The video games industry continues on its upward trajectory, driven by a combination of gaming software trends, including the rapid growth in popularity of esports (organized multiplayer video game competitions) and further breakthroughs in technologies like virtual reality (VR) and augmented reality (AR), which are enabling more immersive gaming experiences. These trends are beginning to intersect and create new formats, including VR esports competitions.
Listed below are the top gaming software technology trends, as identified by GlobalData.
The cloud gaming software model is poised for rapid growth. The goal is to provide gamers with frictionless and direct access to games that are hosted in the cloud rather than on PCs or games consoles. In 10 years, traditional PC and console gaming will have been largely replaced by games hosted in the cloud and accessed via thin-client PCs, consoles, or mobiles.
Esports is a form of organised, multiplayer video game competition. It is witnessing spectacular growth, with the global audience surpassing 450 million people in 2019, according to Newzoo. This trend is pushing gaming companies across the value chain to invest heavily in esports, leading to the emergence of professional sports leagues. The popularity of esports among key demographics means it will receive increased attention from advertisers.
A fantasy sport is a type of online game where participants put together imaginary or virtual teams of real-life professional sports players. Fantasy sports are particularly popular in the US and Canada. The fantasy sports industry has faced significant legal challenges. However, the decision by the US Supreme Court to block a law barring states from allowing wagers on games could have a positive impact on the sector..
Gaming is the most significant use case for VR. Leading VR headsets include Sony’s PlayStation VR and the Oculus Quest. VR gaming will steadily gain traction, driven by falling headset prices, the arrival of new content, and the growing esports community. China will lead the way in VR gaming.
The developers of AR games have failed to build on the success of Pokémon Go. Jurassic World Alive, The Walking Dead: Our World, and Ingress Prime were all heralded as successors to Pokémon Go’s crown. Harry Potter: Wizards Unite enjoyed a strong debut in June 2019. Smartphones will remain the most popular AR gaming device, but usage will decline. 5G’s low latency will be a boon for AR gaming and its emergence will help the development of multiplayer AR games.
The console market is split between Microsoft, Nintendo, and Sony. Microsoft’s Xbox One and Sony’s PlayStation 4 both launched in 2013, with higher powered versions released in 2017 and 2016 respectively. The Nintendo Switch hit shelves in 2017. Valve and Nvidia have console offerings, with the former utilising streaming and Nvidia looking at handhelds. Nintendo Switch is predicted to continue delivering sales growth. As networking infrastructure coverage evolves through fixed broadband and 5G services, the low latency required for streamed gameplay will become ubiquitous and gaming is predicted to move towards an as-a-service model, removing the need for console hardware.
Online gaming ecosystems
Digital distribution is a significant segment of the video games market. Mobile gaming software is exclusively available via application stores, while console platforms have also built similar stores. Digital distribution offers numerous benefits to consumers and reflects customer demand for this service. For companies, it removes the costs associated with shipping and selling physical goods. The use and promotion of digital distribution portals will only increase and, in the longer term, these portals will offer gaming companies a route to streaming.
Mobile gaming ecosystems
Despite the popularity of gaming on consoles and PCs, mobile devices have the largest player base, due to the ubiquity and penetration of smartphones. Some of the biggest titles have been developed by studios such as King and Supercell, though larger gaming companies such as Valve and Activision Blizzard have also entered the space. Convergence caused by cloud gaming is likely to mean that titles will no longer be platform exclusive. This simplifies things by divorcing the requirement for both high hardware specifications and the platforms themselves.
Driven by the increasing use of mobile devices, the online gambling industry is experiencing significant growth. In October 2019, Flutter Entertainment announced that it was acquiring The Stars Group for $7bn. The global online gambling market is forecast to record double-digit revenue growth over the next five years.
This is an edited extract from the Tech, Media, & Telecom Trends 2020 – Thematic Research report produced by GlobalData Thematic Research.