It’s been tough for most industries over the last few years. In 2020, the whole world had to adapt to a new way of life. The auto industry saw massive lows as many were forced to stay home, which was the same for the restaurant and leisure sectors. Tourism was hit hard as travel was grounded. The education sector had to find new ways of working and healthcare; we all know how strained the NHS has become. Yet, now that we live in a post-pandemic world, things have not returned to ‘normal’, and we are still feeling the effects of Covid-19. The cost of living has seen a rapid rise. Fuel prices are through the roof due to Russia’s invasion of Ukraine, and interest rates continue to rise. However, despite all of this, one industry has continued to grow: the online gaming industry. Let’s look back over the past few years and see how the industry has grown to find out if other industries can learn something from this sector.
In 2019, the game industry increased by 3% to $120.1 billion. The figures include revenue from mobile, PC, and console games, as well as augmented reality, esports, and virtual reality. The revenue for mobile games in 2019, with the most significant increase coming within the gambling sector, with games such as those found at online slots UK and live dealer blackjack, was $64.4 billion, $29.6 billion for PC, and $15.4 billion for consoles. The remaining $6.5 billion was allocated to game-related movies and $6.3 billion to XR games based on technology such as virtual reality or augmented reality. Therefore, it’s clear that the gaming industry was on the rise before the pandemic. However, what were the predictions for 2020 without obviously knowing there was a pandemic on the horizon?
During the forecast period 2020-2025, the global gaming industry was expected to grow at a CAGR of 12%. The driving factors behind this increase included:
But what happened?
The video game business has benefited the most from the outbreak. Because of the physical and social constraints imposed by lockdowns, more people than ever before turned to computers, game consoles, and mobile phones to pass the time. According to industry research, Covid measures contributed to video game sales reaching a new high of $56.9 billion in 2020, a 27% increase over the previous year.
Even as the industry acquired new followers, worries about what happens next — in terms of game production and release and the long-term viability of gaming’s increased popularity — loomed large. With the pandemic’s inherent obstacles, several developers were compelled to make complex judgments about satisfying their audience while keeping to timelines set before the virus hit; other aspects of video game production would be impossible to complete without an in-person connection, as well as pricey technology and studio space. These issues threatened to derail well-laid plans and erode some of the industry’s otherwise impressive advances. So, what now?
The expansion of the video game business over the last 18 months has mirrored human behaviour throughout the pandemic in many ways. We resorted to gaming to interact with friends, pass the time, and spend money that was no longer reserved for nights out and vacations when everyone was trapped inside. As a result, the sector expanded, and we’ve seen the effects this year in record gaming investments and consumer spending. Nevertheless, new assessments of the industry’s financial state indicate a more nuanced picture is emerging. While Covid-19 was a watershed moment for the industry, developers are now confronted with the realisation that the sector may never again see the same tremendous financial growth as it did in 2020.
The difficulty level of video games continues to rise. The graphics are becoming more realistic and fanciful by the day, the gameplay is becoming smoother, and the storylines are becoming so effective at tugging at the heartstrings that it sometimes seems like there isn’t a single franchise that doesn’t have a film or TV series adaptation in the works. The video gaming industry is worth more than the music and film industries combined. Therefore, why are people now frightened that the good gaming times are about to end? Despite the industry’s challenges and disappointments, many observers believe that it will continue to thrive. Sales have slowed down, there is no denying that. However, if we look at the bigger picture, the industry is still heading in the right direction.
