Global Video Game Revenue To Rise 6% Annually, Reaching $257 Bn By 2028: Report

Global video game revenue is expected to climb by 6 per cent each year, reaching USD 257 billion in 2028 according to new study from Bain & Company. The gaming business continues to outperform traditional media, such as streaming and box office sales, thanks to younger players' increased involvement and the growing desire for immersive and cross-platform experiences.

The video game business is undergoing unparalleled growth, with global revenues anticipated to reach USD 257 billion by 2028, up from USD 196 billion in 2023. Bain & Company's inaugural Gaming Report, which polled over 5,000 consumers in six countries, reflects video games' expanding prominence in the worldwide entertainment landscape.

Increasing Popularity With Younger Gamers

The younger demographic has been a primary driver of this expansion. Nearly 80 per cent of those aged 2 to 18 are avid gamers, devoting approximately 30 per cent of their leisure time to gaming. In contrast, elderly players (45 and up) account for a lower proportion of the market, with only 31 per cent identifying as gamers. These elder gamers play for less time, averaging 2.5 hours per week, primarily on mobile phones.

Immersive Experiences And User Generated Content

Bain's research reveals a shift in customer tastes for more immersive gaming experiences. One-third of questioned gamers said immersive games were their primary choice, with participation significantly greater among those under 18. This trend is complemented by an increase in user-generated content (UGC), with over 80 per cent of gamers having played a game containing UGC and one in every seven creating their own. The introduction of generative AI is likely to amplify this trend by giving gamers new tools to personalise their gaming experiences.

Demand For Cross-Platform Accessibility

The report also identifies a high need for cross-platform games. Approximately 70 per cent of gamers use several devices, and a sizable proportion of respondents stated a desire for increased interoperability across platforms. Currently, 95 per cent of game production companies with more than 50 workers are working on cross-platform titles, demonstrating the industry's shift towards a more unified gaming experience.

Impact On Other Media

Gaming's influence goes beyond the screen, with gaming intellectual property (IP) increasingly appearing in various media types such as films and television shows. This crossover has a measurable impact, as game-related shows and movies increased average concurrent user engagement by 28 per cent within six months of release. Bain forecasts that advances in non-gaming technology and the rise of cloud gaming will reduce the need for dedicated gaming hardware, such as consoles and gaming PCs. This shift towards device-agnostic gaming is projected to accelerate industry consolidation, with dominant firms gaining a larger market share.

The Function Of Marketing In The Gaming Industry

As the gaming audience grows more saturated, efficient marketing is critical for retaining and expanding player bases. According to Bain's analysis, there is tremendous competition for gamers' attention, with 67 per cent of players absorbing other media while gaming. This has made it difficult to retain high advertising rates because marketers are increasingly demanding proof of engagement rather than merely reach.

Game firms, particularly those with revenues under USD 1 billion, spend approximately 25 per cent of their revenue on marketing, compared to the 15 per cent spent by other software companies. However, much of this expenditure is not producing the anticipated results due to inefficient marketing methods in a competitive market. To solve these issues, Bain recommends using generative AI to improve marketing efforts via targeted ads, content creation and measurement.