Laurent Michaud Head of Consumer Electronics & Digital Entertainment Practice
This dynamic is explained primarily by the regular growth of mobile gaming and online gaming segments and a new category, virtual reality (VR).
Distribution of the global video game market per segment, 2016 and 2020
Traditional gaming segments outpaced by competition in games online and on mobile platforms
The traditional video game segments are losing influence quickly...
Games on household consoles accounted for 41% of the total market in 2016 and only 25% in 2020, a sharp drop from 2008, during the launch phase of the previous generation (78%).
Games on handheld consoles will represent 10% of the global market in 2020, compared with 6% in 2016 and Offline gaming on personal computers continues its decline.
... Due to the major success of the online computer games and mobile gaming segments
An average annual growth of 15.5% between 2016 and 2020 for tablet games and 10.2% for mobile games, compared with 9.6% for the whole of the video game market. The share of online computer games is in slight decline, representing about 18% of the total video game market in 2020. The rapid growth in tablets is explained by the enhanced gaming experience due to touch screens larger than those of smartphones.
Otherwise, the share for virtual reality (VR) will grow quickly to reach 18% of the videogame market in 2020.
Competition in terms of "Time Budget"
Although the gaming experiences in the various market segments differ, the players have a limited time budget. They therefore need to choose one platform over another depending on their interests or situation.
Over 70% of the revenue from the video game market in 2016 is from dematerialized distribution and online payment practices
In 2016, 71% of video game market revenues came from dematerialized sales (on smartphones, connected home and handheld consoles) and online pay practices (item selling, subscriptions, and commissions on foreign exchange transactions). In 2020, this share should rise to nearly 89%.
The software market for dematerialized games will display an average annual growth of 12.8% between 2016 and 2020, although the value of the physical game software market should be slightly lower.
All segments are affected: home and handheld consoles are also engaged in an unstoppable race down the road to dematerialization.
Find out more about dematerialisation in video game industry, new strategies and organisation as well as forecasts and shifts in the value chain in our dedicated market report