Gaming industry

Alexander Fishkov, Ph.D. student Computer Science

With many technological advancements in information technology and the move toward a digital world, the entertainment industry is no exception. The computer gaming industry is rapidly growing with no expectation to slow down. Developments in areas such as smartphones, virtual reality and augmented reality drive forward the hardware and software sides of gaming.

The above graph shows the forecast by PwC and Statista of the global video games market growth in the upcoming years. According to this projection, the global market value will reach $138.4 billion in 2021, an increase of more than 2.5 times over its value in 2012. Some of the leading international companies in the video game market include Sony Computer Entertainment and Nintendo from Japan, Tencent Holdings Limited from China and Electronic Arts and Activision Blizzard from the United States. Some general IT companies, including  Microsoft, Goggle and Apple also have a share in the video game market.
Our next graph explores data from Newzoo on major public companies in the gaming industry in terms of their revenue. The selection consists of the top 10 publicly traded companies ranked by their revenue estimates for the year 2018. The Chinese giant Tencent, which also owns QQ instant messenger and the WeChat service, is the clear leader, generating nearly $20 billion in revenue in 2018. All of the companies on the list experienced growth from 2017, but the largest was Sony, which grew just short of $4 billion (or 40 percent) over the previous year.
There are two major sources of revenue in the gaming industry: software and hardware. Hardware includes displays, consoles and computer parts, controllers and other accessories, while the software is the actual games, in-game purchases and subscriptions. The chart above presents a breakdown of the United States gaming industry revenue by these segments (the data comes from NPD Group and AFJV). The total revenue reached $43.4 billion in 2018, which was a $13 billion (over 40 percent) increase compared to 2016. The majority of this revenue comes from software (over 82 percent), while the remaining $7.5 billion came from hardware.
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About Alexander Fishkov

Alexander Fishkov, Ph.D. student Computer Science

Alexander is a Ph.D. student in Computer Science. He currently holds B.S. and M.S. degrees in Applied Math. He has experience working for industry major companies performing research in the fields of machine learning, data mining and natural language processing. In his free time, Alexander enjoys hiking, Nordic skiing and traveling.

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