Game Market will Attract 2.7 Billion Users in 2020

A show of the power of the sector in the midst of the coronavirus came on Wednesday, 13, when the Chinese Tencent, owner of WeChat, reported a 26% increase in revenue.

From the list of few sectors that grow amid the coronavirus is the universe of games. With people quarantined at home, games, which have been on the rise in recent years, gain even more traction.

Growth leaders in recent years, games on mobile or tablet should remain the stars. Report by the specialized consultancy Newzoo released this week projects that games for mobile devices should generate revenue of 77.2 billion dollars this year, up 13.3% and almost half of all revenue in the sector. The segment as a whole is expected to grow 9.3%, reaching revenue of US $ 159.3 billion, already with projections including the post-coronavirus panorama.

The mobile gaming industry can reach 2.6 billion users, according to Newzoo’s projection, almost all of the 2.7 billion users who must play in 2020. In other words, even those who play on a computer or console must bet on some mobile game this year.

The quarantine intensified this scenario. A demonstration of the power of mobile games came on Wednesday, 13, when China’s Tencent reported a 26% increase in revenue, driven mainly by its gaming arm, which corresponds to almost a third of revenue. The revenue reached 108 billion yuan, about 15.3 billion dollars. Profit was $ 4 billion, also above projections.

Tencent also owns WeChat, a Chinese super app that includes everything from messages to money transfers and, of course, many games.

Game analytics company Sensor Tower says the company’s top two games (Honor of Kings and PlayerUnknown’s Battlegrounds) had the highest industry revenue in the world in March. Tencent also participates in the main game companies in the world, as in the American studio Riot, owner of the worldwide success League of Legends.

The Chinese gaming market that Tencent dominates benefited from the quarantine in Asia, which started before the closure of regions such as Europe and the United States. China discovered the first cases of coronavirus in late December and began a quarantine period in parts of the country as early as January and then a more restricted closure in February. Thus, Tencent’s quarter results already reflect the gains obtained in this period.

The Asia-Pacific region, which accounts for 49% of global gaming revenue, is expected to remain one of the drivers of the sector in the world and grow 9.9% this year. North America is expected to grow 8.5%, Newzoo projects. China and the United States combined will also represent 49% of revenue.

But growth is promising even in other markets. Latin America is expected to increase by 10.3%, the highest growth rate in the world. But in all, the region still accounts for only 4% of global gaming revenue. For the Latin American public, mobile games are promising due to the high penetration of mobile devices in comparison with other segments, such as consoles, which are less accessible.

One of the challenges of the cell phone is to convince the user to pay for entertainment, more than with tools such as a computer or console: only 38% of these mobile players should spend on games in 2020. Still, Newzoo projects, the pandemic favors a potential greater level of engagement. “Mobile games have the lowest entry barrier: more than two-fifths of the global population has a smartphone – and many mobile games are there for free to play,” writes the company in an article on the results.

For the other segments, quarantine also brings short-term gains, but some major challenges. Console games are expected to grow 6.8% to $ 45 billion in revenue. 729 million players will be reached. The problem for consoles, says Newzoo, is that the pandemic could affect the production of new games and the distribution logistics chain for those who still sell physical parts.

On the computer, the expected growth is 4.8%, to $ 37 billion, reaching 1.3 billion players. This format is also less susceptible to physical chain problems. “The PC ecosystem has moved to digital much faster than consoles,” writes Newzoo. But the development of games, which is more complex than on cell phones, can also be affected with quarantine.

The search for the gold mine in the gaming sector has been attracting other companies outside this niche, such as the giants Amazon, Facebook and Apple. This year, Facebook launched an application from its gaming arm, Facebook Gaming, to stream and watch games on the platform. The company’s parent social network.

Reviewer overview

Game Market will Attract 2.7 Billion Users in 2020 - /10

Summary

A show of the power of the sector in the midst of the coronavirus came on Wednesday, 13, when the Chinese Tencent, owner of WeChat, reported a 26% increase in revenue.

0 Bad!