Video Games Market Value To Grow To Over $200 Billion By 2023, Despite Declining Purchase Revenue

A new Juniper Research report found that the value of the video games industry will exceed $200 billion by 2023; growing from an expected $155 billion in 2020. Mobile and cloud gaming will drive this growth as the market shifts further towards recurring revenue, with revenue from purchases declining by 5 percent over that period.

Games Subscriptions a Long-term Promise

The new research, Video Games: Industry Trends, Monetisation Strategies & Market Size 2020-2025, notes that the popularity of F2P (free-to-play) games such as Fortnite and Call of Duty Mobile is stepping up the move to monetisation in game. The report shows that cloud gaming and other video game subscriptions will grow at an average annual rate of 9 percent; bringing in revenue of over $8 billion in 2023.However, this will not immediately compensate for declining purchase revenue.

F2P Games Changing the Landscape

Thanks to gamers signing up to subscription services like EA Access, Google Stadia and Xbox Gamepass and buying fewer standalone games, only mobile games will see a net increase in games installs between 2020 and 2023. However, 99% of mobile game downloads in the next three years will be F2P. We anticipate less than 50% of PC game installs over that period to be paid for, due to a combination of game giveaways and F2P business models.

The most lucrative segment for in-game purchases will be the PC games; approaching $32 billion by 2023. While more purchases will be made from mobile games, higher value game expansion purchases will keep revenue growth from PC in game strong. Over the forecast period, smartphone in-app revenue will grow by an average of 8 per cent as smartphone gaming in emerging markets grows.

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