Video Games Industry Expected to Reach $300 Billion in Revenue by 2030
According to a new report by Midia Research, the global video games industry is projected to generate over $300 billion in annual revenue and have a worldwide audience of 3.8 billion active players by 2030. The report outlines the industry’s growth prospects for the next decade and identifies key drivers of this growth.
The Current State of the Industry
In 2022, the global games industry experienced a 5% decline in revenue after two years of growth fueled by the COVID-19 pandemic. However, Midia Research predicts a return to growth in 2023, albeit at a rate lower than inflation. The report suggests that the industry will see low- to mid-single digit percentage growth for the remainder of the decade.
Authors Karol Severin and Perry Gresham argue that the industry needs a new growth driver to thrive once again. They propose that in-game spending, especially on cosmetic items, could be the saving grace for developers and publishers. As consumers spend more time in digital environments, their desire to define their image and identity in these spaces grows. This presents an opportunity for developers to capitalize on the “fandom hook” and offer uncapped in-game purchases.
2023: Forecasted Numbers and Trends
Midia Research predicts that the industry will experience “modest growth” of 4.4% in 2023, reaching global revenues of $223.1 billion. This growth is expected against the backdrop of a 6.5% global inflation rate projected for the year. The number of active players is also anticipated to increase to 2.88 billion in 2023.
The report explores the impact of subscriptions, forecasting 180.6 million active game subscriptions by the end of 2023, generating $11.7 billion in revenue. In-game purchases, especially cosmetic items, will account for the majority (67.2%) of global games revenue, expected to reach $125.7 billion. Mobile platforms are projected to generate the highest revenue at $105.2 billion, followed by consoles with $45.3 billion and PC with $36.4 billion.
2030: Growth and Evolving Dynamics
Midia Research expects the video games industry to surpass $300 billion in annual revenue by 2030, driven by factors such as the growing player population, increased in-game spending, advertising, and the rise of virtual reality. The number of active game subscriptions is projected to reach 318.5 million by 2030, accounting for 7.5% of global games revenues.
In-game spending is anticipated to increase to $176.9 billion by 2030, with cosmetic purchases leading the way at $105.5 billion. The mobile platform is expected to generate the highest revenue growth rate of 32.4% to reach $139.3 billion. Console and PC platforms are projected to grow by 35.1% and 39.3%, respectively.
The report emphasizes that while subscriptions will play a significant role in driving revenue growth, they will also influence the dynamics of the industry. Traditional premium game publishers and developers may face challenges due to the rise of subscriptions. However, those who embrace in-game spending and advertising business models may benefit.
Growing Player Population and the Rise of Subscriptions
The report highlights that the number of players is the most crucial driver for industry growth between 2023 and 2030. This growth is attributed to a rising global population, increasing internet and smartphone penetration in emerging markets, and the growing number of older players as generations who grew up with video games age.
While subscriptions are expected to generate less than 10% of the industry’s revenue by 2030, they are considered the most important catalyst behind the changing commercial dynamics of the games industry. Subscriptions are predicted to decrease the need for individual game purchases and provide access to a broader library of games. Developers are encouraged to embrace in-game spending, advertising, and product placement to adapt to the evolving landscape.
Recommendations for Developers and Distributors
The report concludes with recommendations for developers and distributors to navigate the evolving industry:
Developers should:
- Consider joining subscriptions sooner rather than later, while negotiating power and funding opportunities are still available.
- Recognize that premium games will become increasingly niche, focusing on high-premium and hard-to-replicate titles.
- Invest in in-game items and experiences to leverage the growth of cosmetic in-game spending.
- Embrace advertising and product placement to improve margins alongside growing subscriptions and declining premium sales.
Distributors should:
- Recognize that subscription services will become the most powerful digital distributors.
- Utilize algorithmic recommendations to enhance the user experience and alleviate decision fatigue for players.
- Work directly with developers to provide services traditionally offered by publishers, such as funding, marketing, testing, and benchmarking.
Final Thoughts: Embracing the Changing Landscape
The report’s authors stress that the industry’s growth slowdown is a natural consequence of maturity and urge companies to adapt rather than resist. They emphasize the need for new growth drivers in a time when consumers prioritize digital entertainment and spending patterns are changing. Games must become more than standalone experiences and embrace broader digital life trends to unlock growth opportunities. As the industry faces challenges, lessons can be learned from the music and video industries, where streaming services reshaped consumer behaviors and revenue models.
By identifying and leveraging key trends, such as the growing player population and the rise of subscriptions, the video games industry can thrive in the next decade.