Games like Fortnite will remain central to gaming industry value, according to Juniper Research.
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The video gaming industry is predicted to face declining purchase revenue, but that’s not going to stop its market value from growing by 30% in the next three years. What’s more, the driving force behind this meteoric rise won’t be due to the highly anticipated Xbox Series X or PlayStation 5; it’s down to something a lot less celebrated.
This month, a new report from Juniper Research revealed that the video games industry’s value will exceed $200 billion in 2023–nearly a third larger than its expected $155 billion worth in 2020. Mobile and cloud gaming will lead this growth, with those much-maligned microtransactions being at the heart of turnover.
As part of Video Games: Industry Trends, Monetisation Strategies & Market Size 2020-2025, Juniper theorized that free-to-play games like Fortnite and Call of Duty Mobile will “intensify the move to in-game monetization”–undoubtedly a horrible-sounding prospect for millions of gamers. The study also predicted that 99% of mobile game downloads in the next three years will be F2P.
Meanwhile, cloud gaming and other video game subscriptions, such as Xbox Game Pass (and, apparently, Google Stadia), will grow at an average rate of 9% per year between now and 2023, eventually accounting for $8 billion of industry revenue. Research co-author James Moar was quick to highlight that this change in tastes “won’t immediately compensate for declining purchase revenue,” which his team predicts will fall by 5% in the coming three years.
Xbox Game Pass is among the other big winners in the coming three years.
“At current gaming subscription prices, it will take an average of ten months of a subscription payment to cover the retail cost of a single AAA game,” he explained. “The value of these platforms lies in keeping players within an ecosystem; ensuring that revenue across multiple games is captured by a single platform.”
However, PC games will remain “the most lucrative segment for in-game purchases” due to the higher value of game expansion purchases; Juniper estimates these will account for $32 billion in 2023.
Given that the report was researched shortly before the confirmation of the all-digital Xbox Series S and PlayStation 5 Digital Edition, there’s a good chance that purchase revenue may remain a little more resolute, given that many gamers will be forced to buy new titles through Microsoft and Sony stores. However, given the slew of coverage highlighting how buyers will likely get much better value by avoiding discless consoles, the true accuracy of Juniper’s research remains to be seen.