The Video Game Market Set to Double by 2033, Says Analysis

Key Takeaways

• The video game market is projected to more than double from 2023 to 2033, according to a new analysis.
• The firm Brainy Insights says it could reach $490 billion by 2033, up from under $250 billion last year.
• Major game companies have lately made sizable layoffs and closed studios.

The video game market will more than double from 2023 to 2033 as technological advancement drives growth, according to a new analysis.

The global video game market was valued at $227.6 billion last year and is projected to grow to $490.81 billion by 2033, according to the research firm Brainy Insights.

The firm pointed to an explosion in mobile gaming, which made up 52% of the market in 2022, as a driver of growth. The mobile segment is the most affordable entry point for consumers, and the advancement of smartphone technology has allowed for a wider variety of games to be run on mobile platforms.

Costs for Developers

The biggest impediment for the video game market is the high costs related to developing both new tech and new games, particularly as companies in the industry are making major cuts.

On Thursday, Microsoft (MSFT) reportedly said it would cut 650 employees from its Xbox division, the company’s third round of unit cuts since closing its $69 billion acquisition of Activision Blizzard last October. Microsoft laid off 1,900 Xbox employees in January and closed multiple Bethesda studios in May.

Take-Two Interactive Software (TTWO), the developer of the “Grand Theft Auto” franchise, closed two of its subsidies in May, according to Bloomberg. Earlier this month, Sony (SONY) pulled first-person shooter “Concord” from Playstation 5 consoles and PCs just two weeks after the game underperformed.

The video game industry supports more than 1 million jobs in the U.S. and contributes about $5 billion to the country’s economy, according to Brainy Insights.

Overall, the video game market is poised for significant growth in the coming years. With advancements in technology and the increasing popularity of mobile gaming, the industry is expected to double its value by 2033.

Explosion in Mobile Gaming

One of the key drivers of growth in the video game market is the explosion in mobile gaming. In 2022, mobile gaming accounted for 52% of the market, making it the largest segment. The affordability and accessibility of mobile games have made them a popular choice among consumers.

Furthermore, the advancement of smartphone technology has allowed for more sophisticated games to be played on mobile platforms. This has expanded the range of gaming experiences available to mobile gamers, attracting a larger audience and driving revenue growth.

Challenges for Developers

Despite the promising growth prospects, the video game industry faces significant challenges, particularly in terms of development costs. Developing new technology and creating innovative games require substantial investments.

Recent layoffs and studio closures by major game companies highlight the financial pressures faced by developers. Microsoft’s decision to cut employees from its Xbox division and Take-Two Interactive Software’s closure of two subsidiaries are examples of the cost-cutting measures being taken in the industry.

These challenges can hinder the industry’s growth potential and limit the number of new games and technologies that can be developed. However, the overall outlook for the video game market remains positive, with continued technological advancements and increasing consumer demand.

Impact on the Economy

The video game industry plays a significant role in the economy, supporting over 1 million jobs in the U.S. alone. It contributes approximately $5 billion to the country’s economy, highlighting its importance as a major sector.

As the market continues to grow and evolve, it is expected to create more job opportunities and contribute even more to the economy. The expansion of the video game market will have a ripple effect, benefiting various sectors such as technology, entertainment, and retail.

In conclusion, the video game market is set to double by 2033, driven by technological advancements and the increasing popularity of mobile gaming. While developers face challenges in terms of high costs and industry restructuring, the overall outlook for the market is positive. The growth of the video game industry will not only impact the gaming sector but also have a significant economic impact.

Read the original article on Investopedia.