The global video games software market will exceed $100 billion this year, driven by phenomenal growth of both mobile and PC and new console launches from all three of the major players, according to newly unveiled research by Futuresource Consulting.
Futuresource's “Gaming Insights: Global Video Games Market” report, released in time for the annual gaming extravaganza E3, which starts today in Los Angeles, pegged consumer spending on mobile gaming at about $45 billion as smartphone and tablet install bases are increasingly reaching their peak in developed countries, while developing nations' growth is exploding.
“While sales of physical console games are declining, the speed of digital growth, which includes forecasts of $30 billion in PC sales and another $12 billion in online console spend, is more than offsetting this trend,” said Futuresource analyst and report co-author Tristan Veale.
The report identifies signs that the mobile gaming market in developed nations is plateauing as the installed base of devices approaches saturation point. The United States will account for just 14 percent of global revenues by 2021, with growth increasingly driven by the Asia-Pacific market where mobile gaming spend represented over half of the global total in 2016 — a figure that is expected to rise over the forecast period.
Futuresource expects mobile, as a proportion of the total video games software market, will fall towards the end of the forecast period in part because of faster growth from console and online gaming.
The recently launched Nintendo Switch has outperformed initial expectations and hardware demand has significantly outstripped supply. More than 20 million physical Switch games are expected to be sold this year with revenues bolstered further by Nintendo’s plans to launch an online subscription service.
Microsoft is to launch the significantly more powerful Xbox One X in Q4 2017 in a move which may well change the console market forever, as it potentially indicates an end to the traditional six-to-eight-year console cycle. The move has expected to cause an uplift of Xbox One games, by 13 percent to 70 million in 2017, shipped worldwide.
“The PC market has mastered upgrading hardware yet retaining backwards compatibility and Microsoft seems intent on the same with this console launch,” commented Veale. “Newer, higher-powered consoles may continue to be launched in the future, with games taking advantage of performance improvements and allowing users to create a significant library of games.”
Sony PlayStation 4 software sales are expected to be more muted in comparison to Nintendo and Microsoft, despite the introduction of the PS4 Pro and Slim models late last year. As such, Futuresource expects just a 3 percent increase of PS4 game sales in 2017.
“Sony PS4 Pro is a more typical mid-cycle console upgrade,” says Veale. “Sony has taken few risks with the exception of omitting to include a UHD Blu-ray player but has a dominant position having outsold Xbox by two to one in this generation.”
Sony is also placing greater emphasis on virtual reality than Microsoft, evidenced by its recent announcement of 1 million PlayStation VR headsets sales.
“Global VR games demand is gradually expanding as head-mounted display usage increases and game publishers boost their title rosters. It should be noted though that VR games demand remains at a low level in comparison to the scale of the overall games market,” adds Veale.