens the market up to a wider addressable market, for whom, current combined costs of building gaming rigs, technical know-how and complexity of PC pose a significant barrier to entry.
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