The gaming industry in today’s world has hit an all-time high in its growth trajectory, especially with the arrival of the COVID-19 pandemic. Being one of the few industries to flourish amid the pandemic, the gaming industry has witnessed significant growth in the world today. Due to their prolonged time at home, gamers have had the chance to purchase and download new video games, consoles, and so much more.
The industry outperformed both sports and movies combined last year as it became the largest money-maker in entertainment. On a global scale, the gaming sector was valued at US $162.32 billion in 2020. Based on the present growth rate, the industry is expected to reach a value of US $295.63 billion over the next five years (2026), growing at a CAGR of 10.5%.
Analyzing the industry by segments, the mobile gaming segment takes the lead, ahead of the console and PC gaming segments, as displayed by the chart below.
With the state of the global gaming industry today, it comes as no surprise that various high-profile investors are clamoring to invest in this lucrative industry. Some of these investors include Sequoia Capital, Techstars, Y Combinator, 500 startups, Footwork, Greylock, Slow Ventures, and First Round Capital, to mention a few.
Recent trends indicate that although the gaming industry has come a long way since its introduction in the 1970s, this is just the beginning as the market moves more towards advanced virtual reality and esports tournaments.
Growth of the video game industry
The gaming industry is often thought to be the same as the video gaming industry. The notion is not entirely wrong, as video gaming constitutes the most substantial part of gaming. Remnants of the gaming industry, like board games, for example, are gradually becoming obsolete since they have been fully integrated into video gaming.
Financial statistics of the modern video gaming industry are highlighted below.
- Global video gaming revenue is projected to reach US $154.6B by the end of 2021
- The revenue is expected to display a compound annual growth rate of 9.28% between 2021 and 2025, leading to a projected market volume of US $220.5B by 2025
- The largest segment in the video gaming industry is Mobile Games, with a projected market volume of US $109.7B in 2021.
- User penetration in the global video gaming industry as of 2021 is 38.0% and is expected to reach 43.6% by 2025
A quick look at the chart above shows the steady rise in the market value of the video gaming industry over the years and a forecast of over US $200 million by 2023, revealing vast commercial opportunities to be exploited in this sector.
Genre breakdown of video games
The video game industry today boasts a vast number of gaming genres such as action, shooter, and sports, to mention a few. This wide variety of options offered by the industry has brought in non-gamers and changed the popular perspective of gaming from being entertainment-only. This is seen widely as the education sector, for example, now incorporates games to engage and simultaneously teach students, making learning more fun and productive.
Gaming genres now offer puzzle games, brainteasers, and strategy games for intellectuals looking to improve their cognitive abilities while retaining genres like action, shooting, and adventure games for the original entertainment-seeking gaming market. As of 2020, about 40% of the global population were video game players, and the number is still on the rise even today, thanks to more inviting game genres introduced by the industry.
A brief analysis reveals some of the most popular and best-selling video game genres in the global tech space.
Regional overview of the gaming industry
The chart below displays the market share of the gaming industry revenue worldwide in 2020, broken down by region. The gaming market in the Asia-Pacific region was estimated to generate about US $84.3 billion revenue in 2020, which amounted to 48% of the global gaming market revenue that year. The implication being that the Asia-Pacific market is the global leader of the gaming industry today, ahead of North America (26%) and Europe (19%).
Some notable gaming startups with high growth potential
All this buzz in the industry has, of course, triggered the rise of high-growth startups poised to lead the gaming industry someday with their innovative offerings. The current market leaders in this industry include Nintendo, Sony (Playstation), Microsoft (Xbox), and Tencent, to mention a few. This article, however, focuses on some top emerging gaming startups (with high-growth potential) turning heads in the global tech space today.
Overwolf is a software platform that creates and develops gaming applications for gamers and developers. The startup has a mission to provide value for all gamers in all games by empowering third-party developers. Operating with passionate creators, venture-backed startups, and large corporations, Overwolf helps developers unlock new game characteristics that enhance game experiences and support the game publishers. Their partners include NVIDIA, Intel, OP.GG, Cloud9, Riot Games, Team Liquid, Logitech, and many others.
Founders: Alon Rabinovitz, Gil Or, Nir Finkelstein, and Uri Marchand
Date of Incorporation: 2010
Headquarters: Tel Aviv, Israel
Funding Amount: US$ 74.7 million
Number of Investors: 10
Funding Status: Series C
Sorare is a globally recognized fantasy football game where administrators can buy and sell approved digital collectibles. The startup is dedicated to making crypto accessible and entertaining to all through fantasy football. Sorare offers a soccer team administration game with digital NFT cards that supporters can gather and trade. Being just about four years old, the startup currently sold US $1.8 million worth of cards in December 2020.
Founders: Adrien Montfort and Nicolas Julia
Date of Incorporation: December 2018
Headquarters: Paris, France
Funding Amount: US$ 59.2 million
Number of Investors: 20
Funding Status: Series A
Dream Games is a mobile gaming startup headquartered in Istanbul. The company has an objective to merge technology and creativity to develop high-quality mobile games that will be played for years.
Founders: Eren Sengul, Hakan Saglam, Ikbal Namli, Serdar Yılmaz, and Soner Aydemir
Date of Incorporation: 2019
Headquarters: Istanbul, Turkey
Funding Amount: US$ 57.5 million
Number of Investors: 3
Funding Status: Series A
Theorycraft Games is an early-stage independent game studio. The Theorycrafting process is an honor gamers reserve for the deepest games in the world. It is performed when a game is deserving of infinite speculation and discussion about how best to play.
Founders: Areeb Pirani and Michael Evans
Date of Incorporation: 2020
Headquarters: Los Angeles, California, United States
Funding Amount: US$ 37.5 million
Number of Investors: 5
Funding Status: Series A
The global gaming industry in the modern age today is advancing rapidly and still displays vast untapped opportunities in the foreseeable future. Industry experts describe this period as the “golden age of gaming”, showing how far the industry has come since the invention of traditional board games. The road ahead of the industry is not all smooth, as some still see video gaming as a driver of negative influences and health consequences. The majority, however, agree that when played in moderation, games can be a catalyst for mental health improvement, development of social skills, and a viable source of stress relief. Mainly fueled by the recent global pandemic, the industry is on a rise that sees no downfall in the nearest future.
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