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Bain & Company forecasts that global video gaming revenue will grow from $199 billion in 2022 to $307 billion by 2027.
This represents a compound annual growth rate (CAGR) of 9%.
What’s Driving This Growth? Analysts at Bain & Company credit the heavy engagement of younger gamers, particularly those aged 13 to 17. This demographic spends about 40% more time in video game environments than on other forms of media, including social media, music, and TV.
The gaming sector is also experiencing a surge in deal activity, particularly in gaming software and financial investments. Key transactions in recent years include Microsoft Corp‘s (NASDAQ:MSFT) proposed acquisition of Activision for $69 billion, Take-Two Interactive Software Inc‘s (NASDAQ:TTWO) acquisition of Zynga for $12.7 billion, and Sony Group Corp‘s (NYSE:SONY) acquisition of Bungie for $3.6 billion.
Meanwhile, the total deal value in gaming software reached $95 billion, with financial investments amounting to $49 billion, e-sports at $39 billion, and gaming hardware at $19 billion between 2019 and 2022.
The uptick in M&A activity coincides with the integration of advanced technology and the development of metaverse environments.
Bain & Company (via Insider Gaming) predicts global revenues will increase by over 50% in the next five years.
See Also: US Gaming Market: April Sees 3% Spending Drop, Software Soars Despite Hardware Plunge
Moreover, successful franchise management and fan engagement are becoming crucial, with companies placing these aspects at the core of their strategic decisions.
Innovative monetization strategies are also revolutionizing the financial dynamics of the gaming industry. The competition is intensifying, making scale an essential factor for success.
Furthermore, leading companies are focusing on acquiring and retaining top creative and technical talent, which remains challenging as developers are often lured away by larger tech firms.
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Photo by Maxim Hopman on Unsplash