Global video game market
Recent years have seen a very rapid increase in the availability of new technologies, in particular the spread of broadband Internet access, which has brought about a growing interest in electronic entertainment. Video games are the second largest segment of the global entertainment market after television and an important segment of the economy. Based on the total number of hours of playing games and watching streaming games, games are the most popular leisure activity worldwide. Compared to other important segments of the global entertainment market, the video games market is also the segment with the highest growth potential in the coming years.
Due to the specific nature of the video games industry, the market in which Klabater SA operates should be viewed from a global perspective. According to the 2018 Global Games Market report published in October 2018 by the analytical company Newzoo, the global video games market was worth USD 121.7 billion in 2017 and will grow by 10.8% or to USD 134.9 billion in 2018. The largest market segment for the past 3 years has been mobile games, which will be worth USD 63.2 billion in 2018, or 47% of the total market value. The second most valuable market segment is console games, which globally reached a value of USD 38.3 billion. The third segment is PC games with a value of USD 29.2bn (excluding browser games).
The average annual growth rate between 2018 and 2021 according to. Newzoo for the entire industry will be 8.9%, with the mobile segment showing the highest growth rate (12.5%), which in 2021 will already account for 52% of the value of the entire market. The average growth rate of the console and PC (boxed/downloadable games) segments will be 7.5% and 3.7% per year, respectively. Together, the value of these two segments will increase by more than USD 12 billion in the period 2018-2021.
Video games market in Poland
The value of the Polish video games market, according to the aforementioned report by Newzoo, is currently USD 541 million (approx. PLN 2.1 billion), which represents an increase of 7.3% year on year and corresponds to approx. 0.4% of the global market. The online population represents approximately 84% of the total population. Contrary to global trends – PC and console games are still the most popular on the Polish games market. Their market share in 2016 was 51% and by 2019 their level is expected to drop only slightly to 49%. PC MMO/Online games and social games are expected to see a slightly larger drop in market share, by 3% and 4% respectively Mobile games segment will grow, however, with a share of 29% in 2019.
Over the past dozen years or so, Poland has evolved from a country where games were just starting to crawl into a kind of small production plant of hits – not only high-budget ones, but also smaller ones, popular in their niches. Looking at global data, the value of the Polish games market still seems rather small – revenues generated by Polish companies amount to barely 0.4% of the total market. Despite growing trends and the increasing acceptance and popularity of games as a form of entertainment in Polish society, this market is still relatively small. On the other hand it seems that there is still a lot of room for new entities.
The gaming console market
The gaming console market is dominated by 3 manufacturers: Sony (PlayStation 4), Microsoft (Xbox One) and Nintendo (Wii, DS and Switch). The market leader is Sony, whose PlayStation 4 console, according to vgchartz.com, has sold over 90 million units, more than double the sales of Microsoft’s latest generation console, the Xbox One (42.7 million units) over the same period, i.e. since the debut of both consoles in 2013. Between 2015 and 2018, PlayStation 4 sales accounted for approximately 40-45% of current console sales, while Xbox One sales accounted for approximately 15-20%. The key event of 2017 was the launch of the Nintendo Switch, a console that immediately reached a share of 30% of current sales, with a total of 27.5 million units sold so far.
Source: vgchartz.com, in million pieces
It is worth noting that by far the biggest markets for console games are the US and Europe, which account for a share of around 75% of total cumulative console sales.
Japan is also a large single market (approximately 15%). Due to the significantly lower level of average wealth, the share of other regions, including Asia, is relatively small at around 10%. When analysing the US and European markets, the differences in preferences for the latest generation of consoles are noteworthy. In North America, the PlayStation 4 console is only slightly more popular than the Xbox One (sales of 30.6m vs. 26.5m), while in Europe there is a very clear advantage of the PlayStation 4 over Microsoft’s console (36.6m vs. 11.4m).
|Platform||North America||Europe||Japan||Rest of the World||In total|
Source: vgchartz.com, in million pieces
The Polish Gamers Research’18 report confirms the above European preferences at the Polish level. The PlayStation 4 is by far the most popular console in our country, indicated by 44% of the respondents, while the Xbox One by only 18%. It is worth noting the opposite situation in the popularity of previous generation consoles of both manufacturers, where the popularity of Xbox 360 is higher than the popularity of Playstation 3.
Source: Polish Gamers Research 2018, Krakowski Park Technologiczny and MKiDN
The most important digital distribution platforms
The digital distribution market for PC games has been dominated for several years by Valve’s Steam platform. Several major game providers have their own distribution platforms, including Electronic Arts (Origin), Ubisoft (Uplay), Activision-Blizzard (Battle.net) or Polish CD Projekt (GOG), but even the share of the largest ones is several times lower than Steam. At the end of 2018, a communicator popular among gamers – Discord (Discord Game Store) – joined the group of entities offering games from other developers, as well as Epic Games (Epic Games Store), which offers games, among others, in a subscription model and at least one game per month in a free-2-play model (available without additional fees). The key digital distribution platforms for console games are primarily PlayStation Network (Sony) and Xbox Live (Microsoft). According to information cited in the report Kondycja Polskiej Branży Gierży 17, currently on the Polish market the share of digital distribution of PC and console games oscillates around 15% of the total market. By 2019 this level should slightly exceed 20% reaching the value of PLN 450 million, out of which ca. PLN 130 million will concern the distribution of console games and the rest will be PC games.
*Information included in this chapter comes from publicly available sources. When compiling, searching and processing market, industry or other data taken from external sources, no additional independent verification has been carried out.
Klabater SA does not undertake to update the market or industry data presented in this chapter, subject to obligations under generally applicable law.
Source: PwC: Global entertainment and media outlook 2017-2020, Newzoo, Vestor DM estimates
Source: 2018 Global Games Market, Newzoo