The gaming industry has enjoyed an impressive and lucrative start to this decade. From 2020 onwards, we’ve seen a huge increase in the number of people enjoying all forms of gaming and a similar trend in the amount being spent on this hobby.
Over the last eight years, more than a billion new people have begun gaming, taking the total number of global gamers up to around 3.32 billion. However, the five and six per cent annual increases that we were witnessing are no more as the rate of uptake has slowed to 3.11% in 2024.
That doesn’t mean there are fewer gamers, it’s just that the speed at which the pool of players is expanding is slower than it was just a handful of years ago.
Similar trends exist in the measures of spend among gamers, though this figure is not likely to slow as much as macroeconomic forces will drive up spending across the board, while existing players can also increase their gaming expenditure.
Global spending on gaming will reach $282.3 billion this year and rise at a compound annual growth rate (CAGR) of 8.76% between now and 2027.
For anyone with an interest in the industry, either as a player, a worker or an investor, understanding the health of the sector is important to be able to better predict the future.
So, let’s examine how the gaming industry can perform in the short and medium terms.
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iGaming Growing
The iGaming industry, which offers digital versions of betting such as online poker, has also enjoyed significant growth over the last couple of decades, although the drivers responsible for this have shifted over time.
The first factor was the launch of online gaming in the first place as this meant that people didn’t need to travel to other cities or some of the smallest countries in the world to enjoy a flutter. Following this, the poker boom in the early 2000s helped to popularise the card game online, while the explosion in smartphone adoption made it even easier to play remotely.
Today, leading online poker brands have positioned themselves as brands for adventure seekers and have begun to create tutorials to help these players develop their skills. For example, PokerStars has a guide that describes behaviours to watch for amongst opponents, such as timing tells, unusual open sizes, and players that limp every hand. Such information is likely to help novices develop their playing abilities and support the further growth of iGaming.
Shifting Spending Habits
The way that gamers are paying for content has changed dramatically over the last 20 years. At the turn of the millennium, players would buy a new title up front and enjoy it for as long as they liked. They would immediately have access to the entire content, although they’d have to unlock some of it by progressing through the different levels.
Today, however, once you begin playing, you’ll be presented with lots of new opportunities to keep spending.
Some games are completely free to play, allowing you to download them and begin playing without having to put your hand in your pocket. However, you will, instead, be offered in-game items, character customisations, and other upgrades to enhance the experience.
This is likely to continue, lowering development costs (since downloadable content is cheaper to create than entirely new games) and increasing the lifespan of games. It has also been driving up players’ average spend, helping to grow the size of the industry faster than the acquisition of new gamers – a trend that will likely continue for the medium term.
Streaming and Online Content
Interest in esports has begun to plateau in the last few years, but online gaming content and video game streamers continue to enjoy high demand. This is because creators who produce and appear in this type of content are engaging and entertaining and also help to create a community of like-minded people.
Current projections forecast that this market will grow at a CAGR Of 8.41% between 2024 and 2027, mirroring the growth of video game spending.
Streaming, in addition to being a source of revenue itself, is a way for video game publishers to promote their latest releases and updates directly to people who are interested in these titles. So, while demand for this content continues to rise, so too will spending on video gaming.
