Newzoo estimates 2.9 billion players and US$175.8 billion in revenue for 2021 global games market

The leading games and Esports data company has updated its estimations for the post-pandemic scene in the industry. Although 2021 will show a minor decline, business will raise between 2019 and 2023, with a 7.2% CAGR that will elevate revenue to US$204.6 billion in 2023.

Mobile gaming will keep on representing an increasing driver to the sector, with US$90.7 billion in revenue for 2021, a 52% of total revenue for this year.
Mobile gaming will keep on representing an increasing driver to the sector, with US$90.7 billion in revenue for 2021, a 52% of total revenue for this year.

The gaming research firm Newzoo has presented its forecast about how the games market will develop internationally during this season. For the first time, the company calculates a decline from the previous year’s indicators. The games market generated US$177.8 billion in 2020, up 23.1% year-on-year, the highest growth since 2012. The reason for this was that 2020 was a unique year, after COVID-19-related lockdown measures spurred enormous interest in gaming across all regions and platforms. For 2021, Newzoo calculates the global games market will produce revenues of US$175.8 billion, a slight y-o-y decline of 1.1%. By the end of the year, there will be 2.9 billion players worldwide.

The lockdowns in the first half of 2020 affected nearly everyone’s way of working, and gaming studios were no exception. Furthermore, the pandemic is continuing to disrupt global supply chains. That’s why this provider of market intelligence sees a 2.8% y-o-y fall for the PC games market to US$35.9 billion in 2021. Of that, US$33.3 billion will be spent on downloaded/boxed games, and US$2.6 billion, on browser games. For consoles, the market will also reduce 8.9% to US$49.2 billion, as the after-effects of COVID-19 will shape that segment this year.

STRONG IMPACT ON SOFTWARE AND HARDWARE BUSINESS

About games releases, the lineup of games for next-generation consoles has been impacted by the pandemic and will continue to be disrupted for the rest of the year, with many launchings already pushed to the second half of this year or even 2022. The negative impact also affects hardware, as global shortages of chips mean a supply lack for many consumer electronics, including next-generation consoles and components required for high-end PC gaming.

While Newzoo expects a lot of the increased engagement will stick, there will also be a short-term return to the levels of engagement and spending of pre-2020, as people will enjoy of more freedom and spend their disposable income on non-gaming social activities.

Regarding mobile gaming, it will generate US$90.7 billion in 2021, expanding 4.4% y-o-y. This is more than half of the global games market, as the segment is less affected by the effects of COVID-19 than PC and console gaming. The relatively lower complexity of development means that the segment is not as impacted by game delays resulting from changing working conditions.

The report also says there will be an impact on user acquisition and marketing performance measurements that successful mobile publishers rely on to perfect their strategy, but this will be overshadowed on a global scale by other underlying growth drivers. This is related to Apple’s removal of the Identifier for Advertisers (IDFA), which will disrupt how many mobile game companies measure the success of their marketing campaigns. The brunt of the impact of this change will fall on the part of the mobile games market monetized through advertisement. However, there is confidence that mobile developers will adjust to the new regulation and resume a path to growth fairly quickly.

POSITIVE OUTLOOK FOR 2023

When taking a look on the future, Newzoo envisions the games market will continue to advance in the following years, exceeding US$200 billion at the end of 2023. By then, it will elevate by 7.2% CAGR between 2019 and 2023 to US$204.6 billion.

In that sense, mobile gaming will be the fastest-growing segment over the coming years. However, console gaming will carry that title for 2022, when the release schedule will be overloaded due to delays and more people can purchase the new consoles.