Guide to What trends should investors follow in computer games market, Advice, Help
What Trends Should an Investor Follow in Computer Games Market?
22 Jan 2021
The gaming industry is going through one of the best times in its history, this time on web and mobile platforms. Investors should closely follow developments in this sector and the steps of key players. Perhaps this is where the next stock market star will emerge.
The global audience on all gaming platforms exceeds 2 billion people: every fourth person on the planet plays. And this number is constantly growing – thanks to young people who use mobile Internet almost from their birth.
What Trends Should an Investor Follow in The Computer Games Market Advice
Unlike older generations, Gen Z do not just play games: for them, it is a way of communicating with the outside world and friends, which makes gaming a potentially attractive marketing channel for global corporations.
The COVID-19 epidemic also contributed to the popularity of gaming: in the absence of real entertainment, people of different generations play more virtual games.
The audience and consumers purchasing power are growing in parallel with the penetration of gaming into real life and easier access to games, the number of ways to monetize games is increasing, and the gaming economy is developing. All this entails an increase in the companies income which leads to investments in the production of new content for players and the improvement of technological developments, said Michael Boettcher, the Storm International founder.
It is normal that right now the industry is undergoing a serious change in the landscape: new players are entering the gaming market – from IT giants to investment funds, and indie developers are seeking to conduct an IPO to raise money and publicly fix its value. The largest sectoral ETF, VanEck Vectors Video Gaming and eSports, is up 72% YTD. Evergreen Gavekal recently named gaming as one of the most promising investment sectors of the future.
Game consoles appeared in the US, Japan and Western Europe in the early 1970s and were not available to a wide range of consumers; buying a console required a serious investment. Over the next 35 years, six more generations of consoles came out. In the 2000s, games became more accessible, and an alternative appeared in the form of personal computers. In the 21st century, cartridges, and then discs, are gradually becoming a thing of the past – it became possible to buy and download the game online.
Every year the typical gamer spends more and more money on games for each new generation of game consoles and computers. In November 2020, the ninth generation of consoles entered the market, including the fifth generation of the Sony PlayStation and the fourth XBox.
One of the reasons for the rise in the cost of gaming is the fact that video games are at the forefront of technological development, which is increasingly expensive to produce blockbuster games of the AAA category. Chip developers like AMD and Nvidia are bringing the latest components to consoles and gaming computers. At the same time, even after the release of a new consoles generation, the previous generation often continues to sell well after the successful launch of new products.
Although consoles have long ceded the palm to mobile games for smartphones (40% – $ 63.6 billion, growth – 15%), they nevertheless continue to hold almost a third of the gaming market – 28% ($ 45.2 billion). On the third place are games for computers – 21% of the market ($ 33.9 billion).
The video game market remains a beneficiary of a long-term technology trends, and the coronavirus pandemic spread should support the growth in sales and these companies profits until 2021.
The games monetization is improving, users trade among themselves, for example, buying “pumped-up” heroes and items, so as not to waste time themselves. In parallel with the growing popularity of computer and video games, esports began to develop and the economy within games leads to a real exchange of money among players, noted Darren Keane from Shangri La.
The role of platforms like iOS and Google Android is growing. Leading companies in the cloud technology are presenting their game-as-a-service platforms. The role of tech giants like Apple and Alphabet will grow, both in the new games sale through their App Store and Android, and in their own development. These and other factors have made monetization and gaming economics difficult over the past 10 years and will continue to shape the industry.
For several decades, gaming has gone from being a rare and expensive entertainment for children from wealthy countries to a popular way of spending time, both among children and adults, said Darren Keane about Storm International work processes and world trends. In parallel with the evolution of games and the Internet development, gaming is becoming an important cultural phenomenon, combining elements of professional sports and even the arts – with stadiums for watching cyber matches.
With the development of VR technologies, the gameplay becomes more and more interesting in terms of not only entertainment, but also professional training (following the example of the pilot training program) and even medical use (therapy against fear of heights). These areas make gaming one of the most interesting and promising industries of the 21st century.
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