Video Games Market Value Will Grow to Over $200 Billion by 2023

Video Games Market Value Will Grow to Over $200 Billion by 2023

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The video games industry will exceed $200 billion in value in 2023; growing from an expected $155 billion in 2020, according to Juniper Research. Mobile and cloud gaming will lead this growth, as the market shifts further towards recurring revenue, and purchase revenue declines by 5% over that period.

The new research notes that the popularity of F2P (free-to-play) games like Fortnite and Call of Duty Mobile is intensifying the move to in-game monetisation. The report shows that cloud gaming and other video game subscriptions will grow at an average rate of 9% per year; bringing in over $8 billion of revenue in 2023. However, this will not immediately compensate for declining purchase revenue.

"At current gaming subscription prices, it will take an average of ten months of a subscription payment to cover the retail cost of a single AAA game," remarked research co-author James Moar. "The value of these platforms lies in keeping players within an ecosystem; ensuring that revenue across multiple games is captured by a single platform."
Thanks to gamers signing up to subscription services like EA Access, Google Stadia and Xbox Gamepass and buying fewer standalone games, only mobile games will see a net increase in games installs between 2020 and 2023. However, 99% of mobile game downloads in the next three years will be F2P. We anticipate less than 50% of PC game installs over that period to be paid for, due to a combination of game giveaways and F2P business models.

PC games will be the most lucrative segment for in-game purchases; approaching $32 billion in 2023. While mobile games will have more purchases, higher value game expansion purchases will keep PC in-game revenue growth strong. Smartphone in-app revenue will grow at an average of 8% over the forecast period, as smartphone gaming in emerging markets grows.

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