Caption: Console sales are expected to explode in 2020
The final few months of the year are always the most lucrative for the gaming industry. It’s a time when more people are spending time away from work to relax for a bit.
It’s the season when many spend time at home playing games on their consoles, computers, and smartphones. It’s not just the stereotypical gamers doing this either, this is an activity enjoyed by those of all ages, genders, and backgrounds.
For example, AAA titles like Call of Duty: Black Ops Cold War will appeal to fans of shoot ‘em up games, while Mario Kart 8 for Nintendo Switch is a great option for gathering people together around the TV. Online poker games are also a popular option, particularly since they can be played on a smartphone or tablet from anywhere in the house.
Games, consoles, peripherals, subscriptions, and gift cards make for coveted gifts, further helping to drive up revenue. Let’s see how the situation looks like this year.
2020 Will Be Different
In 2020, things will be a little different. The gaming industry has seen explosive growth lately and this year’s holiday season will see the release of the latest generation of game consoles.
More and more people are turning to mobile games, which is helping to drive record revenues for publishers. This is expected to grow even further in the final few months of the year.
The iGaming industry, which offers online poker, sports betting, and casino games, is enjoying growth throughout the United States as more states pass legislation that permits gambling in their states.
The PlayStation 5 and Xbox Series S and X went on sale in mid-November, with the typical fanfare and excitement. It will mean many will spend the rest of the year either hunting down the few remaining units or playing on their new machines.
Analysts at the Japanese company SBBIT predict that the Sony PlayStation 5 could sell between 200 and 300 million units over its lifetime. That would make it the best-selling console of all time.
Sony itself expects it to shift around 6 million units by the end of winter, with much of that figure comprising holiday sales.
Existing console and PC games are also enjoying longer lifespans thanks to regular updates and microtransactions. These small and regular payments from gamers are helping to bump up the revenues of major publishers like Electronic Arts and Take-Two.
In May, EA reported record revenues at the end of its 2019/20 financial year. Its Ultimate Team feature, which is where most of its microtransaction revenue comes from, reached $1.49 billion. That’s almost triple the figure from five years ago.
Meanwhile, Take-Two, the company that publishes hits like Grand Theft Auto, Red Dead Redemption, and NBA 2K saw its profits skyrocket by 116% earlier in the year. Building on strong growth in previous reporting periods.
The company saw “in-game spending” rise by 34% in its last financial year. In August last year, it reported generating over 58% of its revenue from these transactions.
By continuing these trends, the industry is in for an incredibly strong holiday season in 2020.
The iGaming industry is at different stages of its life cycle in different regions around the world. In Europe, where legislation is friendlier towards this type of entertainment, the industry is already well-established.
Gross gaming revenues (the money left from wagers after winning bets have been paid out from casino games will surpass €20 billion for the first time this year, while online poker is also enjoying steady growth.
While in the UK and other European nations, playing games like Texas hold ’em and Omaha hi-lo through sites like 888 poker has been commonplace for more than a decade, the US market is still opening up. Several new states have legalized online poker and other casino games over the last year, so more people than ever before will be able to enjoy them over the holiday period.
In states like Pennsylvania, where the refurbished gaming laws have been in place for a couple of years, revenues from online poker, slots, table games, and sportsbooks have been rising steadily.
In states like West Virginia, where online casinos were first permitted just a few months ago and poker expected to follow suit, this will be the first holiday season where such gaming has been possible. It’s therefore likely to be a bumper year for operators in these states.
Mobile gaming has seen the most growth over the last few years. Helped by the almost universal adoption of smartphones by the public, mobile games come in the most accessible format.
The ease of use and flexibility offered by mobile games and the much wider variety of titles makes them appeal to a broader demographic. While consoles were traditionally targeted at males under 30, today, 86% of people over 55 have played a game on their smartphone at least once.
Casual and “hyper-casual” games are the biggest driver of this growth. They’re easy to play, don’t require a commitment of hours at a time, and can typically be repeatedly played over and over.
Examples of these games include the popular Candy Crush Saga, Super Mario Run, and Fruit Ninja.
It’s not just casual games though, Fortnite, PUBG Mobile, and Call of Duty: Mobile have each garnered huge user bases by bringing console-like features to the smartphone and tablet format.
Call of Duty: Mobile broke records in 2019 and again earlier this year when it gathered more than 100 million downloads in its first week and over 250 million eight months later.
The gaming industry is set to have a bumper holiday season in 2020, ending an already lucrative year on a high. The success can be seen across the board from online poker to the PlayStation 5, and it sets the industry on a good footing for 2021.