TL;DR
- Gaming is a $200+ billion annual business. Yet, despite the pervasive presence of digital gaming in our lives, there are many misperceptions and misunderstandings about the global gaming market especially in the media.
- A new report analyzed by Evan Shapiro highlights some nuances that the rest of M&E should note: Older demos are playing a lot more than you might think, and females make up a sizeable target audience.
- While free mobile games are the most popular and make for an attractive advertising target, in-game purchases are huge revenue generators and the popularity of subscription streaming is on the rise among younger players.
In media and entertainment, gaming usurped film as king a number of years ago — and its growth continues to astound. Even as Hollywood acknowledges the deep-seated popularity of titles like “The Last of Us” and “Super Mario Bros.” by increasing the number of game to screen conversions knowledge of gamer demos and habits are not as well known and stereotype attitudes remain.
“Notably, the gaming community may look different than how you perceive it — older, more female, and far less console-based than how conventional wisdom usually paints modern gamers,” says media analyst Evan Shapiro, who wrote up a survey into the U.S industry compiled by Publishers Clearing House.
“Despite the pervasive presence of digital gaming in our lives, there are many misperceptions and misunderstandings about the global gaming market — even and perhaps especially in the media,” Shapiro judges.
Gaming by the Numbers
Let’s start with some broad figures.
PCH values the global market at $200 billion which is a pretty accurate figure if we compare it to a couple of others. Analysts at gaming research specialists Newzoo have the global games market generating revenues of $187.7 billion in 2023 rising to $212.4 billion in 2026. Another report published mid-2023 by PwC expects total gaming revenue to rise from US$227 billion this year to north of US$312 billion in 2027, representing a 7.9% CAGR.
By contrast, receipts from movies worldwide totalled less than $100 billion in 2022 and is estimated to grow to $169.62 billion by 2030, according to Zion Market Research. Very approximately, the gaming industry is a third bigger than movies by revenue.
There are 3.6 billion gamers in the world according to PCH and 3.4 billion according to Newzoo. Both analysts concur that the majority of gaming takes place on the world’s most ubiquitous screen, the mobile phone.
While games like Madden, FIFA, Call of Duty and Fortnite get a lot of buzz, puzzle games such as Wordle, Candy Crush, and Fishdom, dominate game-play for U.S. adults, notes Shapiro. In July 2023, mobile puzzle game Royal Match had 16 million downloads.
“Mobile’s dominance with adult gamers explains why most gaming revenue comes from mobile,” he says.
In terms of sheer numbers, mobile gaming will continue to dominate the gaming landscape in terms of consumer numbers and spending. Per Newzoo, mobile accounts for nearly half of the global market.
Yet the analyst points out that growth has been hampered this year as developers and marketers had to revise their strategies amid privacy-related challenges. Nevertheless, in the coming years, it believes that mobile developers will adapt to the new regulatory landscape and that mobile will enjoy its first hundred billion-dollar year in 2026.
The PCH survey polled 68,000 American gamers over 25 about their gaming habits, devices, formats, genres, and spending. Where it scores is in breaking down the age and demos of those playing.
It found that, contrary to popular perception, digital games are played regularly by all ages 55 and below. Certainly three-quarters of the 25-34 demo are gamers, but so are nearly two-thirds of adults aged 35-44, more than half of 45-54 year-olds, and 40% of adults over 55.
The days of gaming as a male dominated bedroom recreation are also long gone. PCH is just the latest research to find that women are a hugely significant target audience. Per the report, younger men game at a slightly higher rate than younger women. However, that flipflops when considering the 55 and up demographic; however, a materially larger share of women over 55 say they regularly game.
Perhaps unsurprisingly, more than three times as many regular gamers play free games than play paid or a mix of both. Two thirds of American women prefer free games over paid, and men prefer free games twice as much as paid.
“Paid game use is primarily driven by younger players,” Shapiro writes. “This reinforces findings from a number of our surveys that younger consumers are more comfortable paying for content than their elder peers.”
The size and intergenerational make-up of the free gamer community makes it an attractive audience for advertisers and is why Shaprio suggests that’s why in-game marketing is one of the fastest growing sectors in advertising.
Free gaming may dominate adult game-play, but that doesn’t mean playing is free. In-game purchases are a sizable driver of gaming economics. These can come in the form of virtual objects, extra lives, or loot boxes.
Per PCH, 41% of 45-54 year olds say they make in-game purchases, and one-fifth of gamers over 55 buy lives, objects, or other stuff in the games they play.
“No game is truly free,” notes Shapiro.
When it does come to paid games, it is subscriptions which are growing fast. PlayStation+, for instance, has around 50 million paying subscribers worldwide. Gamers stream billions of hours of gaming related content each year, but the market is dominated by younger players 25 and under.
“The battle royale for gaming subs is amongst the biggest gaming companies in the business, and some of the largest most powerful companies on the planet,” says Shapiro. “This makes for a hard-fought, fragmented marketplace.”
Considering more than 50 billion hours of gaming content will be live-streamed in 2023, it’s safe to say that gamers under 24 stream at higher rates than all these demos.
“Something I found quite surprising is that in gaming livestream, YouTube Live is bigger than Facebook Gaming and Twitch, combined.”
Those in more traditional film and TV should take note, Shapiro says. “The majority of adults with growing expendable income, are spending more and more of their free time and money in games, and advertisers are spending more and more of their money on gaming platforms.
Most adults in the US are gamers. And at least half of those gamers are women. As the PCH data shows, much about the gaming market is unexpected or even counter to conventional thinking.
