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Gaming industry could be worth $320 billion by 2026, says PWC

Gaming industry could be worth $320 billion by 2026, says PWC

PWC’s latest and long awaited State of the Union address on Entertainment and Media paints a bright picture for the future of gaming. A compound annual growth rate (CAGR) in excess of five percent is impressive for any significant industry. PWC predicts this figure will exceed eight percent globally over the next two to three years, thanks in particular to significantly higher growth in Australia, the US and China.

That will make the industry worth $320 billion worldwide – and that excludes revenue generated through eSports, which is considered an industry segment in its own right. 

Evolving attitudes in key markets

We mentioned three key markets earlier. None out if the US, China and Australia are exactly new markets for gaming, but they have all seen significant changes in attitude that redefine what it means to be a gamer.

PWC believes that feelings of boredom and isolation during the events of 2020 and 2021 were significant drivers that led millions to take up gaming. This started out as an increase in playing social and casual games, but as people reaped the benefits and found that gaming made them feel better, many took the next step and invested in premium games, consoles and other gaming equipment. Just how many? The short answer is “a lot,” as the premium gaming market saw a 26 percent expansion between 2019 and 2021.

In short, gaming’s gradual increase in popularity accelerated dramatically during those months and gaming transformed into a mainstream leisure activity.

Sustained growth for iGaming

iGaming is growing even faster than the rest of the gaming industry. This is partially fueled by new regulations opening up new markets, for example in Canada and parts of Europe. But even in jurisdictions where laws remain unchanged, more people are gambling online.

Once again, Australia is a perfect example, as the popularity of Australian internet pokies shows steady escalation year after year despite Australia having quite strict rules about online gambling. Australians and gambling have always gone together like steak and shrimp, and while the events of 2020 certainly caused a spike in the use of online casinos, it only served to accelerate a process of adoption that was always going to happen in time.

The Australian casino market is going through difficulties of its own at present, and these have been well documented elsewhere. Diminishing trust in land-based providers is just one more reason for Australian gamblers to play their pokies and card games at online casinos instead.

Developing markets are increasingly significant

Australia and the other markets mentioned earlier are already well established, and have seen significant growth over the last three to four years. At the same time, new markets ae emerging in the developing world. India is a prime example. Here is a nation that has a fondness for technology and the latest gadgetry. Now, the arrival of low cost handsets has combined with the 5G rollout so that online gaming is not just for the affluent few in the suburbs of Bangalore and Delhi, but is truly accessible to all.

Similar patterns are being seen in other developing nations, especially in areas like West Africa. Nigeria and Ghana are likely to be key markets for gaming companies to target over the coming years. 

Looking to 2026 and beyond

It’s not just the gamers who are changing. The nature of gaming is at a key juncture in its evolution. Looking at the medium to long term, the entire industry clearly has at least one eye on the metaverse. The obvious starting point here is VR, a gaming niche that has had so many false dawns, it is fair to wonder whether it will ever truly hit the mainstream.

Developers at the leading edge are ploughing more research dollars than ever into VR. The industry seems to have been encouraged by the success of the Meta Quest and spending is predicted to increase from around $3 billion today to at least $7.5 billion in 2026.

Yet VR is only an access point into the metaverse. It is at such an early point in its evolution that it is hard to conceive just how it might shape all aspects of the gaming industry – from VR games on the Meta Quest to those classic Australian pokies to the social games we play against far away friends and family in the years ahead.

One thing is certain – gaming is a central part of our lives, and it is here to stay.

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