GamingGrill 2019: The gaming world will bring in nearly $200 billion in revenue next year, according to research from IDG Consulting chief Yoshio Osaki
Gaming is on the verge of becoming the biggest entertainment sector in the world.
That was one of the key takeaways from IDG Consulting CEO Yoshio Osaki’s opening presentation on Tuesday at TheWrap’s GamingGrill at Herringbone in Santa Monica. Gaming, according to IDG’s research, already brings in more revenue globally than the music business, movie ticket sales and home entertainment combined. Overall, the gaming industry is on pace to bring in nearly $180 billion in revenue this year — marking a 24% jump in revenue from only two years ago.
By the end of 2020, IDG projects gaming to surpass television as the most lucrative form of entertainment, with annual revenue rising to $195 billion.
It’s probably best to think of major video game releases in the same way we think of blockbuster movies, Osaki said. And in many cases, the biggest video games trump the latest comic book epic coming out of Hollywood.
For example, “Avengers: Infinity War” brought in $640 million globally during its opening weekend last year — or about $85 million less than “Red Dead Redemption 2,” from Rockstar Games, made during its opening weekend in October 2018.
What’s behind gaming’s continued rise? There are a few dynamics at play. First off, as illustrated by “Red Dead Redemption 2,” gaming is truly international. Major releases in the U.S. drive huge sales in Europe and Asia. It applies in the opposite direction as well, as the FIFA soccer franchise from EA Sports indicates; the FIFA game sold nearly 14 million copies last year, according to IDG’s research, with 29% of those players coming from North America. Europe, where the game is especially popular, accounts for 69% of the game’s sales.
New industry entrants and new ways for gamers to play are also spurring the industry’s growth. Osaki pointed to companies like Nike, Facebook and Amazon that are traditionally not gaming-oriented but are now venturing into the industry. Amazon’s involvement in gaming has grown exponentially since buying Twitch in 2014. Twitch is now the go-to streaming service for gamers around the world, and the company recently enjoyed its peak concurrent viewership for a single event, with 1.7 million people streaming a Fortnite event.
Snapchat also launched its own in-app gaming arcade earlier this year — around the same time Apple revealed it would also be getting into gaming, too. The smartphone, just as it’s making it easier for users to watch TV shows and movies on the go, is now becoming an integral part of the gaming industry.
Another gaming trend to watch: esports. More people than ever before are watching people, well, play video games. This may seem like a niche development to those outside gaming, but the numbers are staggering. The Super Bowl pulls in about 100 million viewers at its peak, and it’s still dwarfed by major esports events like the 2019 League of Legends World Championship, which drew 200 million viewers at its peak, according to IDG.
It’s no wonder Twitch, Mixer and YouTube are duking it out — and often poaching popular streamers from their rivals — for gaming viewers.