Newzoo’s upcoming 2015 Global Games Market Report shows that the global games market will jump from $83.6Bn last year to $91.5Bn this year, an increase of 9.4% year-on-year. At this pace, global revenues will reach $107Bn in 2017. The latest estimates also show that China, with an anticipated growth of +23% this year, could move ahead of the US and become the world’s largest games market by revenues in 2015, one year sooner than previously anticipated. China is expected to outgrow the US as the biggest market by the smallest of margins: $22.2Bn versus $22.0Bn. The Global Games Market Report will be launched on June 8th and include projections toward 2018, as well as the top trends that will define success several years from now.
Segmentation Jargon Dissolves and Industry Moves To Segmentation by Screen & Use
Newzoo first introduced its Screen Segmentation Model in early 2012 in response to the evolving market and disappearing boundaries in the traditional market segments. With global revenues continuing to grow toward a more equal divide across the four screens, the Screen Segmentation Model is standing the test of time as the primary model for understanding growth opportunities. In terms of screens, the Computer Screen (PC/Mac) with $33.7Bn will take the biggest chunk of the $91.5Bn pie this year: 37%. On a global scale, the Entertainment Screen (TV/Console, VR) is at 27%. Rapidly growing in its share, the Personal Screen (Phones, Smartwatches) takes 23%, leaving 13% for the Floating Screen (Tablets, Handhelds). The fastest growing segment is the Personal Screen, with a year-on-year growth of +21%. A steep decline in handheld console revenues of -16% will be offset by a +27% increase in tablet revenues, resulting in a healthy +14% overall growth for the Floating Screen.
Virtual Reality and Smartwatches Are Not the “Fifth Screen”
While VR and smartwatch revenues are still too small to report, Newzoo has included them in the Screen Segmentation Model, with VR categorized in the Entertainment Screen segment and smartwatches in the Personal Screen segment. Google, Sony, Samsung and Facebook are among the many tech giants developing and investing in VR technology. The primary reason for their involvement is the realization that in the long-term, interaction will not always require a screen and augmented reality will become part of the daily lives of consumers. Short- to medium-term VR revenues will be limited and largely cannibalize on current console and PC game spending as a share of game enthusiasts invest in the latest technology and richest experience that VR offers. Smartwatches will be a success but not add significant “new” revenues to the $20.6Bn spent on smartphones this year.
APAC and LATAM Lead in Growth as China Rivals the US
Newzoo estimates total revenues in APAC to increase by 15% in 2015. This is well above the global year-on-year growth of 9% and will bring revenues in APAC to $43.1Bn, nearly equaling the revenues of NAM and EMEA combined. LATAM, while still accounting for only 4% of total global games revenues, is the fastest growing region; revenues in LATAM will reach $4.0Bn this year, up 18% from 2014. The US market will grow by 3% this year and total $22.0Bn. In addition to a stabilized console gaming market, growth in the US continues to be driven by smartphone and tablet game revenues, which will see a healthy year-on-year growth of +15%. While growth in mobile revenues in the US has slowed from a 2013-2014 year-on-year growth of +45%, the US mobile gaming market is in no way saturated as several analyst reports suggest.
Newzoo’s Global Games Market Report & Service Methodology
Newzoo performs continuous analysis of the global games markets and individual public and non-public company performance. To generate reliable player and revenue data on a global level as well as for the top 130 countries in the world, we combine an array of data sources, including primary consumer research in twenty five countries, quarterly revenues of public companies, transactional data and third-party research. Forecasting also involves market trending analysis and projections for macro KPIs, such as population growth, online/mobile connectivity and economic growth for all countries in the world. Newzoo’s Global Games Market Report Premium service, which includes quarterly updates, is subscribed to and validated by the majority of large game, media and hardware companies across the globe.