In case you hadn’t heard, video games are pretty popular. So popular in fact, that the growth of the industry as a whole — i.e. mobile, PC, and console gaming — is expected to hit a huge global revenue mark in just a few years.
According to a recently adjusted forecast from analysis firm DFC Intelligence, game software revenue is expected to hit $100 billion in 2018. And that’s just for software; hardware is a completely different entity.
While DFC provides many reasons for the exponential growth — 2014 is expected to hit $64 billion in global game software revenue — they claim that mobile will play a big part. Just last year, mobile software represented about $10 billion of the global game revenue, but in 2018 that number is expected to balloon up to $29 billion.
The mobile space is clearly on the rise, as tablet and smartphone technology continues to get faster and more powerful. Just this year, Apple announced Metro, a new iOS technology that will give greater power to mobile developers without changing the smartphone’s hardware.
Still, DFC acknowledges that the mobile games market is in its relative infancy, and companies will need to find new ways to leverage the ever-growing install base. Mobile gaming is growing, there’s no question about that, but whether or not the types of experiences that have been dominating the market — the Flappy Birds and Candy Crushes of the world — will be able to sustain it is unclear.
“The challenge with mobile games is that even as it grows it remains very fragmented and overcrowded. Companies need to be very cautious about their platform strategy and understand which markets and platforms are suitable for their particular product.”
What is pretty clear is that console gaming is back in a huge way thanks to the PS4 and Xbox One. DFC expects both platforms to have continued growth in the market, and suggests they will have a big role to play in reaching $100B in 2018.
However, it’s interesting to note that DFC raised their forecasts for the PS4 and Wii U, but did not do so for the Xbox One. And that’s even after Microsoft announced a new Xbox One bundle that ships without Kinect and retails for a lower $399 price tag. Apparently, DFC believes Microsoft’s questionable business decisions have hurt their public image.
“The Xbox One should carve out a solid share among dedicated action gamers, but due to some questionable business decisions Microsoft’s broader entertainment strategy is in disarray despite the release of the new $399 Kinect-less SKU.”
Ultimately, the major takeaway from DFC Intelligence’s raised forecast is that the software market is growing faster than anyone could have predicted. New consoles are here, new and exciting games are following closely behind, and gamers are reaping the benefits. Now we have to wait four years and see how right (or wrong) DFC is.
Do you think game software is going to boom as big as DFC Intelligence is predicting? Do you see yourself continuing to spend as much on games in four years?
Follow Anthony on Twitter @ANTaormina