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Gartner Says Worldwide Video Game Market to Total $93 Billion in 2013

Upcoming Video Game Consoles Releases to Help Push That Segment to $55 Billion in 2015

The worldwide video game marketplace, which includes video game console hardware and software, online, mobile and PC games, will reach $93 billion in 2013, up from $79 billion in 2012, according to Gartner, Inc. Driven by strong mobile gaming and video game console and software sales, the market is forecast to reach $111 billion by 2015.

Mobile games are the fastest-growing segment of the market, with revenue set to nearly double between 2013 and 2015 from $13.2 billion to $22 billion (see Table 1).

"As mobile devices (smartphones and tablets) continue to grow, the mobile game category will show the biggest growth due to the entertainment value provided by games compared with other app categories," said Brian Blau, research director at Gartner. "This growth is fueled by healthy premium mobile device sales globally and a desire by consumers to play games on these multifunction devices that are capable of displaying increasingly sophisticated game content."

2013 is an important year for the game industry as Sony, Microsoft and recently Nintendo are releasing their next-generation video game consoles to a market that may be moving in another direction due to the popularity of mobile devices.

"Sony and Microsoft are releasing their game consoles in November and pent-up demand for these new consoles has caused a temporary reduction in game console hardware sales during 2013, but growth will resume during 2014 and sales of existing console hardware are forecast to grow from $15.9 billion today to $22.7 billion in 2015," said Mr. Blau. "In stark contrast, dedicated game handheld devices and traditional PC games will play a smaller role in the game market and cease to be important game platforms.

Table 1. Video Game Market Revenue, Worldwide, 2012-2015 (Millions of Dollars)

Segment

2012

2013

2014

2015

Video Game Console

37,400

44,288

49,375

55,049

Handheld Video Games

17,756

18,064

15,079

12,399

Mobile Games

9,280

13,208

17,146

22,009

PC Games

14,437

17,722

20,015

21,601

Total Video Game Market

78,872

93,282

101,615

111,057

Source: Gartner (October 2013)

Some of the significant growth in mobile games also comes from revenue in the emerging markets. Today, mobile app revenue comes from the U.S. and Europe, where smartphone and tablet penetration is greatest. However, growth in device sales in emerging markets is accelerating. The potential to sell-in back catalog games exists in emerging markets, because many game players in these regions don't have the means to purchase games on multiple platforms, and games titles on mobile devices are considerably less expensive than those on game consoles."

Online and PC games remain popular but this segment is limited in overall size. Gartner expects that traditional PCs will not be replaced by newer PCs in households, but by tablets. This will lead to a progressive reduction in the installed base for PC games as game players adopt other device types as their primary computing platforms. PC and online games will remain popular, but compared with game consoles and mobile games, it is PC games that will take a backseat as game players make a choice of convenience and popularity.

"Moving forward, game developers will need to constantly deliver compelling games as the growth of content and platform choices drives game players in divergent directions," said Mr. Blau. "The propensity for a game player to choose any single game is based on their desire to play, and it's the game developer and designer that best understand the cross-section of creativity and technology. As video games, their platforms and gameplay ideas continue to expand, so this will in turn drive demand for play."

Additional information is available in the report "Forecast: Video Game Ecosystem, Worldwide, 4Q13." The full report can be found on Gartner's website at http://www.gartner.com/resId=2606315.

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