Looks like those who want to predict the end of consoles will have to wait another 10 years and try again next time. Billions of dollars of new income will flood the video game industry between 2018 – 2023, and the majority of it will be in the console gaming space. Research into the trends that will dominate the digital video games market for the next five years throughout the regions of Europe, India, and Asia-Pacific has been released by the world’s largest Market Research resource this week and the results do share some interesting insights, although not completely surprising.
COMPOUND ANNUAL GROWTH RATES
It is expected that, according to the Europe Digital Gaming Market report, the CAGR (Compound Annual Growth Rate) of video games in Europe will grow by 9.7% resulting in over $30 Billion (USD) of revenue for the game industry.
In India we will see the presence of internet and smartphones increase as well as the country’s general output of video games, as the country now provides a home for over 200 development studios. Console gaming will also grow alongside mobile and PC segments with digital games still struggling in rural areas that do not have significant internet speeds.
Asia-Pacific (includes India) has an expected CAGR of 23.1% resulting in an incredible $241.56 Billion (USD) industry by the time 2023 arrives. This market is predicted to be the largest digital games software demographic in the world by that time. The gaming console ban being lifted in China will make it possible for a massive amount of new sales once next-generation hardware hits.
Also, mobile games have a popularity in Asian countries that is unlike anywhere else. Additionally, lootbox scandals haven’t effected countries like Japan and China at all. Companies producing smartphone games exclusive to Asia continue to allow the mix of much heavier gambling elements into video games compared to western governments regulating and banning such income streams.
The resurgence of success among Japanese game publishers and developers will also play a key role in the Asia-Pacific revenue stream. Titles like Resident Evil VII and Resident Evil 2 Remake have restored Capcom to respected status while Square Enix has also won back the support of fans. SEGA, Bandai Namco, Sony, Nintendo, Koei Tecmo, SNK, Kairosoft, From Software, Kojima Productions, Level-5, PlatinumGames, and Nippon Ichi Software are among the many companies that have had a mostly positive reputation among gamers which will enable them to generate vast amounts of income over the next five years.
The glory days of Japanese gaming are back!
CONSOLE GAMES MAKE THE MOST $$$
One notable factor in each report that has come up multiple times is the fact that past research last decade was erroneous in declaring mobile markets would overtake or kill off console gaming revenues. Indeed, Nintendo Wii, PlayStation 3, Xbox 360, PlayStation 4, and Nintendo Switch, and even Xbox One to a lesser extent are shining example that video game consoles won’t be going anywhere anytime soon.
The mistake that was made in the past was that the rapid growth of smartphone video games revenue would somehow be competing with the traditionally larger game console income. That has not been the case, as instead, smartphones generate their own demographics that are not the same user-base of players as those who buy consoles.
The console gaming market continues to expand alongside its PC and smartphone sister markets, but console gaming software continues to be the largest money maker for the industry as of 2017 and new Market Research confirms that this is expected to remain the case into the future as far as 2023 and possibly beyond.
This makes a lot of sense if you stop and think about it. We could see a number of huge titles such as Bethesda’s Starfield and The Elder Scrolls VI projects announced during the Bethesda E3 2018 show launch with most of its audience preferring to play on consoles such as the PlayStation 5. This generation there’s still titles like The Last of Us 2 and Death Stranding which dominated a large chunk of Sony’s E3 2018 show.
Microsoft certainly believes that console gaming will be worth investing heavily in, given that they’ve acquired 4 new studios and created 1 from scratch while pledging at Xbox E3 2018 to spend hundreds of millions on crafting New IP for their next xbox console, currently code-named Project Scarlet.
With a large amount of New IP coming to consoles (Days Gone, Generation Zero, Twin Mirror, just to name a few), classic games being remade to huge success, and general positive outlooks from most game companies on the future of console gaming, these reports help confirm what we already know. The game industry is finally getting back on track to doing what it does best, providing quality interactive entertainment to the hardcore gamers in exchange for billions of dollars in software sales mainly taking place on dedicated hardware built specifically for the purpose of playing video games.
Long live PlayStation, Nintendo, and Xbox. Ignore the nay-sayers, console gaming is here to stay – and no, it’s not going to cloud…
*If you’d like to purchase the Market Research reports referenced in this article you may visit ResearchAndMarkets.com although they range from $1,500 – $5,000 each on average, since they are meant to be useful tools for large companies investing millions of capital into future projects. Some Info Sourced: BusinessWire