The gaming economy looks to have another strong year in the books, and companies like Newzoo have noticed this. In a new report, contrary to what they said in April, Newzoo believes that the gaming market will generate a $196.8 billion yearly increase of 2.1%. Something to note is that their report this time around says, “To that end, we also believe the games market is – to some extent– ‘recession proof.’”
The report also notes that free-to-play monetization and subscription services mean gaming is “more democratized than ever before.” Once again, the primary driver of these numbers is mobile gaming, garnering $103.5 billion this year (53% of the overall market) and “representing a growth of +5.1%.”
An interesting thing about the report is that Newzoo believes that AAA gaming “is no longer as hit-driven and seasonal as it once was.” Continuing with this idea, they noted that players continued to engage with live service titles (like Fortnite, League of Legends, and Apex Legends) as well while saying that this year’s restricted growth is “temporary.”
There’s something to note about the console market: they’re in high demand and short supply. The semiconductor shortage reported earlier in the year by outlets such as Kotaku is the key player on that front, and Newzoo predicts the chip shortage will continue to cause issues until at least next year.
Consoles’ decline this year (albeit a slight one) also dictates that console-first regions will face the most growth challenges this year but “will ease after this year”. Despite this, the gaming market will continue to grow and is projected to hit $225.7 billion by 2025, a +4.7% CAGR between 2020~25, while noting that “experimental spending will become an even bigger part of consumers’ lives again in the come years…”
One of the bigger things Newzoo discussed inside the report came at the very end, where the researchers mention the idea of gaming being “recession-proof.” They note that there are a couple of essential factors against it, being that “monetization is robust,” with lots of choices between full-price content, free-to-play games, subscriptions, or a mix of the three.
Secondly, and this adds to the first, is that the above statement means that “there are pathways to play no matter how much disposable income a player has.” Pretty self-explanatory, but cloud gaming services like GeForce NOW add to “democratizing things further.”
One negative against the idea is inflation, “limiting consumers’ disposable income (as prices are higher for essentials, commodities, and leisure,” which, if you live in the United States, is a very real problem. Newzoo, once again, says that would be short-term, as “The past has shown us that gaming has remained resilient during such times (even when the only option was full-priced boxed games). Once the economic situation returns to normal, price-sensitive players often pick up where they left off in terms of spending.”
Despite various market challenges, Newzoo believes that gaming's continued growth “is a testament to the market’s power, innovation, and resilience. While 2022 will be a challenging year for console and PC in terms of growth, we are far more optimistic for the future.” We’ll continue to update as the story develops.
The post Newzoo: Games Market Will Grow by 2.1% in 2022, Reaching $196.8 Billion and Showing Strong Resiliency by Ule Lopez appeared first on Wccftech.
