Is gaming really on track to become a trillion dollar industry?
In short – yes. The video game industry has experienced exponential growth over the past decade. It now generates over $175 billion in annual revenue, surpassing movies and music combined. Driven by mobile gaming, competitive esports, and major investments from tech giants, gaming is on pace to reach $200 billion in just a few years. And according to projections, the industry could very well cross the trillion dollar threshold within the decade, cementing its status as the largest entertainment business in the world.
Let‘s look at the numbers to understand just how massive gaming has become:
- 2015: $91.5 billion in global gaming revenue
- 2021: $175.8 billion, up 92% in 5 years
- 2025 (projected): over $200 billion in revenue
For perspective, here is how gaming revenue compares to other entertainment sectors today:
| Industry | Global Revenue |
|---|---|
| Video Games | $175.8 billion |
| Movies | $21.3 billion |
| Music | $25 billion |
As you can see, gaming revenue dwarfs what Hollywood and the music business generate annually – combined. In fact, games now make up over 70% of total entertainment industry revenue worldwide.
Just on mobile alone, gaming is utterly dominating as a form of entertainment. Sensor Tower reports that in 2021, mobile gaming apps amassed over $116 billion in player spending globally. That figure includes more than $22 billion from just three games – Honor of Kings, PUBG Mobile, and Genshin Impact. With 5G and device upgrades expanding the mobile gaming market further, some estimate revenue could quadruple to over $400 billion by 2030.
Esports viewership now surpasses major sports
Perhaps no trend captures gaming‘s explosive growth as much as the rise of esports. Professional video game competitions like League of Legends Worlds and Dota 2‘s The International now draw viewership matching traditional major sporting events. Riot Games reported that over 21 million peak concurrent viewers tuned in for League of Legends Worlds 2021 Finals. And that‘s just one title – hundreds of popular esports games exist today.
According to research firm Newzoo, the total esports audience will grow to 474 million this year. They estimate that competitive gaming content attracts a similar number of viewers as the NFL currently does. Esports tournaments offer million dollar prize pools, while pro players can earn up to $5 million annually from competition winnings, salaries, sponsorships and streaming income. Clearly, esports has hit the big leagues.
Big Tech bets billions on gaming‘s future
Given the tremendous scale and reach of today‘s gaming market, technology giants are making massive investments to tap into its potential. Microsoft‘s proposed $68.7 billion purchase of Activision Blizzard is the largest ever acquisition in the video game space. And with Activision‘s stable of iconic franchises like Call of Duty and World of Craft, Microsoft aims to accelerate growth across console, PC and mobile and dominate the emerging metaverse.
Tencent, the world‘s largest gaming company, continues to expand its enviable stable of developers and publishers, owning major studios like Riot Games, Supercell and a 40% stake in Epic Games. And in Europe, Sony is acquiring Destiny developer Bungie for $3.6 billion as it aims to launch 10 live service games by 2026. Based on these high-priced deals, it‘s clear that Big Tech firms see gaming‘s revenue growth as virtually limitless in the years ahead.
Achieving $1 trillion in revenue this decade is within reach
Based on the gaming industry‘s stellar growth trajectory and massive long-term investments from leading companies, surpassing $1 trillion in annual revenue before 2030 seems highly achievable. For perspective, that is over 5X the size of today‘s market.
Research firm DFC Intelligence projects that gaming revenue could reach $274 billion by 2030. And Goldman Sachs sees the industry hitting $300 billion within a few years, calling gaming "the most investable part of media." If global gaming revenue simply maintains a 10% compound annual growth rate this decade, it will cross $1 trillion by the late 2020s.
Of course, achieving that figure will require continued innovation and expansion into emerging platforms like cloud, AR/VR. It will also depend on how gaming companies address concerns around addiction, toxicity, and monetization. But with its astounding momentum and reach already today, gaming becoming a trillion dollar industry seems firmly within grasp. The meteoric rise of this now dominant entertainment business still likely has many years left to run.