For many gamers, Christmas this year falls as early as 4 December. That is the day on which Electronic Arts releases "FIFA 21" for the PlayStation 5 and the Xbox Series X|S, as the US games developer combines a gaming blockbuster with the next generation of consoles. Sony (PlayStation) and Microsoft (Xbox) had brought their latest high-tech devices onto the market only a few weeks ago. With even faster loading times and a higher resolution – to mention just two central features – the groups are promising users a gaming experience that is rapidly approaching reality. The push for innovation came at the end of a year in which this already booming market has received a completely unexpected boost to growth, with the stay-at-home restrictions imposed during the coronavirus pandemic leading a great many people around the globe to discover gaming for themselves. "More than three billion people across the world are playing games – for fun, to pass the time and to get in touch with others," explained Microsoft in September.
The huge community has kept the cash registers of the companies active in this segment ringing loudly. The WePC portal puts the global market for video games this year at just under USDbn 160, and worldwide sales could pass the USDbn 200 barrier 2023 (see graph). Mobile gaming and cloud-based products are reckoned to be the central growth drivers. While ever faster smartphones equipped with larger and high-resolution displays are enhancing the fun factor, the outsourcing of games to the data cloud is establishing itself as a separate business model. With their new models, console manufacturers are responding to this trend: the Sony PlayStation 5 is optionally available without a drive, and even the Xbox Series S is a fully digital device. Both companies offer cloud-based access to extensive games libraries on dedicated platforms.
At first, however, fans were happy just to get a chance to enjoy the new devices, as consoles sold out fast in many places. However much the bottleneck – attributable at least in part to production difficulties caused by coronavirus – annoyed many gamers, experts reckon that over the long term the new consoles will sell even better than earlier generations. With Sony having been able to shift over 100 million PlayStation 4 units, Ampere Analysis expects sales of the successor model to be more than two thirds higher by 2024. That would keep the Japanese company well clear of its US rivals. The sales forecast for the Xbox Series X|S comes to just under 120 million units in total over the same period (see graph). Among the first gamers to be able to unwrap the new consoles were gaming bloggers. Videos showing them unpacking their PlayStation and Xbox devices have received millions of views on the internet.
The superstars of the eSports scene also enjoy a huge fan base. Whether "Fifa" or the strategy classic "League of Legends" (LoL), competitions in the various games attract a mass audience. Just as in real sport, there are teams which vie for the services of the very best in the field. Organisations focused on eSports are mixing it in this business alongside traditional football clubs such as FC Basel and Bayern Munich. That the boundaries between the two areas are becoming ever more fluid financially as well is highlighted by a recent transfer, when Team SoloMid signed up LoL gamer Hu "SwordArt" Shuo-Chieh. According to unconfirmed reports, this is a record deal under which the Korean has put his signature on a two-year contract for the US team, earning USDmn 3 a season. Huge sums are flowing into eSports primarily through sponsorship and advertising, but also from the sale of media rights. Newzoo estimates the global market this year at USDmn 950 and sees it growing to just under USDbn 1.6 by 2023.
e=expected; sources: WePC, Statista, NewZoo Historical data are not a reliable indicator of future performance.
Sources: Thomson Reuters, Ampere Analysis Historical data are not a reliable indicator of future performance.
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