The increasing development of technologically advanced hardware for video games coupled with the rising user base is boosting the video game industry growth.
The global video game market was valued at US$ 163.70 Bn in 2020 is expected to reach US$ 334.82 Bn by 2027, with a growing CAGR of 10.8% during the forecast period (2020-2027).
The changing demographics and emergence of new gaming platforms are shifting the gaming businesses from being product-centric to becoming experience-oriented platforms. The consumer’s interest in an online video game is one of the key areas for market players to focus on. The video game market is witnessing a significant rise in the demand from the people above 54 years of age, with 65% of the American adults playing video games. In addition to this, social interactions over video games have become one of the key driving factors for the market growth. The video game is seen as an ecosystem of platforms by the players to meet, communicate, shop, listen and watch live-streamed content.
The technology advancements and integration of technologies such as virtual reality (VR) coupled with the emergence of 5G connectivity is further anticipated to support the video game market growth. Extended Reality (XR) technology is highly associated with gaming industry. With the evolving experience-oriented video gaming the use of XR along with the possibility of natural user interfaces (NUI) to further enhance the human computer communication is anticipated to accelerate the video game market growth during the forecast period. The video game companies and the technology developers are coming together to offer excellent solutions to its customers. For instance, in October 2020, Riot Games brought together a team of 40 content creators, specialists and artists to make mixed reality as component of the broadcast. The company applied XR technology during Worlds 2020 broadcast.
In terms of geography, North America is witnessing a high growth rate in the video game industry primarily driven by the U.S. The North America video game industry is highly lucrative with the presence of large industry players along with the presence of technology giants that ensures excellent market growth. In March 2020, American consumers spent approximately US$ 5.6 Bn on video games including hardware, assorted content and accessories which was 18% higher compared to March 2020. This growth was all time high for the North America region in the month of March. The growth is largely attributed to the COVID-19 pandemic.
Whereas in 2019, according to the Entertainment Software Association, 75% of the Americans owned at least one video game player in their home with 75% of the American children playing video games. Furthermore, 93% of the American household owns a smartphone of which almost half of the owners play video games. Mental stimulation and stress relief are the key factors encouraging people across North America to play the video games. To address these factors the industry players have introduced stress relieving video games which is accelerating the video game market size.