The gaming industry is a huge and thriving business. The global gaming market has been valued at $173.70 billion and is expected to reach $314.40 billion by the end of 2026, registering a CAGR of 9.64% between 2021 and 2026.
When we turn our eyes to the Polish market, we can feel a reason to be proud. According to the data from The Game Industry of Poland 2021 report, which I invite you to read, there are 470 companies present on the games market in Poland, employing over 12 thousand employees. It is also worth mentioning that in 2021 (compared to the previous year) the number of employees in the game dev sector increased by 24% and the number of game production companies by almost 10%.
Let’s look inside this beautiful and exciting industry and think about what 2022 may bring us.
At the beginning of 2021, it was estimated that the global game market would generate $175.8 billion, which was supposed to mean a slight decrease from the previous year (by 1.1%).
Impact of the pandemic on the industry
The prognosis was influenced by the opinion that 2020 was a special year in many respects. At that time, there was a reorganization of company operations (including remote working, which freed up more time among employees), and restrictions such as social distancing and commercial closures were introduced. The launch of PlayStation 5 and Xbox Series X|S also had an additional impact on the popularity of the gaming industry. Increased interest in video games appeared in all regions of the world and on all platforms.
A minimally negative impact on industry growth has also been linked to global chip shortages, which mean a lack of supply for many electronic devices, including components for next-generation consoles and components required to support high-end PC gaming.
2022 is one big launch year
Large companies and corporations do not just handle game production. You can find small and micro companies that produce independent and exciting titles worldwide. In 2021, as in previous years, the scene of smaller publishers was bursting at the seams, while the one set for larger players mainly shone empty. Many items expected by consumers will premiere only in early 2022. The first three months will see the release of games such as:
- Elden Ring,
- Rainbow Six Extraction,
- Pokémon Legends: Arceus,
- Horizon: Forbidden West,
- Destiny 2: The Witch Queen,
- Saints Row
- and Dying Light 2 Stay Human.
And in the following months, we’ll play:
- Gran Turismo 7,
- Kirby and the Forgotten City,
- Marvel Midnight Suns,
- and Tiny Tina’s Wonderlands.
Later it’s even better because such items as The Legend of Zelda: Breath of the Wild 2, Bayonetta 3, Splatoon 3, God of War: Ragnarok, Redfall, Gotham Knights, Ghostwire Tokyo, Mario + Rabbids: Sparks of Hope, Suicide Squad: Kill the Justice League, not to mention what developers have in store for us games like Indies. All this will have a positive impact on the gaming industry and increase spending in this sector.
Who are the gamers
In 2021, the number of gamers worldwide was 3.24 billion. Asia had nearly 1.48 billion (making it the largest video game market globally), while Europe boasted 715 million. These are awe-inspiring numbers.
When we look at the Deloitte report, we can see that these numbers directly correlate with the fact that when asked about their recent behavior, as many as 84% of consumers say they spend more time entertaining themselves online at home than outside of it. According to Nielsen, as many as 71% of Millennials watch gaming-related video content online, such as gaming videos on YouTube and Twitch platforms.
Silhouette of a gamer
It may seem surprising to some, but as the data shows, the average gamer is not a teenager at all. They are 34 years old, own a house/apartment, and have children.
Women on average play video games at the age of 36, and the most active gamers are those between the ages of 18 and 35, who make up 13% of the entire gaming community. At the same time, the average male gamer is 34 years old, and the most active age group is boys under 18, making up 17% of all gamers.
Other interesting facts state that:
- 72% of players are 18 or older,
- 41% of American gamers are female, compared to 47% in Europe,
- 70% of parents say that video games have a positive impact on their child’s life,
- 67% of parents play video games with their children at least once a week,
- 56% of gamers play multiplayer games most often,
- 35% of multiplayer players prefer shooting games,
- 42% of gamers play with friends, 19% with family, 17% with parents, and 16% with a spouse.
The term “electronic sports” or “e-sports” dates back to the late 1990s. One of the earliest reliable sources to use this term is a 1999 press release about the formation of the Online Gamers Association (OGA), in which then Eurogamer evangelist Mat Bettington compared e-sports to traditional competitions.
Sports have been of great interest to (at least parts of) society for decades. We sit in the stands, drive or fly thousands of kilometers to follow the teams or people we support, or sit comfortably in front of the TV to watch all sorts of struggles.
When on the horizon appeared the first struggles of the teams that did not run on the field, but on the virtual battlefields, many people were skeptical about it. Years later, when the market has already established itself, the perception of this type of struggle has completely changed.
E-sport is currently breaking popularity records. Regional or international video game events where professional and amateur players compete attract crowds in the millions.
E-sports market and statistics
On Twitch alone (a live streaming platform that primarily offers video game content), consumers spent 6.34 billion hours in the first quarter of 2021. This was more than double the time spent by users on YouTube Gaming Live and Facebook Gaming combined.
According to Insider Intelligence, e-sports was expected to be watched by 26.6 million viewers per month in 2021. Additionally, the market is expected to be worth $1.61 billion in 2024 and the overall market is expected to register a CAGR of 20% between 2021 and 2026.
The most popular game (according to the cumulative tournament prize pool – $7.398 million) in e-sports is currently Counter-Strike: Global Offensive, the most-streamed Call of Duty: Modern Warfare (5.303, million hours), and the highest-paid player (data as of March 2021), with a prize pool of almost $7 million, Johan Sundstein nicknamed N0tail.
E-sport is also entering different niches week by week. Even the first Excel “FMWC Open” competition is emerging as a tool for education and training.
Trends in e-sports
With such a large market and audience comes enormous responsibility and virtually unlimited growth opportunities.
Increased celebrity investment and involvement in Esports
I don’t know if you have enjoyed watching the series with Dwayne Johnson called “Players“. The action of the series takes place in sunny Miami. The main character is a retired American soccer player who wants to try his hand as a manager of other athletes. The last season of this series has a strong accent related to e-sports. Producers presented a huge potential of virtual games and tried to show them as equal to other, traditional sports.
The same happens in the real world – for example, the two-week Dota 2 tournament, which is the biggest e-sports tournament in the world, boasts the highest prize money of over 40 million dollars, where the primary winner receives almost 45% of this amount.
Seeing the vast potential of the e-sports industry is being entered by: Roc Nation Sports, owned by Jay-Z, Eonxi, whose investors include NBA star Spencer Dinwiddie, and even Netflix. Apart from that, the likes of actor Ashton Kutcher, NFL star Rodger Saffold, NBA stars such as Magic Johnson, Rick Fox, Michale Jordan, and footballer David Beckham, boxer Mike Tyson, singer Drake, and actor Will Smith are investing in e-sports.
This trend can be expected to continue steadily in the coming years. Gaming will further cement its position in mainstream media, and as past reports have shown, sponsorship revenue from e-sports could be the largest source of revenue in 2022.
Along with celebrities investing in e-sports come big brands that also see huge potential in the industry. For many years, companies associated with high-tech have been investing millions of dollars in sponsorships. Logos such as Twitch, Google, Hyper X, Tencent, Intel, Razer, or ASUS are no longer surprising.
The potential of sporting events is also seen by companies completely unrelated to the industry (except maybe Redbull, which has been sponsoring and promoting itself during all kinds of sporting events for as long as I can remember). Recently, Vans and Gucci set up a store at the Metaverse games, and Louis Vuitton created a trophy case for the “League of Legends Esports Championship”. Online events have attracted interest from companies/brands such as Coca-Cola, Pepsi, Honda, Mercedes, Marvel, and even the U.S. Air Force. This is a trend that will continue to grow in 2022.
Hacking with online streaming
The cyber security industry is growing stronger every year, mainly by the number of attacks that affect the world daily. As early as last year, in a technology trends article, I wrote about how Cybersecurity Ventures’ predictions indicate that companies will fall victim to a ransomware attack every 11 seconds. These are not optimistic numbers. In order to guard against outside attacks, many companies are investing millions of dollars in security and offering financial gratification to those hackers who point out weak security in their systems.
Live hacking with larger audiences is slowly joining the e-sports industry. This trend will grow stronger in 2022.
E-sports in academia
E-sports in higher education, especially in the US, was gaining popularity even before the pandemic. In Poland, you can also find specialization in this field, and more and more schools and universities are opening dedicated majors.
Nearly 100 colleges and universities in the United States are members of the National Association of Collegiate Esports (NACE), the official governing body for collegiate sports. More than 250 more have club programs. Nearly 200 U.S. colleges and universities offer about $15 million in esports scholarships annually. Some even have dedicated MBA programs and partnerships with professional e-sports teams.
This trend will grow in popularity in other corners of the world, and we should expect to see more interest in these types of educational offerings.
Profits in e-sports
At the top of the highest-paid teams in e-sports is Team Liquid, founded in the Netherlands in 2000. They play mainly in Dota 2 tournaments, and the total amount of prizes they have won during their existence is well over 37 million dollars. Team OG and Evil Geniuses also made it to the podium with $35 million and $25 million.
In 2021, the most profitable team in the first half of the year was Susquehanna Soniqs. They earned around $1.42 million, almost entirely thanks to the success of their players in the PUBG Global Invitational.
NFT and Cryptocurrencies
The world of cryptocurrencies and NFT stirs up extreme emotions. Some love them, others hate them, and the rest avoid them by a wide margin. Despite this, they continue to grow in popularity and touch more and more areas of our lives. Many companies involved in the production of games already have them in their sights. More and more games are starting to use blockchain technology in their products.
What are cryptocurrencies
Cryptocurrency is nothing but a virtual/digital currency that is secured with cryptographic solutions, making it almost impossible to counterfeit. A characteristic of cryptocurrencies is that they are not issued (usually) by any central authority, making them theoretically immune to government interference or manipulation. So much for theory, because as Elon Musk’s Twiter posts show you can shake up this market pretty well based on just a few posts.
Cryptocurrencies run on a technology called blockchain. It’s a decentralized technology spread across multiple computers that manage and record all transactions.
By November 2021, the total value of all existing cryptocurrencies was over $2.4 trillion, and Bitcoin alone accounted for about 42% of the total market value.
What is NFT
NFT stands for Non-Fungible Token. It is a digital object, or rather a data unit stored in a digital ledger (blockchain technology is used for this purpose, as with crypto).
The term “non-fungible” basically means that NFT is non-exchangeable and unique and cannot be exchanged for anything similar. It is the opposite of a digital currency where, for example, one Bitcoin can be exchanged for any other.
NFT is used to transfer property in digital form. It can be understood as a kind of certificate that we would use in real life to show that we own, for example, some physical object—something like a notarial deed. NFT can be bought with digital currencies e.g. cryptocurrencies.
NFT in the gaming industry today
Trading or renting virtual items in games was hugely popular decades ago. In virtual spaces, people exchanged magic items, unique weapons, potions and even sold their in-game accounts in which they had gained previous experience and high scores for real money. Owning in-game items has long since become a form of investment.
Then the old concept of “pay-to-play” in traditional online games is transformed into “play to earn” and even “win to earn”! You can earn money by unlocking levels and earning special badges by playing.
Many of today’s NFT games reward winning with a small amount of cryptocurrency, which can be used to purchase more in-game items. Alternatively, we can even cash them out and convert them into real money. In addition to this, with NFT these products can be accessed between completely different games on the same network due to the decentralized nature of the platforms.
When looking at online search trend analysis tools, NFT grew dramatically in popularity in February 2021 after the related sales of Digital Art and NBA Top Shot took off. Top Shot is an NFT marketplace that allows customers to buy, sell, and collect special collectible “packages” featuring important moments from NBA history. A similar mechanism occurs when people purchase physical cards in the real world: they buy a pack of cards, open it, and see what they get.
Dapper Labs, which was “distributing” content for the NBA at the time, reported NFT sales and resales of $780 million.
In March 2021, a digital collage of the NFT by artist Beeple was sold at Christie’s for $69.3 million.
NFT sales reached $1.2 billion in the first quarter, $1.3 billion in the second quarter and as much as $10.7 billion in the third quarter of 2021.
Not surprisingly, the gaming industry is adapting to the surrounding reality and seeing more and more potential in this solution.
NFT Gaming in 2022
The most profitable project for gamers with cryptocurrencies in the background was Axie Infinity. The token’s value skyrocketed from 12 cents to $165 in no time. Players who joined the fun at the very beginning earned more than 100 times their initial investment by simply playing a Pokemon-style game.
Instead, the Alien Worlds game has earned the status of a giant NFT game, boasting over 3.6 million registered users and about 11 million games per day.
In 2022, we can continue to expect an increase in interest in cryptocurrency and NFT games. More new entries have already been announced, among which are: Illuvium, Sipher, Star Atlas, Guild of Guardians, and many others. Some have already started trading NFT and digital currencies from the game world, which we can purchase on exchanges.
Services offering video on demand are already so popular that it is estimated that by the end of 2027, the market will be worth $159.62 billion. Meanwhile, a similar gaming trend has been brewing for several years. On-demand gaming has gained momentum, both on consoles and PCs. The rapid growth in “edge computing,” the rise of 5G networks, newer and newer generations of WIFI, and better accessibility to the Internet means that latency (response time) is dropping to a minimum. This creates a huge opportunity for console and PC games and those on mobile devices.
The problems I mentioned earlier with chip availability and purchasing graphics cards or high-quality devices make it increasingly difficult for consumers to play the latest games. Thanks to cloud solutions, we will not be limited by our hardware but only by the quality of our Internet connection.
Global on-demand gaming market
The global on-demand gaming market size is estimated to be $121.2 million in 2020, growing at a CAGR of39.3% compared to 2017-2019, and is projected to grow further up to $1,861.3 million in 2028, assuming a CAGR of 40.9% between 2021 and 2028.
There is no denying that cloud gaming technology looks strongly promising and is becoming the irreversible future of the gaming industry.
We don’t have reliable data for 2021 yet, but when we look at the 2020 report, we can see that mobile, console, and PC games had the highest popularity in the gaming industry. They occupy 46%, 31%, and 23%, respectively. Mobile gaming is predicted to increase further to 49% in 2022, but these predictions depend on the report we manage to read, so it’s hard to be clear on the actual figure.
Looking at the trend of growing smartphone adoption, which is expected to be as high as 80% in 2025, it’s fair to say that mobile gaming will continue to be a big piece of the pie to eat.
With high-end mobile devices, cloud technologies, and 5G infrastructure, users can increasingly enjoy games anywhere. When playing mobile team games, their quality depends on the internet connection. With the lower latency offered by the technologies mentioned above, the gaming experience is getting better and better.
Considering all this, game developers are focusing their efforts on creating mobile gaming environments.
Virtual reality in the gaming industry
Virtual reality uses computer technology to simulate real environments in the digital world. It is used not only in games but also in education, medicine, real estate, film, HR, or many other sectors. Instead of sitting in front of a monitor, special glasses are worn that immerse us in the virtual world and can offer us interactions with the three-dimensional world.
Virtual reality market
Reports relating to augmented (AR), virtual (VR), and mixed reality (MR) say that the market reached $30.7 billion in 2021 and will grow to nearly $300 billion by 2024.
The number of virtual reality devices reached 13.48 million units in 2020 and is expected to reach 112.62 million units by 2026. In the same year, the VR market was valued at $15.81 billion and is expected to grow at an annual rate of 18% until 2028.
Additionally, it is worth mentioning that the VR market owes as much as 43% of its value to the gaming sector. The increased demand for VR games also leads to more job opportunities in the gaming sector – from producers to graphic designers to programmers to business and sales roles. However, as the same technology becomes more popular in other sectors, participation in the gaming industry will gradually decline.
What 2022 will bring to the gaming and VR industry
Expected Reality (XR)
Expected Reality (XR) technology is coming to the market with great strides from over the horizon. It’s a combination of VR and AR that offers a mix of virtual and augmented reality. A kind of deeper immersion is being created using the reality around us. The XR segment is estimated to reach $209 billion by 2022, which is eight times more than in 2019. It can be used in various spheres. Examples of games using this technology include Star Wars: Squadrons, Trover Saves the Universe, Half-Life: Alyx, and No Man’s Sky.
Traditional games e.g. strategy games, work on the central nervous system and stimulate our brain. VR games can take advantage of physical elements and make players more active. Users immerse themselves in a pleasant virtual world and the time they spend there translates into improved health and fitness. For example, riding a bike or rowing no longer has to occur in static places like the gym or our home. Even without access to water, we can go anywhere in the world, swim in the beautiful scenery, or participate in rowing competitions by wearing special glasses. The global online/virtual fitness market size was already valued at 6046 million in 2019. It is projected to reach $59331 million by 2027.
Relaxation and well-being
Statistics on the incidence of mental illnesses, especially depression, have increased, especially during the pandemic. One in 4 people in the world may already be suffering from it. In Poland, too, there has been a steady increase in disease cases for several years. When we look at the report “NFZ about health. Depression” in 2020, the problem concerned 3.8 million people. Depression can be triggered by various factors, such as prolonged stress or pressure. The impact of the COVID-19 pandemic on mental health is undeniable, and experts warned of the impending threat as early as March 2020.
That’s why relaxation games and those taking care of our mental condition are other strong trends. Meditation, yoga, wellness, socialization games are some of them.
The use of virtual reality to treat mental health issues was first introduced at MIT in the mid-1960s. The technique was mainly used to treat post-traumatic stress disorder (PTSD) and arachnophobia patients. Read more here
There are many research programs and startups on the market that have been treating, for example, depression or Alzheimer’s with video games for a long time, and there are more and more of them every year.
The rise of interest in mobile gaming (i.e., games for phones and tablets) took place in 2008 when Apple created its AppStore. This opened up an ocean of possibilities for game companies and gamers themselves. Previously, games could only be downloaded from online stores, which were relatively expensive. Over time, other operating systems such as Android have implemented the same model, making smartphone entertainment extremely simple and accessible. According to the predictions, we will see an increase in mobile gamers in the year 2022.
Mobile gaming market
Mobile gaming has quickly taken over virtually the entire world. The first game for cell phones was “Snake”, which was released in 1997 for Nokia phones. After its great success, other manufacturers of phones began to duplicate this scheme and put more and more different games on their devices.
Twenty-three years later – in 2020 – the value of the mobile games market was already estimated at 104 billion dollars, and according to the latest forecasts, by 2022, this value will exceed 121 billion.
When we look at the data from “Statista”, we can see that currently, mobile games generate about 57% of the total revenue from video games worldwide.
According to data from October 2021, the largest iPhone game publisher in the world was Tencent Mobile Games, with $14.58 million in revenue from the apps it produced. At the same time, Android phones were ruled by King, which generated $124.15 million in revenue coming from Google Play, followed by Moon Active with $109.44 million.
Interestingly, a study conducted in September 2020 indicated that the countries with the highest interest in mobile gaming are Thailand and the Philippines, where mobile games are played by 78% and 77% of the total population, respectively.
New technologies will change the face of mobile gaming
Earlier, when discussing cloud gaming, I mentioned how technologies like 5G would impact the gaming market, especially mobile gaming. The main benefits in this regard include:
- lower latency, or the time it takes for data sets (packets) to travel between two points,
- increased bandwidth, allowing for a “richer” experience in multiplayer games,
- increased streaming capabilities for real-time games using the cloud.
Today, major mobile network operators have deployed 5G to at least 200 million people worldwide, and about four in ten (43%) of active smartphones will be 5G-ready by 2023.
Add to that data from another report. FB Trends shows that a quarter (25%) of current U.S. gamers prefer online multiplayer to single-player. New gamers indicated this mode 33% of the time.
With older technologies having high signal latency, playing real-time multiplayer games is challenging. New technologies such as 5G and next-generation wifi will change the face of these types of games.
With high speeds, we can also expect to see an increase in cross-platform gaming. Nowadays, many titles allow online play on consoles and PCs. With new technologies and cloud gaming, it will be possible to join the ranks of cell phones.
I remember the first multiplayer games very well, which I spent time on while still in college. Thanks to them I met many interesting people from different parts of the world. Interestingly, at a later age, while playing the official game of the U.S. Army, which was shown to me by a friend of mine who was enamored with it, I met one of my later clients in a chat room.
The dimension of social games
Despite the anti-social stereotype often attributed to game enthusiasts, it turns out that this way of spending time and making contacts is quite popular.
- as many as 65% of players like to spend time with other, strange people, playing their favorite games,
- 40% say that thanks to video games, they have met people they would never have met,
- 51% of people play video games after work or school/college, compared to 30% who play while waiting to meet other people,
- The AlphaWise report shows that 30% of gamers surveyed said games are primarily a means for them to socialize, and a quarter of gamers under the age of 35 said games are a better way to socialize than social media alone,
- 38% of gamers in the U.S. said they prefer chatting/conversing with others while playing games rather than just playing,
- according to the Unity report, more than half of those who play online games spend an average of seven hours a week playing them, and 55% of gamers said they use social games to stay in touch with friends during the pandemic.
Companies, recognizing the potential, are taking a bolder and more interesting approach to social gaming.
Interestingly, the virtual concert of rapper Travis Scott, which took place in the game Fortnite, gathered almost 28 million viewers. Social gaming is undoubtedly one of the gaming trends to follow in 2022.
The global social gaming market was estimated to be worth $78.92 billion in 2020 and is expected to reach $98.8 billion by 2024.
Live video game streaming
It’s nice to watch someone with passion and commitment play a favorite game, or tackle a It’s nice to watch someone with passion and commitment play a favorite game, or tackle a challenge for the first time that they’ve never faced before. I enjoyed watching my older cousin play through the most challenging levels of the first version of Tomb Raider or explore the meanders of Lara Croft’s mansion. The growing popularity of this leisure activity has contributed to a growing audience, and sitting next to a gamer has changed to watching the same content over the Internet with a huge audience.
Definition of technology
Live video streaming is when the content we record is transmitted over the Internet in real-time. This usually takes the form of broadcasts where the creator sends the content to multiple users simultaneously.
Game streaming market
Currently, the biggest popular site in the streaming industry is Twitch, which provides as much as 91% of all streaming content. Games are admittedly not the most popular category on Twitch. It is currently ruled by “Just Chatting” (with 234 million hours of content), but the other nine of the ten most popular categories are already about games. In December 2021, Grand Theft Auto V (with almost 111 million hours of content), Valorant (89 million h) League of Legends (84 million) was in the lead.
On the other hand, live streaming of games on YouTube became less popular and saw a drop in hours from 1.92 billion to 1.37 billion (which is still an impressive result).
A year ago, the number of viewers watching live games was 1.2 billion, which was not only an increase of more than 25% but also contributed to massive revenues for the industry. The wave of blockchain caused by the pandemic has increased the appeal and demand for live streaming like never before.
Earnings of streamers
In 2021, gamer Tyler Blevins, nicknamed Ninja, was the most popular streamer in the world (on Twitch), with over 16.94 million followers. His popularity and influence made him the top highest-earning gamer globally.
Players can earn impressive revenues from their channel subscriptions, sponsorships, sales or promotions.
According to official data, the five highest-earning Twitch stars in the world had combined earnings of nearly eight million dollars in 2020.
However, on October 6, 2021, Twitch suffered a massive breach and leak of its data. Among other things, documents showing how much the top streamers earned on Twitch (between August 2019 and October 2021) were found online.
While the list is topped by Critical Role voice actors, who have reportedly earned $9.6 million over the past two years, second place is already occupied by Canadian Twitch player xQc with an impressive $8.4 million. Next on the list are American streamer Summit1g with $5.8 million, esports player Tfue with $5.2 million, FaZe Clan’s Nickmercs with $5 million, and gamer Ludwig with $3.2 million.
2022 – more platforms
This kind of spending and the growing number of e-sports events I mentioned earlier led Netflix to hire gaming industry veteran Mike Verdu to join them as VP of Game Development in 2021.
With this, Netflix started its first big move related to expansion into the world of video games and their streaming. We can expect some exciting turns of events in the coming years.
When I started writing this article, I wanted to focus on more expected trends such as the rise of the board and card games (including computer games), Roguelike games, the rise of family entertainment, or even HTML5. However, the amount of data I’ve processed on the topics above is so vast that I didn’t want to dwell further.
There is no doubt that the growing popularity of games will provide excellent stability to the industry for many years to come. The only open question is what we will be able to experience when we come to grips with the new (yet hypothetical) iteration of the Internet, the Metaverse.
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