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U.S. to Overtake China as the Biggest Gaming Market

U.S. to Overtake China as the Biggest Gaming Market

Gaming Jun 18,2019 0

The U.S. this year will surpass China as the largest gaming market by revenue for the first time since in 2015, partly thanks to Beijing's freeze on new game approvals last year.

According to the 2019 Global Games Market Report released by gaming analytics company Newzoo on Tuesday, there are now more than 2.5 billion gamers across the world. The firm is predicting that consumers will spend $152.1 billion on games in 2019, representing an increase of +9.6% year on year.

Console will be the fastest-growing segment this year, growing +13.5% year on year to $47.9 billion in 2019, according to the report. This is the second year running that growth in console games will outpace mobile gaming growth, after last year’s regulatory changes in China, as well as the absence of new global blockbusters, signaled slowed growth for mobile games. Rising anticipation toward the next generation of consoles is also expected to slow down the market during the second half of the year.

Mobile gaming (smartphone and tablet), meanwhile, remains the largest segment in 2019, growing +10.2% year on year to $68.5 billion—45% of the global games market. Of this, $54.9 billion will come from smartphone games. PC gaming will be both the smallest and slowest-growing segment, increasing +4.0% year on year to $35.7 billion. Despite the segment being smaller in size, PC’s status as the bedrock of innovation in the games market remains evident to this day. Nearly all of the most popular game genres, including battle royale and MOBA, can trace their roots back to PC gaming’s modding community.

According to the report, in 2019, the U.S. will overtake China as the world’s largest gaming market by revenues. Overall, the U.S. games market will generate $36.9 billion this year, predominantly driven by its +13.9% growth in console game revenues. At $18.5 billion, console represents more than 50% of the total games market in the U.S.. Meanwhile, China’s nine-month licensing freeze on new games, as well as measures to reduce screen time among children, are still felt throughout 2019. Publishers, however, are now able to monetize their new games once more, but the consequences of the freeze and new approval process will still impact growth in the Chinese market this year. Japan, South Korea, and Germany round off the top five countries by game revenues in 2019.

In the report, Newzoo also presents forecasts for the global games market toward 2022. Consumer spend on games is expected to grow to $196.0 billion by 2022, a CAGR of +9.0% between 2018 and 2022. Mobile gaming will generate revenues of $95.4 billion in 2022 and account for almost half of the entire games market. This will be driven predominantly by smartphones, with revenues of $79.7 billion by 2022. Although mobile is indeed still the world’s fastest-growing games market segment, growth is slowing in mature markets such as North America, Western Europe, and Japan. Emerging markets, including Southeast Asia, India, and Middle East & North Africa, will contribute most to the segment’s growth. However, a range of other factors are also contributors, including more cross-platform titles, more smartphone users, and improvements to both mobile hardware and mobile Internet infrastructure, including the rollout of 5G networks.

Newzoo expects revenues generated by the console segment to reach $61.1 billion in 2022, increasing with a CAGR of +9.7%. These revenues will dip slightly from the second half of 2019 to 2021, as the imminent release of the next-generation Xbox and PlayStation consoles will see consumers spending most of their gaming budget on hardware. However, the upcoming new Switch model(s), as well as the massive installed base of the previous (now current) console generation will contribute to healthy growth in the segment.

The overall PC gaming market is expected to grow with a CAGR of +3.5% to total $39.5 billion by 2022. The ongoing consumer shift from browser PC games to downloaded/boxed PC games will reduce the browser segment’s revenues by almost half from 2018 to 2022. Downloaded/boxed PC games, though, will grow with a CAGR of +5.4%, generating $37.3 billion by 2022.

Growth in mobile game revenues will continue to outpace growth on PC in the coming years, resulting in a shrinking PC market share toward 2022. Mobile will also outpace console’s revenue growth; yet, console’s market share will remain relatively static.

Tags: GamingGaming consolesMobile Gaming
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