VII. Market Environment

The global video game market
According to Newzoo analysts dealing with global gaming market, industry revenues in 2019 amounted to USD 152.1 billion. For comparison, revenues in 2018 were equal to USD 138.8 billion, which means an increase in the market value of USD 13.3 billion, i.e. by 9.6% in one year. At the end of 2020, Newzoo forecasts the value of the global gaming market at USD 164.6 billion, and at the end of 2022 already at USD 196.0 billion, which indicates an increase in the cumulated annual growth rate (CAGR) by 9.0% y / r in the years 2018-2022. [1]

 

Value of the global video game market in 2018 and forecast for 2019-2022 (in USD billion and%)

P - forecast
Source: Global Games Market Report, Newzoo, 2019

 

Forecasts indicate that the fastest growing segment will be mobile games (smartphones and tablets), whose value in 2018-2022 is to increase from USD 62.2 billion to USD 95.4 billion. It is also a segment that ranks first in terms of revenue among applications. Given the progress in the field of smartphones and their growing popularity, both in developed and developing countries, the mobile games market is able to develop further. According to the American research agency eMarketer, in the United States alone in 2016 as much as 180.4 million people, i.e. 70% percent of mobile device owners and 56% of the country's population, played games on phones. This number may increase to 213 million in 2020. [2]

The second largest segment are consoles, whose market share over the next three years will remain at a similar level of approx. 31%. In 2019, the value of this segment amounted to USD 43.0 billion, and the estimated value of the CAGR ratio in the years 2019-2022 is to be 9.7%. On the other hand, the share of computer games in the market revenues will decrease, which is expected to fall from 22% to 19% in 2019-2022, and yet the forecast CAGR in this period is 5.40%. The share of browser games in the video games market will decrease from 3% in 2018 to 1% in 2022. This is reflected in the estimated level of the CAGR indicator, which in these years will be around -17.0%. [3]

Geographically, in 2019, the Asia Pacific region will generate the most profitable region for the video game industry, generating $ 72.2 billion, or 47% of total global gaming revenue. North America came second with revenues of USD 39.6 billion (26%), third Europe, Middle East and Africa with revenues of USD 34.7 billion (23%), followed by Latin America, whose revenues amounted to USD 5.6 billion (4%). In the next three years, India and Southeast Asian countries will be the fastest growing region in the world in terms of revenue from games.

 

Share of individual regions of the world in the structure of the video games market in 2019.

Source: Global Games Market Report, Newzoo, 2019
According to Newzoo estimates, in 2019 the largest gaming market in the world will be the United States, accounting for 24.26% of revenues, which means that its value amounted to USD 36.9 billion. China will generate slightly lower revenues of USD 36.5 billion. [4]

 

The number of active video game players in the world in 2014-2016 and the estimated number in 2017-2021
(in billion)

P - forecast
Source: www.statista.com

According to Newzoo, in 2018 there were about 2.3 billion active players in the world, most of which came from the Asia-Pacific region (1.23 billion), Africa and the Middle East (330.69 million) and from Latin America (234.05 million). Similar estimates were presented by analysts from the statista.com portal, according to which by 2021 the number of players in the world will increase to 2.67 billion, which means that in 2014-2021 their number will increase by 7.3% on average.

 

Polish video games market

According to the data contained in the report 'The condition of the Polish gaming industry', in 2017 in Poland 16 million players spent a total of over USD 489.0 million on games in physical or digital form, which gives an increase of 6.3% (29.0 million USD) compared to 2016. By the end of 2019, this amount should increase to approximately USD 560.0 million. In terms of global data, the results of the domestic video game market are invariably insignificant, since the revenues generated by Polish players account for about 0.5% of the entire market.

 

Value of the Polish gaming market in 2016 and forecast for 2019 (in PLN billion)

P - forecast
Source: Report on the condition of the Polish gaming industry, 2017

In 2016, PC and console games had the largest share in the revenues of the Polish gaming market, as it amounted to 51% and by 2019 its level is expected to fall only slightly to 49%. Slightly larger decrease in market share is to be seen by PC MMO / Online games and social games by 3% and 4%, respectively. However, the mobile games segment will increase, with a 29% share in 2019 (an increase of 9% compared to 2016).

Looking at the most popular gaming platforms in Poland in 2018, as many as 59% of players used mobile devices such as smartphones or tablets. PCs came second (33% of respondents play installed games, while 34% play browser games). The results of the report also confirm the gradual expansion of the console base among Polish players - in the last three years the number of players playing consoles has increased from 10% to 28%. In 2018, compared to 2015, there was a decrease in the number of players using social games (from 36% to 26%). It can be expected that this trend will continue in the coming years, which is associated with a decrease in the number of people playing free-to-play browser games, moving to mobile devices. [5]

In the case of PC-installed games and console games, 56% of respondents decide to download free games from the web. Factors affecting the popularity of this segment are primarily low entry barriers, i.e. no fee for the product, easy access to the game and low hardware requirements. According to Newzoo's forecast on the global market, the share of free-to-play games will decrease, while the Polish market still seems stable, due to, among others expanding the audience of this type of games to include older people. Experts estimate that the share of games from the free-to-play model accounts for 45-50% of the revenues of the Polish market. In turn, the percentage of paying players depending on the platform and game genre is in the range of 1.5% to 12%. [6]

Slightly less, because 52% of respondents prefer to buy a physical (so-called boxed) version of the product. The third place was the purchase of digital versions from the web, which are popular among 34%. Nearly one in three respondents exchange games or borrow them from friends or family. 15% of respondents admit to piracy (downloading paid games from unofficial sources). Only 1% indicate other sources of acquiring new games, while 5% do not buy new games at all.

As for the sources of obtaining digital versions of new games, both for PC and consoles, they are dependent on the availability of titles on given platforms and the player's system preferences. Almost half (49%) of respondents, as the most common source of games in digital form, reports the Steam platform. Its popularity is influenced by a long internship on the Polish market and numerous promotions that Poles willingly use. The PlayStation Network platform comes second with a much lower 16%, and the Xbox Live platform third (12%). Native platforms for trading electronic versions of games - such as G2A, Uplay and Kinguin - are much less popular.

Sources:
[1] Global Games Market Report, Newzoo, 2019
[2] Report on the condition of the Polish gaming industry in 2017
[3] Global Games Market Report, Newzoo, 2019
[4] Global Games Market Report, Newzoo, 2019
[5] Polish Gamers Research report, 2018
[6] Report on the condition of the Polish gaming industry, 2017

 

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