Games Investment Market Review: 2012 - 2016

Digital investment bank Digi-Capital has recently published its Global Games Investment Review 2013. According to its results, the video games market is being in transition at the moment; its growth and fragmentation are mainly passing across the following sectors: mobile/tablet, social/casual, MMO, console/PC, middleware/gamification, and advertising.

Below are some of the highlights from the Report:

• The total video games market is expected to grow 12.2% CAGR from 2012 to 2016 to reach $83 bln and account for more than 55% revenue share of the global games market.

• Online / mobile games market is currently assessed at $31 bln and accounts for 49% of the global video games revenue. In 2016, online / mobile games revenue is predicted to reach $48 bln and account for 57% of the global video games revenue.

• Apple and Google grew the global mobile / tablet market with more than 65 bln downloads in 2012, while Nintendo, Sonyand Microsoft grew home console market by selling more than 170 mln copies.

• Games continue to deliver strong return on investment (ROI): between 2005 and 2012 the games market M&A + IPO returns saw a six-fold increase.

• Asia dominates today’s global games market, followed by Europe and America. It is expected that by 2015 Asia and Europe will take together 87% revenue share for online and mobile games (with China accounting for 32%, Europe – 21%, South Korea – 12%, and Japan – 10%).

• Forecasts say free-to-play may deliver 55% of mobile app revenue and 93% of mobile / tablet apps downloads by 2016. Although gamification is attracting significant early stage investments, this market is yet to achieve its potential in the future.

• The total 2012 investment in games development made $853 mln. Middleware/gamification accounted for 35%, mobile – 31% – MMO – 18%, social/casual – 7%, console/PC – 7% and advertising – 1% in games investment transaction value. Regarding the games M&A transaction volume, it was topped by mobile (39%), middleware/gamification (35%) and social/casual – 10%.

Games Market Fragmentation 2012

Digi-Capital points to the following skills and approaches to be used for growing and sustaining the global games market in the future:

-          Cross-platform games development (no more “one game” driven companies)

-          Multiple distributors across platforms and locations

-          Low cost game development and rapid market response

-          Strong analytics to increase commercial returns

-          Focus on delivery of true scalability and category leadership, with profit margins increasing in line with revenue growth.

Want to learn how leading gaming companies such as Playtech and Betsson achieve the above using nearshore IT resources provided by Ciklum? Check out our games development expertise and clients’ testimonials.

Source: Digi-Capital, 2013

About Evgenia Kutsa, Marketing Associate at Ciklum (13 Posts)

Evgenia has a journalism/media background and specializes in PR-marketing communications, content management, blogging and documentary filmmaking.