Rising demand for mobile games is driving the video game market to reach US$80 billion in 2020, up from under US$70 billion last year, according to ABI Research.
Traditional PC and console segments, on the other hand, will see a one- to two-percent annual growth.
Triple-A titles have the potential to dramatically change a developer/publisher’s financials, but gaming’s long tail is equally important to the continued growth of the industry. This is particularly true in the mobile space where a hit title can catapult a mobile game developer into the upper echelons of the market — as was true for developers such as King Digital (Candy Crush Saga) and Supercell (Clash of Clans).
Innovation in the industry is particularly important to fend off the stagnation that can occur from too many copy-cat games, but the market can also move in unpredictable ways as one game can quickly gain favour, so it is equally important to probe for that next big thing.
“While revenue opportunity in the video game market is often predicated on the release of titles from key gaming franchises the gaming market is no longer an isolated ecosystem, with Twitch and eSports providing a thread between gaming, traditional media, and OTT video. Especially if premium content providers like ESPN, which covered Valve’s ‘The International’ a Dota 2 competition in 2014, continue to do so. While, we don’t expect the same level of fan fervour seen in South Korea, OTT video and the social scene are helping to enrich the gaming culture and extend its landscape,” said Michael Inouye, Senior Analyst of ABI Research.
Sam Rosen, Practice Director of ABI Research noted that the introduction of new technologies like augmented and virtual reality is one source of innovation that will afford content creators a new level of immersive storytelling beyond anything consumers have seen or experienced in the past.
“Sony, HTC/Valve, Oculus/Facebook/Samsung have made headlines but others like Survios are working as well to bring innovative solutions to the market. While these new peripherals won’t change the industry overnight it will start to alter the way consumers view content, not just gaming but video as well,” he added.
But future revenue could exceed expectations if new opportunities such as cloud gaming develop as some within the industry hope. Competitive gaming such as multiplayer online battle arenas, other eSports, and OTT video/social media are other examples where more mature markets can find fresh opportunities.