Video Game Software Market Definition
The video game software market consists of sales of video game software and related services by entities (organizations, sole traders and partnerships) that produce video game software, including businesses that are involved in design, documentation, installation and support services, production, and distribution of video games. Companies in this industry undertake operations such as the design, development, publication, distribution, and monetization of video game software on various platforms including PC, browser, smart phone, tablet, and console.
A video game is a computerized game that can be played on devices such as personal computers (PCs), mobile phones or gaming consoles. Video games are generally categorized into computer games (PC games), browser games, mobile games and console games.
Video Game Software Market Size
The global video game software market reached a value of nearly $167,220.2 million in 2019, having increased at a compound annual growth rate (CAGR) of 13.0% since 2015. The market is expected to decline from $167,220.2 million in 2019 to $166,439.7 million in 2020 at a rate of -0.5%. The decline is mainly due to lockdown and social distancing norms imposed by various countries and economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is then expected to recover and grow at a CAGR of 11.0% from 2021 ad reach $223,277.1 million in 2023. The market is expected to reach $274,458.3 million in 2025, and $452,628.1 million in 2030.
Growth in the historic period resulted from in-game purchases and freemiums, live streamers and gaming influencers, rise in smart phone users and rise in disposable income. Factor that negatively affected growth in the historic period was stringent regulations. Going forward, increasing use of internet, shifting preference towards digital games, cross-platform publishing and play, technologically advanced platforms, and increasing gamers involvement will drive the growth. Factors that could hinder the growth of the video game software market in the future include growing privacy concerns, regulatory restrictions to curb pc games addiction, global recession, age-based restrictions and COVID-19 pandemic.
Video Game Software Market
The key drivers of the video games software market include:
Cross-Platform Publishing And Play
Cross-platform publishing and play games are expected to drive the market for video games in the forecast period. Companies in the PC games industry are launching cross-platform publishing and play games to make gaming more flexible for users. Cross-platform publishing gives players the ability to play the same video games on different platforms through progress retention. Similarly, cross-platform play is a characteristic of a video game that enables gamers to use different gaming platforms such as console, mobile and PC to play with each other simultaneously. In many cases, these cross-platform games are restricted within the respective publisher’s platforms. For instance, some games in the RPGs series Monster Hunter are cross-platform games between Nintendo’s platforms such as the 3DS, Wii U and the Switch. The increase in cross-platform gaming can be attributed to the development of scripting languages, software libraries and game engines allowing PC games companies to efficiently use platform-specific details of the users. For instance, Microsoft is expanding Xbox Live’s cross-platforms from 400 million to over 2 billion to include iOS, Android and Switch in 2019. Flexibility offered by the cross-platform publishing and play games will drive the market for video game software in the forecast period.
Video Game Software Market Restraints
The key restraints on the video game software market include:
Growing Privacy Concerns
Rising privacy concerns are expected to limit the growth of the video game software market in the forecast period. The video games market is facing increased privacy concerns due to the importance of the use of players’ locations in massively multiplayer online role-playing games?(MMORPGs) and the development of virtual and augmented reality-based games. In addition, the connectivity between video gaming platforms such as consoles and social networking platforms such as Facebook, Twitter and Skype are increasing. Some games such as Pokémon Go have been under great scrutiny about their access to users’ contacts, full access to players’ Gmail accounts when signing up on iPhones, and uncertainty about the extent to which the game’s publishers Niantic is collecting, using, and sharing players’ data. Similarly, in 2018, video games developed and published by Activision Blizzard such as World of Warcraft and Diablo III were diagnosed with a vulnerability to their Domain Name System (DNS) which allowed any website to run the arbitrary code and could potentially be used to hack into the PCs of the players. This unreliability in the data collection, transmission and security of video games players is expected to lead to formulating stringent regulations and standards pertaining to the collection of private date, a development which will hinder the growth of the video game software market.
Video Game Software Market Trends
Major trends influencing the video game software market include:
Increasing Demand for Streaming Games
Video game software developers are increasingly providing streaming video game services to take advantage of emerging 5G and cloud computing technologies. Several countries have already adopted 5G, which has greatly improved internet speed. This will increase the number of downloads and streaming of games. Streaming allows for continuously playing the latest version of the game, without having to update the game at all. Cloud computing and fast internet speeds will enable users to play games from any computer, and will also increase accessibility. For example, In August 2019, Hatch Premium launched its unlimited mobile cloud gaming on the 5G networks of Sprint, a telecommunications company based in the United States. It allows games to be streamed via the cloud to mobile devices. The games include Monument Valley, Beach Buggy Racing, and Angry Birds Go.
Adoption of Virtual Reality (VR) And Augmented Reality (AR) Technologies
Video game software developers are increasingly adopting VR and AR technologies to enhance players’ gaming experiences. VR includes a computer-generated simulated environment, usually with auditory and visual feedback. AR provides an interactive experience by integrating computer-generated information with real-life objects. According to the VRDC VR/AR Innovation report published in 2017, 78% of AR, VR and mixed reality developers were focusing on developing games integrated with these technologies. For instance, Half-Life: Alyx?is a brand-new game in the?Half-Life?universe designed exclusively for PC virtual reality systems. Major companies developing games with AR and VR technologies include Niantic, Owlchemy Labs, Unity Technologies and Ubisoft.
Opportunities and Recommendations In The Video Game Software Market
Opportunities - The top opportunities in the video game software market segmented by type will arise in the PC games market segment, which will gain $26,899.7 million of global annual sales by 2023. The top opportunities in the video game software market segmented by genre will arise in the action games market segment, which will gain $17,963.1 million of global annual sales by 2023. The video game software market size will gain the most in the USA at $16,914.3 million.
Recommendations- To take advantage of the opportunities, the business research company recommends the video game software companies to focus on streaming games, focus on augmented reality (AR) and virtual reality (VR), focus on security, expand in emerging markets, provide competitively priced offerings in low-income countries to reach new users, offer in-game purchases, provide subscription-based pricing, leverage social media, collaborate with live streamers and gaming influencers, app store optimization, in-game advertising, participate in events and remote/online events due to covid-19.
Video Game Software Market Segmentation
The video game software market is segmented by type, type of transaction and type of genre.
By Type-
The video game software can be segmented by type into
- a. PC Games
- b. Browser Games
- c. Smartphone/Tablet
- d. Console Games
The PC games market was the largest segment of the video game software market segmented by type, accounting for 43.9% of the total in 2019. Going forward, the smart phone/ tablet games segment is expected to be the fastest growing segment in the video game software market segmented by type, at a CAGR of 8.2% during 2019-2023.
By Type Of Transaction-
PC games is further segmented into by type of transaction-
The PC games can be segmented by type of transaction into
- a. Physical
- b. Online/ Microtransaction
- c. Digital
The online microtransaction market was the largest segment of the PC games market segmented by type, accounting for 83.5% of the total in 2019. Going forward, the online microtransaction segment is expected to be the fastest growing segment in the PC games market segmented by type, at a CAGR of 8.18% during 2019-2023.
By Type of Genre-
The video game software can be segmented by type of genre into
- a. Action
- b. Shooter
- c. Adventure
- d. Role-playing
- e. Strategy
- f. Fighting
- g. Sports
- h. Racing
- i. Others
The action games market was the largest segment of the video game software market segmented by genre, accounting for 27.3% of the total in 2019. Going forward, the racing games segment is expected to be the fastest growing segment in the video game software market segmented by type, at a CAGR of 11.7% during 2019-2023.
By Geography-
The video game software is segmented into
- o Asia Pacific
- China
- Australia
- Hong Kong
- India
- Indonesia
- Japan
- Malaysia
- New Zealand
- Philippines
- Singapore
- South Korea
- Thailand
- Vietnam
- o North America
- o South America
- Argentina
- Brazil
- Chile
- Colombia
- Peru
- Venezuela
- o Western Europe
- Austria
- Belgium
- Denmark
- Finland
- France
- Germany
- Ireland
- Italy
- Netherlands
- Norway
- Portugal
- Spain
- Sweden
- Switzerland
- UK
- o Eastern Europe
- Czech Republic
- Poland
- Romania
- Russia
- o Middle East
- Saudi Arabia
- Israel
- Turkey
- UAE
- o Africa
- Turkey
- Egypt
- Nigeria
- South Africa
- Ethiopia
- Kenya
- Mozambique
Asia Pacific was the largest region in the global video game software market, accounting for 50.4% of the total in 2019. It was followed by North America, Western Europe, and then the other regions. Going forward, the fastest-growing regions in the video game software market will be North America, and the Middle East, where growth will be at CAGRs of 10.9% and 9.2% respectively. These will be followed by South America, and Asia Pacific, where the markets are expected to grow at CAGRs of 7.7% and 6.8% respectively during 2019-2023.
Video Game Software Competitive Landscape
Major Competitors are:
- • Tencent Holdings Ltd.
- • Nintendo Co., Ltd.
- • Sony Corporation
- • NetEase, Inc.
- • Microsoft Corporation
Other Competitors Include:
- • Activision Blizzard, Inc
- • Electronic Arts Inc
- • Ubisoft Entertainment SA
- • Square Enix Holdings Co., Ltd.
- • Konami Holdings Corporation
- • Nova Gaming Ventures Private Limited
- • TA Games Studio
- • Virtuos Holdings Pte. Ltd.
- • Elex Technology Co., Ltd.
- • Zeus Interactive Co., Ltd.
- • Beijing Babeltime Technology Co., Ltd.
- • Happy Elements Technology (Beijing) Limited
- • Shanghai Everstar Online Entertainment Co. Ltd.
- • Playsoft Game
- • Supercell
- • Gameloft
- • Ronimo Game
- • Travian Game
- • Asobo Studio
- • Team17 Digital Limited
- • Engine Software
- • Frontier Developments plc
- • Keywords Studio
- • Sumo Digital
- • Frontier Developments
- • Codemasters
- • Ubisoft
- • XSEED Game
- • Square Enix
- • Bandai Namco
- • Capcom
- • Valve Corporation
- • Bethesda Softworks
- • Sega
- • Koei Tecmo Game
- • Daedalic Entertainment
- • Headup Game
- • HeroCraft
- • Brainy Studio
- • BUKA Entertainment
- • Factory Online
- • Ambidexter
- • Mail.Ru Group
- • Alawar Entertainment
- • Nival
- • Action Forms
- • Meridian 93
- • Elephant Game
- • Novosoft
- • Nival Interactive
- • GSC Game World
- • Gaijin Entertainment
- • Alderac Entertainment Group
- • Radical Entertainment Inc.
- • Hinterland Studio
- • Klei Entertainment Inc.
- • Elex Technology
- • OKAM Studio
- • VOX Game Studio
- • Hoplon
- • Aquiris Game Studio
- • Dedalord
- • Efecto Studios
- • Etermax
- • Bamtang Game
- • Squad
- • Iguanabee
- • AOne Game
- • Pomelo Game
- • Behold Studios
- • Space Rhino Game
- • Quytech
- • Wixel Studios
- • Nezal Entertainment
- • Tahadi Games
- • Game Power 7
- • Gameguise
- • Games XP
- • Cloudgam.es
- • Quirkat
- • Tamatem
- • Babil Games
- • Celestial Games
- • Kuluya
- • Thoopid
- • Maliyo Games
- • Leti Games
- • Kola Studios
- • I-Imagine Interactive
- • Gamsole
- • RuneStorm
