Digital games spending hits US$23bn and climbing

24 Oct 2013

Total spending on digital games software and apps exceeded packaged games last year for the first time, achieving US$22.8bn in sales worldwide.

2013 is shaping up to be a landmark year for gaming with the launch of Sony’s PlayStation 4 and Microsoft’s Xbox One as well as the rise of non-console platforms via smartphones and tablet devices.

“However, this market is highly fragmented and its structure varies significantly by region – almost 40pc is attributable to online PC gaming outside of the USA and Europe, with the majority in China and South Korea,” said David Sidebottom, senior market analyst at Futuresource.

“Part of this drive for digital gaming – the global consumer spend on mobile games (on mobile phones/ smartphones and tablets) – reached almost US$6.5 billion in 2012 and is anticipated to almost double by 2017.”

Console business will embrace apps

Sidebottom said that traditional gaming platforms are set to further embrace digitally distributed content, with Xbox One and PlayStation 4 providing a renewed emphasis on online gaming.

“The hotly-anticipated launches will see the total market return to strength, with the overall global physical and digital games software sector on track for nearly 9pc growth, reaching approximately US$50bn in 2014. The total market will continue to steadily grow to reach unprecedented heights through to 2016.”

He said that gaming on mobile devices has emerged as a key area of opportunity, attracting new players and allowing gaming to be enjoyed at more convenient times while consumers are on the move.

“In addition, for many consumers in emerging markets, smartphones will be their first gaming device.”

Futuresource predicts that consumer spend from mobile gaming will reach US$8bn in 2013, a 23pc growth on 2012 and is expected to rise to US$12.8bn by 2017, almost double the 2012 level, with the sector continuing to be driven by the uptake of smartphones and tablets.

“To maximise revenues, the digital gaming sector is seeing a great deal of experimentation with new business models, made possible by digitally distributed content and ‘always connected’ platforms and devices.”

Gaming pad image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years