Games to break $100 billion by 2018

3 min read

all the money

We all know gaming is a big industry – it generates a ton of money and has become more lucrative than movies or music. But it’s going to get even bigger with some companies coming out on top.

According to a newly revised forecast from DFC Intelligence, not only will gaming software hit $100 billion, it will do so sooner than expected – in 2018. I want to pause here and point out this is just software. With the new console launches we have talked a lot about hardware sales or the value of gaming in general – this is focused purely on the games, the actual software that we consume.

We are now tracking hardware and software spending separately. Core gamer spending on high-end PCs, dedicated game devices and accessories is starting to soar. When you add in mobile devices the impact of the gaming consumer on total hardware spending is huge.The influence this spending will have will have a bearing on all major players in the consumer electronics space.

The DFC estimates that software revenue in 2014 should be around $64 billion globally, but that core gamer dedication combined with a continually growing mobile market is leading to faster growth:

The new console systems are doing well but much of the predicted growth is on mobile platforms and in BRIC countries. What we are seeing is a game market in 2018 that is likely to be split fairly evenly between console, PC and mobile platforms.

Mobile is expected to make up about 30% of total game software revenue, despite the fact that the mobile games market is very fragmented and overcrowded. DFC analysts warn companies that they should be cautious with their platform strategy to ensure their software is released in the most suitable market. Looking at consoles, the DFC raised its forecast for the PS4 and Wii U but lowered it for the Xbox One:

The Xbox One should carve out a solid share among dedicated action gamers, but due to some questionable business decisions Microsoft’s broader entertainment strategy is in disarray despite the release of the new $399 Kinect-less SKU.

It’s incredible to look at these numbers and it will be interesting to see how the DFC shapes up with their predictions. Just imagine how powerful the gaming market is when you combine the software and hardware sides. The reality is that people are spending exorbitant amounts of money on gaming hardware, as well as all the software to go with it. Part of it is the price of games at launch, but we are also spending more during sales and other promotional events. Then there are still Collector’s Editions. The real challenge will be for the Xbox brand to recover after such a shaky start – despite having a solid product, their PR and marketing really hurt them. I also wonder if the increasing size of the market doesn’t hurt some smaller and independent game developers. Sure, indie game developers can make money if their product is successful, but with such a glut of games on the market, curatorship becomes nearly impossible and numerous games fall through the cracks.

Combining hardware (PCs, consoles, mobiles, tablets or other gaming devices), infrastructure (internet) and software, what percentage of your income would you say you put towards gaming? Has your spending increased at the rate these predictions say, or are more people just joining the gaming herd?

Last Updated: June 25, 2014

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